Why are Americans INCREASINGLY HOSTILE Towards Wealth Redistribution?

I haven't even figured out why we let Gates/Walton/Koch decide what's best for education.

In other words, respondents favored less redistribution if they believed that the person had already grown accustomed to a higher income. The psychology seems to be something like this: Rich people who have been rich for a while have gotten used to their money, so it would be unfair to tax them heavily. But people who have just gotten rich have not become accustomed to higher levels of after-tax income, so it wouldn’t be as harmful to raise their taxes in the interest of greater equality.

The researchers offer another way of making sense of the pattern: Older Americans benefit more directly than any other age group from the social safety net, specifically, Social Security and Medicare. The fact that American seniors already receive government-provided health care may make them view any talk of greater redistribution as taking away what they already have, the researchers suggest.

In other words, the question isn’t, Why don’t Americans want to soak the rich more? It may be, Who exactly is being counted as rich and who is perceived to be benefiting from the soaking?

Americans aren't bothered by winners,

With rising income inequality in the United States, you might expect more and more people to conclude that it’s time to soak the rich. Here’s a puzzle, though: Over the last several decades, close to the opposite has happened.

Since the 1970s, middle-class incomes have been stagnant in inflation-adjusted terms, while the wealthy have done very well; inequality of wealth and income has risen.

Over that same period, though, Americans’ views on whether the government should work to redistribute income — to tax the rich, for example, and funnel the proceeds to the poor and working class — have, depending on which survey answers you look at, either been little changed, or shifted toward greater skepticism about redistribution.

In other words, Americans’ desire to soak the rich has diminished even as the rich have more wealth available that could, theoretically, be soaked.

It’s not just public opinion polls, either. It shows up in the actual policies espoused by candidates for office and enacted by Congress. In 1980, the highest earning Americans faced a 70 percent tax on every dollar they earned beyond $215,400 for a married couple, for example, the equivalent of $544,000 today.

Over the last decade, by contrast, the top marginal rate has ranged between 35 percent (which President George W. Bush secured in 2003) and 39.6 percent (which President Obama advocated and which took effect in 2013).

This core question — How much should the government use its power to tax and spend to redistribute wealth in pursuit of a more equal society? — has been at the root of ideological clashes around the world and throughout history. Yet in American politics in recent years, it has manifested itself in a narrow, partisan debate over whether the top marginal income tax rate should be 35 percent or 39.6 percent.

How you make sense of this seeming paradox of rising inequality and flat or declining support for redistribution depends on your ideological assumptions.

If you’re conservative, a compelling answer might be this: Americans are seeking less redistribution because they have come to their senses. They realized the very high tax rates and generous social spending that prevailed in the middle decades of the 20th century came at a high economic cost, and that low taxes on the rich encouraged greater investment and entrepreneurship, spurring faster economic growth that ultimately made everybody better off. (The economists Glenn Hubbard and Tim Kane have made a version of that argument.)

If you’re a liberal, the answer might be more like this: Americans have been hoodwinked by conservative politicians and media outlets, and have come to view redistribution as a dirty word because they don’t recognize the ways it benefits them. This barrage of misinformation has led them to view any redistributive efforts as welfare that goes to somebody else, particularly to someone with a different color skin. (Paul Krugman has made a version of that argument.)

New research offers a bit more evidence on what may be occurring. It doesn’t disprove either the conventional liberal or conservative argument. But it does show some of the ways that Americans’ attitudes toward redistribution are more complex than either would suggest.

A National Bureau of Economic Research working paper by Jimmy Charité, Raymond Fisman and Ilyana Kuziemko tackled this with an online experiment in which a random sampling of Americans were asked what tax rate they thought appropriate for someone whose annual income had suddenly increased by $250,000 for reasons involving luck. The researchers asked the question twice. In one version, the income gain occurred in the current year; in the other, it happened five years ago. Surprisingly, the respondents favored a 1.7 percentage point higher tax rate if the person with the income gain had recently started earning the extra money than if the person had been earning it for five years. That may not sound like much, but it is more than half of the gap the same experiment showed between the tax rate favored by Obama voters and the rate favored by those who said they voted for Mitt Romney in 2012.


