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Why Trumponomics Makes Sense to Americans


Donald Trump has turned off a lot of policy wonks. But when it comes to taxes, according to a new survey, Trump’s plan is likely to be seen as the better choice than Clinton’s.

A new paper, which was published on Monday by the National Bureau of Economic Research, examines U.S. attitudes toward wealth redistribution. Matthew Weinzierl, an economist at Harvard Business School, asked 2,500 Americans to describe what they thought was a fair system of income redistribution in a world where a person’s income is wholly the result of luck.

Amazingly, even in scenarios where money just essentially drops in people’s laps, 50%-to-90% of all respondents argued against a system of redistributing wealth equally. And that’s despite the fact that rising inequality is arguably the most important social and economic challenge we face today. The implications of this go far beyond academic debates.

It means that there won’t be much public support for the government using its best tool for fighting economic inequality, the tax code. It also helps to explain why Trump has been successful at courting some working class voters who have borne the brunt of growing income inequality, even as his tax plan would bestow huge benefits on the rich. It appears that for most Americans, it is immoral to take too much of someone’s income, even if that income isn’t earned directly, like say from stock market gains or inheritance or just random luck.

This doesn’t mean, however, that Americans aren’t disturbed by the distribution of wealth and income in America. Other research has shown that Americans think wealth should be much more evenly distributed in America, but since they are also averse to using the tax code to make that a reality, they have been swayed to believe in other solutions to the problem, like Donald Trump’s assertion that renegotiating trade deals would bring back good paying manufacturing jobs that were lost to outsourcing.

One reason Weinzier posed for why Americans would be so opposed to wealth redistribution is the fact that human beings lose more satisfaction from loses than they gain satisfaction fro gains. This personal loss aversion may have developed into a moral aversion towards forcing losses on others without extraordinary justification.

Whatever the reason for the attitudes described in Weinzier’s paper, they are something that policy makers on both the left and the right are going to have to contend with as they try to tackle the rise of income and wealth inequality.