With stagnant wages and rising inequality already emerging as key issues in the 2016 Presidential race, there is, naturally, a lot of interest in how voters view the prospect of the federal government adopting more redistributive policies, such as raising taxes on the wealthy. Intuition and rational-choice theory would suggest that, as the gap between the wealthy and everybody else increases, support for redistribution goes up. But a number of empirical studies published in recent years have cast doubt on this theory, finding that support for redistribution has remained flat, or even that it has fallen.
For instance, a 2010 study by Nathan J. Kelly, of the University of Tennessee, and Peter K. Enns, of Cornell University, concluded, “When inequality in America rises, the public responds with increased conservative sentiment.” In a 2013 paper by Matthew Luttig, of the University of Minnesota, backed up this finding, noting, “the absolute level and the changing structure of inequality have largely been a force promoting conservatism, not increasing support for redistribution as theoretically expected.”
In the Times on Wednesday, Thomas Edsall argued, “Redistribution is in trouble, and that is likely to tie America in knots for years to come.” The Economist’s Free Exchange column this week said that “politicians betting on their Robin Hood credentials” should be wary of voters, particularly older ones, because they “may be more inclined to back the Sheriff of Nottingham.” On Friday, the Times published another piece, by Neil Irwin, that was headlined “Why Americans Don’t Want to Soak the Rich.”
On the face of it, these warnings seem justified. In addition to citing some recent academic studies, Edsall points to data from Gallup showing that, between 2006 and 2014, support for the proposition that the federal government should guarantee health-care coverage to all U.S. citizens has fallen from sixty-nine per cent to forty-five per cent. The Economist article cites a more recent study by three economists—Ilyana Kuziemko, of Princeton, and Vivekinan Ashok and Ebonya Washington, both of Yale—which says that declining support for redistributive policies is largely due to a shift in sentiment among the elderly. In the nineteen-seventies and eighties, people aged sixty-five and over were more favorably disposed to redistributive policies than the rest of the population. Today, they are less supportive than other age groups.
If that were all there is to say, it would be worrying news indeed for those, myself included, who support using the tax code and other policies to offset some of the alarming rise in inequality. Fortunately, it’s not the entire story. Although the survey data mentioned above shouldn’t be dismissed, it needs to be placed in the context of other findings suggesting that Americans have a favorable attitude to redistribution, particularly when it is couched in terms of taking from the rich rather than giving to the poor.
Last year, for example, Gallup asked a random sample of people for their views on “the way income and wealth are distributed in the U.S.” Almost seventy per cent of the respondents said that they were “very dissatisfied” or “somewhat dissatisfied” with the status quo. Fewer than one in three respondents said that they were “very satisfied” or “somewhat satisfied.”
O.K., you might say, but that was just a snapshot, and the survey didn’t ask about redistributive policies. What does Gallup have to say about how attitudes toward redistribution have changed over time? Quite a lot, it turns out. For the past thirty years, the polling firm has been posing two questions that specifically concern this topic.
The first question is “Do you feel that the distribution of money and wealth in this country is fair, or do you feel that money and wealth should be more evenly distributed among a larger percentage of people?” Since 1985, a majority of people have said that income and wealth should be more evenly distributed. The numbers have fluctuated quite a bit over the years. In the most recent survey, from 2013, fifty-nine per cent of respondents favored redistribution—a similar proportion to the first survey, thirty years ago, which found sixty per cent in favor. Yet the 2013 number represents a recent drop in support: in 2008, sixty-eight per cent of respondents said they favored redistribution. That might provide more support for Edsall’s suggestion that the Obama Administration’s policies, particularly the Affordable Care Act, have produced a backlash among some voters. Or it might confirm the theory, supported by a number of recent studies, that these days, in contrast to the nineteen-thirties, economic recessions tend to erode support for any form of government activism.
The other Gallup question is more pointed: “Do you think our government should or should not redistribute wealth by heavy taxes on the rich?” In 1985, forty-five per cent of respondents chose the option “Yes, should,” and fifty-one per cent chose “No, should not.” By 2008, the numbers had flipped, and a majority had emerged favoring heavy taxes the rich: fifty-one per cent of respondents chose “Yes, should,” and forty-three per cent chose “No, should not.” Did this more liberal attitude survive the Great Recession and its aftermath? Yes, it did. In 2013, the last time Gallup asked the question, fifty-two per cent of respondents chose the “Yes, should” option. “At this point, the American public would generally agree with Obama that wealth should ideally be more evenly distributed—and a modest majority, consisting mainly of Democrats and independents, appears to support the idea of bringing about that redistribution through heavier taxes on the rich,” Frank Newport, Gallup’s editor-in-chief, noted.
