Rich for McCain, super-rich for Obama

[Surlethe]

WSJ blog

The Rich Support McCain, the Super-Rich Support Obama

In Richistan, I wrote about a new political divide emerging among the wealthy. While most Lower Richistani’s ($1 million to $10 million in net worth) were voting Republican, most Middle-and Upper Richistanis (those worth $10 million plus and $100 million plus) were voting Democrat.
mccain03_D_20081013160318.jpgAssociated Press


Lower Richistanis tended to vote almost exclusively based on taxes. But Upper Richistanis placed a higher priority on longer-term societal issues like health care, the environment and education, which are traditional Democrat issues. Some say Upper Richistanis can afford to minimize taxes, since they have plenty of money even after the government takes its share. Others say the ultra-rich have better tax attorneys so they don’t care as much about tax rates.

Yet a new survey shows that the Richistan split is not only alive and well, but it may even be growing.

According to a new survey by Prince & Associates, voters worth $1 million to $10 million are favoring Sen. John McCain, while voters worth $30 million or more are favoring Sen. Barack Obama. The survey of 493 families showed:

More than three quarters of those worth $1 million to $10 million plan to vote for Sen. McCain. Only 15% plan to vote for Sen. Obama (the rest are undecided). Of those worth more than $30 million, two-thirds support Sen. Obama, while one third support Sen. McCain.

The reason? Taxes.

Among Lower Richistani’s, 88% cited tax policies as being “important” in making their decision. Only 11% cited the environment, 22% cited health care and 45% cited social issues.

Among the Upper Richistani’s supporting Sen. Obama, tax policies ranked last, with only 16% citing them as important. “Social issues” ranked first, with “policies dealing with wars” ranking second (67%) and Supreme Court nominations and health-care issues ranking next.
Of course, in today’s populist politics, the only thing worse than being the candidate of the wealthy is being the candidate of the superwealthy. You can bet this is one poll that neither candidate will repeat on the campaign trail.

But the survey offers an important insight into the effect of wealth on personal politics. Perhaps the old saying should be changed to: If you’re ultrawealthy and conservative you have no heart; if you’re wealthy and liberal, you have no brain.

I find what this says about the priorities and the opinions of the super-wealthy to be quite interesting. After $30 million, is there something in the human brain that makes additional taxes simply unimportant?

[General Zod]

I find what this says about the priorities and the opinions of the super-wealthy to be quite interesting. After $30 million, is there something in the human brain that makes additional taxes simply unimportant?

Unless you're an incredible miser I can't imagine anyone with that kind of wealth being terribly concerned with a tax increase of a few extra percent here and there.

[Surlethe]

I find what this says about the priorities and the opinions of the super-wealthy to be quite interesting. After $30 million, is there something in the human brain that makes additional taxes simply unimportant?

Unless you're an incredible miser I can't imagine anyone with that kind of wealth being terribly concerned with a tax increase of a few extra percent here and there.

But why does it seem to kick in after $30 million and not after $1 million? Is there that substantial a difference in living standard?

[aerius]

But why does it seem to kick in after $30 million and not after $1 million? Is there that substantial a difference in living standard?

At $1 million you're only one major medical emergency away from the poor house, with $30 mil you're set for life unless you do something monumentally stupid.

[RedImperator]

Keep in mind, the figure they're using is net worth, not net income. One million in net worth is nothing to sneeze at, but for many people, that wealth is tied up in illiquid assets like a business, investments, and their home. So a tax increase may represent a significant dent in their monthly take-home.

$30 million probably isn't some kind of magic psychological line; you'll notice that there's a $20 million gap between McCain supporters and Obama supporters, indicating voters making between 10 and 30 million are divided. Above $30 million, there's probably almost nobody who would actually notice the bigger bite of the Obama tax increases. Under 10, there may be quite a lot. In between, it's probably, well, in between.