In other words, respondents favored less redistribution if they believed that the person had already grown accustomed to a higher income. The psychology seems to be something like this: Rich people who have been rich for a while have gotten used to their money, so it would be unfair to tax them heavily. But people who have just gotten rich have not become accustomed to higher levels of after-tax income, so it wouldn’t be as harmful to raise their taxes in the interest of greater equality.

Another working paper, from the Brookings Papers on Economic Activity by Vivekinan Ashok, Ms. Kuziemko and Ebonya Washington, looks at how thinking about redistribution has varied over time among groups. One of its more striking conclusions: The shift away from a belief in redistribution has been stronger among elderly Americans than any other age group.

Might this be explained by the elderly becoming more conservative in general, and therefore taking a more conservative view on this issue? Not really. The shift showed up even when the researchers controlled for views on hot-button social issues like abortion and gun control.

The researchers offer another way of making sense of the pattern: Older Americans benefit more directly than any other age group from the social safety net, specifically, Social Security and Medicare. The fact that American seniors already receive government-provided health care may make them view any talk of greater redistribution as taking away what they already have, the researchers suggest.

During the debate over President Obama’s health care overhaul, this thread was often evident; with opinion polls showing that older Americans opposed the law more than younger people did. At the same time, conservative politicians and commentators pummeled the law for cutting Medicare spending to help pay for expanded coverage for younger Americans.

The two studies indicate how complex — even messy — opinions on this question of political philosophy are. Our views on proper tax levels and redistribution may be shaped by seemingly extraneous factors, like whether we believe the rich are already used to being rich, and whether we are already getting government benefits.

In other words, the question isn’t, Why don’t Americans want to soak the rich more? It may be, Who exactly is being counted as rich and who is perceived to be benefiting from the soaking?

... the call for a much higher min wage, which is mostly about wealth redistribution, has wide popular support.

Because decades of letting the education doctorates do it has not gotten us anywhere.

hawkeye10 wrote:

... the call for a much higher min wage, which is mostly about wealth redistribution, has wide popular support.

Sounds to me like you don't have the slightest idea what poverty is all about. If you did, you'd know that living with a family, to support on a minimum wage of $15/hr is close to impossible, even with food stamps and other additives ( tax relief).

When one orange costs $1.79, how many oranges do you think a family considered to be poor can buy?

Rent in the NE for a one bedroom apt is about $1500/month...how many kids can you fit into a one bedroom apt?

Electricity has increased 2X and 3X for residents in the NE. What's a family, trying to survive going to do? Roast hot dogs in Jan over an open fire in the back yard, for dinner? Sleep in their winter coats and hats, when they can' afford to pay the heat bills?

Wash their clothes by hand, when they can not afford a washer or can't even afford the $3.75/load to wash their clothes at a wash/dry store?

How about home ownership? Can the poor ever afford to buy a home?

How about education? How many of the poor kids can attend private schools? How likely is it that poor kids will ever be able to afford a college education ...some schools charging $75,000/year?

A minimum wage of $15/hr may be fine for a 15 yr old kid living at home with his parents, but it sure isn't, for a single mother with 4 starving kids, all wanting sneakers, winter hats, coats, boots, school books, and of course medical appointments..

For each child to receive one orange/day for a month, the cost to the single,working mother, would be about $200/month. Growing kids need milk and plenty of fresh fruits and vegs...But how can they receive them?

Climbing your way out of poverty in the US isn't impossible, but it sure isn't easy or even pretty.

hawkeye10 wrote:

Because decades of letting the education doctorates do it has not gotten us anywhere.

Spoken like a real PUTZ!

It smarts and sometimes builds character. Just in the interest of accuracy.