Most politics are about wealth redistribution.
Whether you’re debating Medicare and Social Security, or Defense Department expenditures, the question is not just what to pay for, but who should ultimately pay for it. Through this process, wealth is distributed from one group to another.
But the American people in particular are extraordinarily deft at pretending that this isn’t the case. Social Security and Medicare, which account for nearly 40% of all federal government expenditures, are taxed separately from income because these programs were founded on the pretense that they are simply a forced insurance plan that Americans earn throughout their working lives.
However, what Americans earn in Social Security and Medicare isn’t based on how much they make; it’s based on age, need, or other factors. Americans consistently take more out of these programs than they pay in, a dynamic enabled by the growth in the population and the economy over time. These programs aren’t insurance as they were sold politically, but redistribution of wealth from the young to the old.
Largely because of these programs, the wealth redistribution the federal government engages in benefits the elderly most of all. Another group that benefits disproportionately from redistributive programs are African Americans, given that they are much poorer as a group than the median American. But according to a paper released last week by The Brookings Institution, these are the two groups that “have most moved against income redistribution” since 1978.
Despite the marked increase in income inequality over that same period, Americans on the whole haven’t changed their minds about redistribution. Elderly and African Americans do, however, support these policies less than they did a generation ago, while the data showed a “slight increase” in support for redistribution among the wealthy.
These results left the authors of the paper—Vivekinan Ashok, Ilyanan Kuziemko, and Ebonya Washington—scratching their heads. While African Americans still support race-based aid at higher rates than white Americans do, their support on this question and on economic redistribution has begun to converge with the rest of the country, despite the fact that overall economic progress for African Americans has stalled.
The decline in support among older Americans is easier to explain. According to the authors, about 40% of the decline in support for redistributive policies is the result of self interest. It’s not so much that seniors are opposed to all redistribution, the authors find, but they are skeptical of universal health care policies that might endanger funding for programs like Medicare that benefit them specifically.
In general, economists start from the position that people act in their own self interest. But people often vote against their economic interests, and this study is further evidence of this behavior. One explanation for this is that while income inequality has increased in the past generation, there is a great deal of fluidity in terms of who is among the top earners from year to year.
I wrote recently about the work of sociologists Thomas Hirschl of Cornell University and Mark Rank of Washington University, which showed that nearly 70% of U.S. households will spend at least one year in the top 20% of incomes, while half of all households will experience at least one year of poverty. Statistics like that make it much easier to believe that people who might spend much of their lives struggling to make ends meet would be skeptical of wealth redistribution, or vice versa.
Political pundits often distinguish between the so-called “culture wars” in American politics on subjects like gay marriage or abortion, and kitchen-table issues like spending and taxes. The difference between the two is supposedly that one’s views on the first are based on culture and the other material circumstance. But the research suggests that even the battle over economics is much more about culture than finances. After all, 77 of the 100 poorest counties in America voted for Mitt Romney in 2012, the man who described the 47% of Americans who pay no federal income tax as “takers.”
If that doesn’t convince you that economic policy is just another front in one, big culture war, nothing will.
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