Voting Behavior and Relative Deprivation
Tyler Cowen asks, “Why do affluent, middle-class, and poor voters all seem so exquisitely sensitive to election-year income growth for the wealthiest families?”
Oddly, the voting of lower-income voters is relatively insensitive to their own election-year incomes. One option is that media reporting is biased toward coverage of the rich and famous. Another option is that we, as voters, are biased toward considering our pleasure or displeasure with the strength of the high-ranking members of our tribe.
Well, yes. This is what social scientists call relative deprivation. A classic postwar study of military personnel by Samuel Stouffer and colleagues found a curious result. Promotions in the Army Air Corps were much faster than in the military police, yet the members of the latter group were much likelier to be happy about their rank and feel the promotion system was fair. Why? Because more airmen had associates who were moving ahead of them and were disgruntled because they felt just as, if not more deserving, than the fast risers. The MPs were relatively satisfied because they were all in the same boat.
By any meaningful measure, Americans are better off economically than our generational forebearers. We live longer, have bigger houses, more clothes, more social mobility, more toys, more access to information, and so forth. Our objective deprivation has, at the aggregate level, decreased substantially.
At the same time, though, there is a wider gap between those at the top and those in the middle. People naturally resent that 20-year-old basketball players, 30-year-old computer nerds, or even 50-year-old CEOs are making geometrically more money than they are. Despite moving ahead on a fixed scale, they feel like they’re falling further behind comparatively.
There’s an old Russian joke about a peasant with one cow who resents that his neighbor has two. One day, a genie appears to grant him a wish. “Kill one of my neighbor’s cows!” is the instant reply.
That story used to be used to illustrate the difference between their society and ours. Westerners are supposed to be motivated to get a second cow — or even a third! — of their own. By and large, we are. But human nature is still there beneath the surface, so we resent others’ success even while trying to emulate it.
The ‘kill my neighbors cow’ is a philosophy of the left, not the right. Obama response that he would want to impose higher capital gains taxes because of fairness, even when it was pointed out that the higher taxes would likely reduce revenue, is a case in point.
But of course pointing that out is just a distraction from the worship due to saint Obama.
Increases in income disparity are less disturbing to people whose incomes are rising. Witness the 90s. If income is flat or dropping relative to costs, as it is for many now, then increasing income disparity becomes a pressing concern for more of them.
Keep in mind also that people who are unhappy with the economy are more likely looking at where they are relative to where they were 8 years ago rather than 30-50 years ago. If their wealth is 50% greater than 40 years before and 10% better than 8 years ago they tend to be happier than if their wealth is 100% better than 40 years ago but 10% worse than 8 years before.
James, the problem is that doesn’t describe a large proportion of the people. Take my own circumstances for example. I’m making less in real terms than I did ten years ago. And I have a lot less disposible income than I did 20 years ago.
The reasons for that are complicated. The structure of my industry, like that of many, has changed. Taxes take out a much larger proportion of my income than they once did.
One of the most important reasons that wages are stagnant (or worse) for so many is that technological and policy changes over the period of the last 25 years have resulted in a significant advantage to capital over labor.
A bit too facile an explanation Mr. Joyner, I suspect we are dealing more with deep-rooted ideology than the group dynamics you present. Precisely why and how ideology rules the mind I will leave to more skilled essayists. That said, we do have an example how the mind is ruled by ideology, consider yetanotherjohn (9:20 am) comment on the Capital Gains tax.
Nobody will argue against the fact that our national debt is increasing and that deficit spending cannot be maintained The rise in our national debt is directly related to the tax cuts initiated by President Reagan, and has accelerated under the Bush I and Bush II administrations. The data speaks for itself.
There is only two ways to decrease this debt burden: slash spending below the level of tax receipts, or increase tax receipts. Correspondent yetanotherjohn offers no solutions to our National Debt problem. Instead, he offers the deeply rooted ideological legend: slashing taxes increases total tax revenue. There is enough data to disprove this bit of ideological nonsense.
