October 19, 2004
IT SELLS IN EUROPE:
Kerry fails to convince middle classes his tax plans are good for them (Christopher Swann, October 19 2004, Financial Times)
For many international observers, John Kerry's tax proposals seem like an easy sell - roll back the tax cuts on the richest 2 per cent to fund new tax breaks for the middle class.In the final two televised presidential debates the Democratic candidate once again tried to remind American voters that some 98 per cent of them would be better off under his plans.
But when Americans are asked whom they trust to handle tax policy, they consistently opt for George W. Bush over Mr Kerry. So what accounts for Mr Kerry's failure to persuade a majority of Americans that his tax plans would benefit them?
Academics say part of the answer lies in widespread delusions among Americans about where they fit in the income pecking order, combined with a lack of knowledge of the tax system.
In presenting his plans on tax, Mr Kerry has been forced to tiptoe through a cultural minefield. Americans traditionally respond negatively to tax systems that appear to take from the rich to give to the poor.
A key reason may be that many Americans believe they are rich. In a US survey by Time Magazine in 2000, 19 per cent of respondents thought they were in the top 1 per cent of earners and another 19 per cent believed they would be one day.
There's the epitaph for the Democratic Party (1932-2000): If only appeals to class envy worked in America, we'd still be running things today. Posted by Orrin Judd at October 19, 2004 4:09 PM
Perhaps Americans don't like Kerry's policies because Nobel Laureate Economists call them "pretty damn stupid." See http://www.azcentral.com/arizonarepublic/business/articles/1019Prescott19.html
Posted by: Bret at October 19, 2004 4:16 PMWell, obviously 19% of Americans are not in the top 1% of income earners, but substantially more than 1% will be in the top 1% sometime in their lives. The left is oddly blind to life-cycle earning and our mobility up and down the income scale.
Plus, everyone knows that saying, "we're only going to increase taxes on everyone earning over $200k" is code for, "America, your taxes are going up."
Posted by: David Cohen at October 19, 2004 4:20 PMFirst they came for those making over $200k per year and I said nothing because it wasn't me. Then they came for those making over $100k per year and I said nothing because it wasn't me. Then they came for me and there wasn't anyone to say anything.
Posted by: MB at October 19, 2004 4:29 PMDavid:
I think Americans have figured out that there ain't enough money in the top 2% to fund Democrat dreams.
Posted by: Fred Jacobsen (San Fran) at October 19, 2004 4:36 PMAcademics say part of the answer lies in widespread delusions among Americans about where they fit in the income pecking order, combined with a lack of knowledge of the tax system.
In other words, us peasants are too stupid to appreciate how much smarter than us Senator Kerry is.
Oh, gee, I'm sure that line of argument's gonna be persuasive!
Posted by: Mike Morley at October 19, 2004 4:36 PMThe interesting question to me is what happens when that guy who thinks he's 99th percentile finds out that he's actually 85th.
It seems as though the FT expects disappointment; I would think it often would be glee at the discovery that there is yet more money to be had out there.
Posted by: mike earl at October 19, 2004 4:46 PMDemocrats define rich as someone with a job.
Posted by: h-man at October 19, 2004 4:52 PMKerry might have an easier time with his proposals if he would guarentee everyone in the country access to whatever tax attorney got Teresa her 12 1/2 percent rate on her 2003 returns.
Posted by: John at October 19, 2004 5:03 PMWe also remember that previous "soak the rich" tax plans ended up soaking the middle class as inflation and economic growth raised the middle up to the "rich" zone in only a few years.
Posted by: Jeff at October 19, 2004 5:19 PMAmericans may be deluded about where they fit in on America's income scale, but possibly a large percentage of Americans realize that they're rich compared to the rest of humanity.
As Mike Morley says, America's hoi polloi can be foolish, but they aren't stupid.
I agree with David Cohen, MB, Fred Jacobsen, and Jeff: "We'll only increase taxes for those making over $ 200,000" is a stalking horse.
Posted by: Michael Herdegen at October 19, 2004 6:05 PMThis will also play very badly in some high cost blue venues like LA, Frisco, New York, etc where $200K isn't really rich once the cost of housing is taken into account. Won't turn NY or MA but it could have an effect in NJ and Eastern PA.
Posted by: Jeff at October 19, 2004 6:12 PMThe super-rich -- like the Kerry's -- earn their money the old-fashioned way: they clip coupons from their tax-exempt bonds. So it doesn't matter to them how high the top rate goes.
Those on their way up the economic ladder pay the top rates on their income from wages, business profits, rents, and capital gains (partly exempt).
So "taxing the rich" barely touches those who are already rich... only those who want to be. And that is a lot more than 1% of us.