Politicians’ wealth and the tax policies they support
by Linda Beale
Politicians’ wealth and the tax policies they support
A story in the Boston Globe by Britt Peterson on Feb. 19, 2012 explored “Why it matters that our politicians are rich” (available here on Boston.com). A key point–the four remaining GOP presidential candidates all are millionaires, with most making more than a million a year and worth multiple millions, while the median net worth of members of Congress is “$913,000, compared with $100,000 for the rest of us.” Id. That should worry us because, as the article reports, studies have shown that rich people become more focused on their own well-being, less empathetic with the suffering of others, more likely to view their own wealth as due to merit (and others’ lack thereof to reflect lack of merit), and ultimately to make them “more callous, self-absorbed, and self-justifying than the people they represent.” Id.
In 2009, Michael Kraus, Paul Piff, and Dacher Keltner, all then of Berkeley (Kraus is now at University of California, San Francisco), published research that divided up sample groups by family income as well as self-reported socioeconomic status. People of higher socioeconomic status were more likely to explain success or failure as a result of individual merit or fault; lower-class people, on the other hand, felt less control in their own lives and were more likely to blame events on circumstance. In other words, higher-status people were more likely to feel that they’d earned their high place in society, and that poorer people hadn’t.
More recently, similar research—involving not just surveys, but heart-rate measurements —has found that higher-status people tend to be less compassionate toward others in a bad situation than people of lower-class backgrounds.
The result of these differences, say researchers who work on money and social class, is that people who are confident in their status have a completely different worldview from those who lack that confidence: more self-involved, self-justifying, and even, as the dehumanization study suggests, crueler. And the higher up the spectrum you get, the stronger the effect . . ..
Power itself can trigger similar changes. . . . Gaining a sense of power, then, even if it happens through random selection in a lab, alters you on a very basic level, making you “less attentive to others, more free to act, and more free to act in a way that doesn’t take account of other people,” said Adam Galinsky, a psychologist at Northwestern’s Kellogg School of Management who has been studying the effects of power for a decade. Id.
That sense of personal merit (and lack of responsibility in others) can lead to disastrous policy choices. The “ownership society/personal responsibility” mantra of the Bush presidency justified heaping tax breaks on large corporations and their owners/investors at the top of the income distribution while preaching deunionization, privatization, and safety net withdrawal. It permitted a method of bailing out “too big to fail” banks from the financial crisis they caused by profiting immensely from risky speculation (made possible by deregulation) in ways that didn’t require a clawback of the rentier profits received by the “ownership class,” resulting in privatization of gains/socialization of losses. In essence, the “ownership society/personal responsibility” mantra provides justification for class warfare on the middle class and poor who happen not to be as well-off as the rich.
Similarly, Congress’ inability to empathize with ordinary Americans has led to significant numbers of Congresspeople (particularly members of the GOP) who support privatization of Social Security, reduction of benefits under Medicaid and Medicare and unemployment insurance at the same time that they continue to argue for zero taxation on the unearned income of the rich. And each of the GOP presidential candidates reflects that overarching goal of reducing taxes on the ownership class. See, e.g., Gingrich’s “optional 15% flat tax” (zero tax on unearned income); Cain’s 999 transitioning to a national retail sales tax proposal (a flat consumption tax that would be heavily regressive and leave rentier profits of the wealthiest essentially untaxed); Santorum’s tax proposals (even less protective of the poor than Gingrich’s), Romney’s tax proposals (including zero taxation of estates, extraordinarily low taxation of corporations, etc.). Rather than supporting a repeal of the “carried interest” loophole that allows private equity fund managers like Romney pay ridiculously low tax rates on their very high compensation income, these candidates and politicians support continuing the tax policies of redistribution upwards that have led to the decline of the middle class as the “ownership class” gathers for itself all the productivity gains of the economic system.
crossposted with ataxingmatter
nothing very surprising about the rich thinking they had earned it by “hard work” and being smarter than the rest of us. nothing surprising that the poor think they (the poor) got bad breaks.
and while it is well that you point this out as it affects our Congress, I think it might be more to the point that we have slid into a situation where the Congresspeople are essentially criminals looking out for their own main chance, which means taking care of the people who take care of them.
money has always had a big effect on politics.. perhaps somewhat justifiably. but I think it didn’t use to be so easy for money alone to buy elections.
Some of the descriptions of the positives makes me think they also promote “Group Think”. Humans are funny critters.
i don’t know about funny. but the psychology of people in groups is too well understood to have much doubt about what to expect. of course the people with the money buy the best expertise.
Do you ever get the sense that these posts and their related comments is analogous to the proverbial dog chasing its tail. None of the information provided in this post is new news. Having it codified within the rubric of a “scientific study” gives it no greater impetuous than its self evident character to those with open eyes. We talk endlessly about the avaricious greed of those who enjoy the greatest accumulation of goods, services and assets. We point out the deviousness of their plans to accumulate yet more. We discuss their insipient self serving behaviors and influence. When does this merry go round of discussion and dissection stop and change actually begin to happen? has the committee reached a decision yet? Will it ever?
