US Public Opinion on Income redistribution

by
Robert Waldmann
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I am going to give a hostage to fortune. I am going to guess that the preferred policy supported by a majority of US respondents on questions about redistribution of income is that which would directly serve the narrow short term economic interests of a (probably different but overlapping) majority of US respondents.

I am guessing that the majority view is that view which would be the majority view if everyone were selfish (and out and proud selfish when polled).

Before checking, I can think of one arguable exception — there is majority support for a higher minimum wage even though only tiny minority now receive the minimum wage and a small minority receive a wages lower than the proposed new minimum. Here I think I can appeal to “directly”, “narrow” and “short term”. Selfish people who consider only direct effects would assume that the cost of a higher minimum wage would be born by employers, who are few (and maybe people unemployed because of the higher minimum wage who are also few). In fact, I guess that most people consider discussion of the incidence of policy to be BS and do, in fact, think of the direct effects (that is effects in a static model).

OK off to polling report to check

Update: I have checked but not learned much new (as I regularly look at pollingreport). I have found one other exception (which I should have remembered). Most respondents oppose a top income tax rate of 70%. I now recall reading that. I personally think the top income tax rate should be 70%. I also recall a time when it was (when I was 2 through when I was 20 — I don’t recall the time when it was 91% and I was under 2). Here I think what is happening is that people now consider 70% way too high. Even if people want to raise taxes on high incomes (many many polls show this) they don’t want to raise them that much. I should have remembered this (I now recall being very displeased by the poll).

Before going on, I note the very large majorities who want to cut foreign aid (redistributing away from them) and the passionate hatred of the long ago AFDC program (changed to TANF and basically allowed ot whither to almost nothing). Oh also majority opposition to affirmative action.

OK now my point (if any) the fact that the majority supports the same policy that the majority would support if people were selfish* does not mean all people are selfish or that the majority is selfish. This should be obvious but I will provide a little thought experiment.

Imagine 80% of people are totally altruistic and public spirited and care no more about themselves than anyone else and 20% are totally selfish (oh and both otherwise have the same distribution of characteristics including income and wealth). If the altruistic 80% splite 40% to 40% on an issue, the overall majority would support the position supported by a majority of the selfish 20%. Given the assumption in () this means the majority of this society would support the same policy supported by a majority in a society which is just the same except 100% of people are totally selfish.

I think the explanation of the dismal pattern (with one or two exceptions) which I noted is that pollsters choose questions on which opinion is divided and, in particular, in which the opinion of public spirited people is divided.

In particular 70% was chosen, because the pollsters know that a huge majority would support raising the top bracket to 45% and almost no one wants 105%. They aimed for a question so that it would be news that over 50% supported either position.

The pattern is useful to opportunistic politicians. It is quite easy to guess how public opinion will split on controversial questions which regard income redistribution. Democrats have often forgotten this (but know it now, so this post is pointless).

*and unenlightened and shortsighted or at least dismissive of arguments about unintended consequences.