Aspiration, ignorance and support for wealth redistribution

I’ve been sitting on this post by Kevin Drum for a week trying to figure out how to get through my response to its core idea without writing 20 pages. Drum (and Ezra Klein before him) focuses on the idea that private sector workers’ envy of public sector workers’ job security is at play in people’s responses to recessions. Now, I’m not entirely sure I buy this as a central feature, given that the general public has come to bat for the public employee unions during this recent unpleasantness in Wisconsin, but this is really a jumping off point for something sort of related.

Both Drum and Klein share a chart showing changes in private and public sector employment during the Obama Administration. The public sector looks fairly flat, though gradually declining, compared with the private sector, which cratered but has been crawling back up. Since roughly March 2010, they’ve been moving toward convergence, with the exception of the one-month census hiring spike. But when you ask the public about this, or when you listen to Republicans talk about it, they have no idea what’s actually going on. So here’s where I’m going with this (and this is where I decided to just delete a lot of explanatory material):

Do people really see themselves as someday being rich?

Kind of a logical chasm there, I know. But when we hear redistributionist policies mooted in the broad political discussion, we’re often told that the general public opposes increased taxes on the upper class because their aspirational feelings are so strong that they believe they will one day be subject to those confiscatory 39% marginal rates. A similar take is that middle class people, whether they see themselves as the future-rich or not, know that it’s just not fair to raise rich people’s taxes, even if they themselves will benefit. I imagine these are very comforting explanations if you are a rich person.

But allow me to be not-at-all the first to suggest that this is the result of rank ignorance. Some of this is well documented. Last year, a CBS News/New York Times poll found that just 12% believed their taxes had been lowered by Obama — in reality, 95% of Americans’ taxes had been lowered — and that an insane 24% believed their taxes had gone up. But OK, you could call this ignorance, but you could also call it being misinformed (by, say, certain news outlets) or a descent in agnotology. There are those with political and financial interests in convincing voters that what is false is true when it comes to taxes.

So how about this: To what extent can we suppose the typical American understands what benefits he or she receives from the public sector that are paid for with tax dollars? This goes beyond the facile argument about which states pay in more or less than they get from the federal government, with tendrils reaching out to the many spots noted by Tom the Dancing Bug — call it the “Keep the Government Out of My Medicare!” problem. Can we possibly have a meaningful debate about the trade-offs in expenditures and revenues if the public has no idea what’s happening in either of those categories?

Share this post:

    Tags: , , ,

    • CandyG

      Short answer: no. The media is too busy sharing poignant tales of individuals who have either lost their homes to foreclosure based on “bad” banks or have been laid off or can’t find a job to support themselve and their children/spouses/parents/other family members to offer an real indepth look at the true financial picture here. We’re too focused on the numbers (8.9% unemployment! 40% foreclosures!) that are being bandied about, rather than on what they mean on Main Street. The truth is, most people don’t really know what they pay in taxes or where the money goes. Right now, they simply want a big refund from the IRS without bothering to look at the bottom line of what that makes their effective tax rate (too high!).