Funny, my husband and I were just talking about this earlier today. Also of note, many of our politicians (specifically on the right) are born into vast sums of money they themselves did nothing to earn. Nor do they contribute to the betterment of America – except in their own minds. We need publicly funded elections to help even the playing field. Perhaps then we can elect people that actually deserve and will do a solid job of representation.
“specifically on the right”
Let’s put some facts behind that:
For the Senate (data is only through 2009)
Average of Democrats average net worth: $18 million
Average of Republicans average net worth: $7.9 million
i am not in a position to dispute your numbers. and it would not surprise me that many of our “democratic” politicians are both rich and favor policies that favor the rich. but if you listen to the rhetoric, the R politicians are insane in their worship of the rich and their characterization of the poor as shiftless.
that said, i think some rich people are smart enough to see that they make more money when the poor are cared for. and some rich people seem convinced that there is only so much to go around and they better grab it all before the dems give it to some welfare cheat. sadly, some poor people are convinced of the same thing.
Averages don’t vote. 14 of the top 25 are Repubs in either house (2010); 12 of 25 in the Senate are Repubs, and 19 of the top 25 in the House.
The point isn’t simply who has all the money. It has more to do with who has the money in relationship to how they react and relate to the world around them. how many of those lower ranked Republicans are groveling at the feet of the .01 %?
Yes, elected Democrats are too often as blinded by their own largesse, but on the whole it is the Republican Party, especially the current rendition, that is seeking to cut the life lines to the poor and put the weight of the government on the backs of the middle class.
“either house” doesn’t matter since Senators can’t vote in the House and vice versa. And since there’s 4x as many Representatives as there are Senators, the vote of a single Senator strikes me as “worth” more than the vote of a single Rep. From the link I provided above, 7 of the top 10 Senators are D, as are 15 of the top 25, 26 of 50 and 53 of 100. In other words, in addition to massive wealth disparity favoring D, in the Senate they are “over-represented”.
As for the original post, – “That should worry us because, as the article reports, studies have shown that rich people become more focused on their own well-being, less empathetic with the suffering of others, more likely to view their own wealth as due to merit (and others’ lack thereof to reflect lack of merit), and ultimately to make them “more callous, self-absorbed, and self-justifying than the people they represent.” – I guess all of these things only apply if there’s an R next to one’s name – even though, if memory serves, self-identifying conservatives donate both more time and money to charitable causes than self-identifying liberals.
I think a “must read” on this topic is Thorstein Veblen’s Theory of the Liesure Class. He points out this psychology is based on the idea that “honor” accrues to those who gain their wealth through “exploits” rather than “production.”
i think you, and maybe I and even the author of this post, are missing the point. The congress is largely made up of “rich” people, in both parties, and they have been enacting policies that favor not just the rich, but the criminal rich, for. oh, many years. I think this may always have been true with the brief exception of the New Deal when overwhelming facts forced policies that had to favor the poor in order to save the rich. for a decade or so after that it paid politicians to at least sound like they favored the poor at least marginally. After Reagan even that was not necessary.
moral, for me at least, is that the rich are in charge… as they always have been… and they have psychological blinders that keep them from even seeing the problems, much less understand them or do somethinga bout them.
and all this Democrats vs Republicans is just the crap they want you to be fighting over while they do the deals necessary to keep themselves in charge.
as for R’s and D’s relative contributions to charitable causes… you need to understand that bit about not letting your left hand know what your right hand is doing… or the tax man. that and the fact that “most” D’s live in urban situations where personal charitable giving will not address the problem, while the R’s tend to live in situations where they know who their neighbors are, and old fashioned charity makes some sense.
stop being such a sucker for paid advertising.
One distinction between the wealth of the rich and the wealth of the producers is that producers’ production is always constrained by real world factors. Ditch diggers and doctors can only dig so many ditches or cure so many people in one day. Cooks can only cook so many souffles and their customers can only eat so many.
But in finance, those physical constraints are largely avoided. Their money, like old fashioned bakery advertisements, grows while they sleep. Their physical capabilities are magnified far beyond any level they could have reached in the absence of capital.
Although the total produce of any population is also far beyond what they could do as individuals, this total is also constrained by real world factors. So if a large fraction of the total wealth is bled off by a small number of persons, the effective result is impoverishment of all — a reduction of productivity when seen from the viewpoint of the majority.
Lets just find reality and stop over thinking we know at least 51% of ,Americans are just Stupid and spoiled and are totally clueless to whats getting ready to happen . Think about this All politicians are at least 99% of them .If you have to spend 30 million dollars to get a couple hundred thousand a yr job you can only be a crook .I know first hand i worked for one of our ,3 word agencies i retired at 40yrs broke in 2008 because i really know whats going on .I think where already in the next generation history books ,right after the fall of Rome ,the Byzantine empire .Read that and you’ll see are future .PAUL