[lance]

But why does it seem to kick in after $30 million and not after $1 million? Is there that substantial a difference in living standard?

At $1 million you're only one major medical emergency away from the poor house, with $30 mil you're set for life unless you do something monumentally stupid.

Like investing 15 million into the return of Beta.

[Mr Bean]

But why does it seem to kick in after $30 million and not after $1 million? Is there that substantial a difference in living standard?

Remember it's net worth not yearly income. So in lower richstain you see lots of people, small business owners, lower scale executives. People who are "well off" but not yet wealthy. They can't go out an buy a 300k yacht on a whim yet because they only make half a million a year. They may only have a single million dollar house not three or more of them.

Specaility Doctors, Lawyers, small issue Lobbyists, Professionals, lots of people fall in this bracket while 30 million+ in net worth you see "world famous" something, the best Surgeons in the world. Large issue lobbyists(Oil/Guns/Foreign governments), Actors, Rock-stars, Rappers, people who have a name.

You can make it into Lower-Richastan if you work hard for ten-twenty years towards something, to make it to upper richstan you need a little luck or the right parents/connections.

[Ender]

10 million is the dividing line because at that point you have "fuck you" money. At that point, the average interest you make off that much wealth is going to be about your yearly expenses and work income combined. At 10 million, your tax rate doesn't greatly matter because you will see pretty much zero change in your standard of living or options available to you. You can tell everyone "fuck you" and they can't really do much because your wealth takes care of itself. I'd imagine the divider at 30 million is just assuming a lower rate of return on your investments given the current economy slump.

[Nephtys]

I find what this says about the priorities and the opinions of the super-wealthy to be quite interesting. After $30 million, is there something in the human brain that makes additional taxes simply unimportant?

Unless you're an incredible miser I can't imagine anyone with that kind of wealth being terribly concerned with a tax increase of a few extra percent here and there.

But why does it seem to kick in after $30 million and not after $1 million? Is there that substantial a difference in living standard?

In Southern California, most middle-class houses are about 1 million.

The studies that the OP mentions is 5 mil. After having 5 Mil, your spending becomes a lot less considered, since most expenditures really won't impact you at that point.

[ArmorPierce]

After a wealth point, life becomes more like a game of sim city I suppose.

[Hillary]

Could I retire on £1m and retain the same standard of living? No.

Could I retire on £15m and retain the same standard of living? Yes.

$1m net worth is not that rich to be honest. As Nephtys says, it's middle class wealth, not rich.

The same would probably apply in the UK imo. The most vocal group over taxes here tends to be the middle classes. I guess it's the fact that most people have a "looking after No.1 " mentality towards politics, until they get into the realms of super rich.

I get rather funny looks when I say that I think I should be paying more tax (which I do, the percentage of income that is paid in tax by the poorer sections of the UK is outrageous), which seems to bear out this point.

[Alan Bolte]

The most vocal group over taxes here tends to be the middle classes. I guess it's the fact that most people have a "looking after No.1 " mentality towards politics, until they get into the realms of super rich.

This reminds me of the Ohio minimum wage law that was on the ballot in 2006. My mother is a kind, generous woman, but she opposed the minimum wage increase. Not because she was opposed to a minimum wage ideologically, or because she thought it was quite sufficient, or because she thought it would hurt the local economy. All of those would be reasons I could respect, regardless of whether I agreed. She opposed it because she might have a pay a little more for certain products and services. We could easily afford it, but she's looking out for number one.

Also, don't be so quick to assume that the super rich aren't looking at their bottom line. Perhaps they don't think that Obama or Congress will go through with the tax plan. Perhaps they think they'll have better opportunities to make money under Obama, regardless of taxes. Perhaps they think they'd somehow have more influence over an Obama presidency, and the loss of wealth is offset by that second-hand political power. Perhaps they just aren't expecting to pay much tax on income, because most of their normal income is in dividends and capital gains that they would be minimal anyway in a big recession.