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Wednesday, September 28, 2011

Jon Chait has a very good post on the class and perceptions of class war.

He notes that the vast majority of US adults support higher taxes on the rich while elite commentators assert that such a proposal appears to the Democratic base but repels moderates. They are half right, it has 66% support among members of a party's base. That would be the level of support for the Buffet rule among self identified

How can people like Brooks and Penn be so totally wrong about something so simple ?

I have my usual comment

This is an excellent and important post. I have long been puzzled by the huge disconnect between public opinion on tax progressivity and elite opinion about public opinion on tax progressivity. As you note, overwhelming enthusiasm for increasing the share of taxes paid by the rich is not new. Gallup has found that majorities over 60% say the rich pay less than their fair share of taxes in every poll on the subject starting in the very early 90s. Yet somehow the elite only just noticed.

The influence of CEOs and other super rich people is clearly part of the explanation. I think it is also true that actual tax proposals involve increasing taxes on the rich but not super rich. Many elite opinion leaders are, by normal peoples' definition rich. But they (or do I mean you ?) don't feel that way.

Also media corporation CEOs are particularly influential. I think this happens even if they try not to influence reporting and commentary.

Here I think a key issue is that it isn't enough for people to carefully prevent their personal self interest from influencing anything they say and write. My idea of what happens is that one person proposes higher taxes on incomes over $250,000 and the listener winces. I am very very acutely aware when a proposal is not welcome, even if the other person is careful to be polite and non-commital.

HerI think it would be useful to ask people about facts in the public record. We can't compare tax rates which people support to the objectively right tax rate. But we can ask people what is the median household income, what is the 95th percentile etc. Then we have the true numbers (they are just statistics). We can actually ask and compare with reality both do that corrected for SMSA specific price levels (it is a hassle but it can be done).

I guess that the elite will guess vastly higher than accurate dollar amounts. As for the correction for prices, I'm dead solid certain that the elite will claim that DC and NYC are vastly more expensive compared to the country as a whole than would anyone who looked at actual prices (including the cost of housing). Of course, price indices are, like optimal tax rates, and unlike household dollar income levels, a matter of constant controversy.

I think that when the elite think of normal typical Americans, they think of a family with an income somewhere from $100,000 to $150,000 per year, that is two to three times the median family income. It would be easy to understand how opinions about opinions are out of touch with reality if opinions about plain facts are out of touch with reality.

Note I use "elite" to refer to power and influence and not to any sort of ability at all (you started it, you mentioned Penn).

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