But, I do admire his approach of referencing a web search to substantiate his argument. Unfortunately, the search just provides information on how beneficial decreasing the tax is to wealthy individuals…
From a political view point, Obama provides an approach to increase revenue while McCain plans further slash tax rates. Guess which approach will increase the National Debt.
Can you show me one instance in history where increasing the capital gains tax has increased revenue?
I would have you consider the The Tax Reform Act of 1969 which doubled the capital gains tax rate. The result was that the revenue from the capital gains tax decreased by 40% in the following year and for the next 5 years, revenue from capital gains was lower than prior to the increase in the tax.
In 1978, when the capital gains tax was scaled back, the capital gains revenue increased by 44% the following year.
So is my response just ideology or is it a recognition of reality. And if you can’t show where increasing the capital gains tax has increased revenue, then perhaps it is your mind that is ruled by ideology rather than reality.
p.s. We are talking specifically about capital gains tax, both in my example with Obama and the cases I cited.
Well, you know, the very rich and the very poor never seem to have enough money.
I seem to recall that Bush I followed the Democrats urging and raised taxes half way through his 4 year term. Did it lower the deficit? If it had I think he would have had a second term.
According to your statement, we need to raise taxes to pay for our current spending. And I can understand from an accountant point of view how we need to balance income with spending. But, from what I’ve heard from Obama so far we’ll have to raise taxes even further to pay for the billions upon billions of new spending he is advocating.
The other view that many on the Left ignore in this whole debate over lowering or raising taxes is me. Government and its ability to pay its bills isn’t the only entity involved. The more of my income the politicians take to pay for their spending the less I have to spend on my needs and wants. The less I spend the fewer businesses get my money.
I think I’ll try Obama’s tactic on my management. I’ll say, “Management, my spending has increased this fiscal year therefore you must increase my salary to meet this spending so that I don’t have deficit spending.” They’d probably take the conservative approach and tell me to cut my spending just so they can keep more of their own money.
We are still waiting ‘our paul’. And just to put Obama in context, here is what he said.
So even when the facts are presented to Obama, he still prioritized imposing his idea of ‘fairness’ over raising revenue. Is that really what you think the country wants in its tax system?
p.s. Bolded emphasis is mine.
Talk about incoming!!!
James Joiner was presented with the question: “Why do affluent, middle-class, and poor voters all seem so exquisitely sensitive to election-year income growth for the wealthiest families?â€ The flip side of the question is: “why are the poor and middle class population concerned with income inequality?â€
Mr. Joiner answer, implied this was a function of “relative deprivationâ€, a sociological postulate. My feelings were that deep-rooted ideology was at play, and my post was an attempt to stimulate further discussion on this point. To emphasize how ideology can obscure a problem I brought up the inanity of claiming that a decreasing capital gains tax increases revenue. This is a variant of supply side economics, which of course has lead to the relentless increase in the National Debt.
Bad mistake, the National Debt is taboo subject not to be discussed, and comparing Obama and McCain’s approach to taxes compounded the mistake. Others have pointed out that the ever increasing National Debt is not sustainable and is a threat to out national security.
Thus, my apologies to Mr. Joiner, I am sure his provocative response was aimed at stimulating a different discussion line… I of course fell into the trap of repeating a tune I had sung before when a slightly different, yet germane discussion was taking place.
In response to yetanotherjohn all I can say is that I presented a reference on Capital Gains tax, and a reference that graphs the mounting National Debt. He chose not to address either link, and buttressed his argument by providing a snip from Gibson’s exchange with Obama during the debate. I will try to close the discussion by answering his question: Yes John, I am part of that great unwashed that believes “fairnessâ€ should be part of the tax system.
I sympathize with Steve’s concerns about what the terrible Left is doing to his discretionary spending (cash left over after fixed expenses, such as taxes, clothing, food, housing, etc). If he has little one’s in the house, their share of the National Debt is in the range of 30,000.00 dollars, and climbing (reference in my original post). If they have reached the age of reason, I would not show them the graph of the National Debt in my original discussion piece…