Other survey data confirm Gallup’s findings. Last year, for example, the Pew Research Center found that sixty-five per cent of Americans believe the gap between rich and poor has increased during the past decade. Even more striking, sixty-nine per cent of respondents, including forty-five per cent of Republicans, said that the government should do “a lot/some” to reduce the income gap. Just twenty-six per cent of respondents said that the government should do “not much/nothing.”
In addition to considering these findings, it is worth parsing the numbers in some of the recent academic studies. The paper by Kelly and Enns as well as the one by Luttig both use a sophisticated statistical model derived from economics (an error-correction model, if you must know) that can be difficult to interpret. The new paper by Ashok, Kuziemko, and Washington looks directly at data from the General Social Survey, which is conducted by the University of Chicago’s National Opinion Research Center and has been carried out every year since 1972.
Although the fitted trend line the authors present appears to show that the level of support for the proposition “The government ought to reduce the income differences between rich and poor” slopes slightly downward, the researchers acknowledge that they can’t statistically reject the hypothesis that it is actually flat—i.e., that support for redistribution hasn’t declined. Indeed, there is even a suggestion in the data that, since 2008, support might have increased a bit.
The researchers say that it’s too early to tell whether their findings reflect a sustainable trend, which is fair. Interestingly, though, the General Social Survey also asks people what they believe the government’s spending priorities should be. In recent years, “assistance to the poor” has been moving up the list. In 1996, it was ranked tenth, behind things like health care, the environment, and Social Security. But in the 2010 and 2012 surveys it moved up to second place, trailing only education—a finding that appears to contradict the idea that the electorate is getting more conservative.
Another important consideration in looking at attitudes toward inequality is whether voters adopt more liberal policy positions as they learn more about the issue. In an article collected in a 2013 book about political representation, the political scientists Jacob Hacker, of Yale University, and Paul Pierson, of the University of California, Berkeley, point to evidence from the American National Election Studies project, a long-running survey, that suggests having more information does change people’s attitudes. For many years, the survey has asked people whether it is the government’s responsibility to reduce the income gap between rich and poor. Typically, the positive responses were low—only about twenty-five per cent. In 2007, the survey changed the wording of the question, to detail how much money people at the top and bottom of the income distribution actually earned. “This time, 57 percent favored reducing income inequality,” Hacker and Pierson write.
In a 2013 paper, four economists—Kuziemko; Michael Norton, of the Harvard Business School; Emmanuel Saez, of Berkeley; and Stefanie Stantcheva, of Harvard—reported some less supportive evidence. Using Amazon.com’s Mechanical Turk platform, which pays people to take part in surveys, the economists presented their subjects with some pertinent information about inequality, such as how much money the rich make compared with the middle class, and the fact that average family incomes have grown more slowly during periods when the top tax rate was low. Then they asked the subjects some policy questions. Perhaps surprisingly, the researchers found that supplying information didn’t increase support for redistribution to the poor. Support for taxing the rich did go up, but not by very much. “Of course, a single paper can only say so much,” Kuziemko wrote in an e-mail. “But I do think our results cast some doubt on the argument that if only Americans knew about the high levels of inequality, they would surely demand more redistribution.”
That sounds like a reasonable conclusion. However, it isn’t the only significant finding from the experiment. When the researchers presented to their subjects a slide showing that the estate tax currently affects only about 0.1 per cent of estates—the very richest ones—they found that this knowledge “has an extremely large positive effect on estate tax support, even increasing respondents’ willingness to write to their U.S. senator about the issue.” Since changing the way estates are taxed—by, for instance, eliminating the “step-up in basis” loophole—seems likely to be part of the Democratic platform in 2016, this result has immediate political implications. And, more generally, it suggests that giving people more information about specific inequities and policy proposals, as opposed to citing over-all statistics about inequality, can have a big impact on voters’ attitudes.
So what’s the takeaway from all of this? It is important to acknowledge that rising inequality doesn’t, by itself, generate a surge in support for redistributive policies. It’s also a concern that the passage and implementation of the Affordable Care Act appears to have undermined support for guaranteed health-care coverage—although it’s not absolutely clear to me whether this finding reflects a shift against the redistributive subsidies that are part of the act, or a lack of enthusiasm for the reform in general. (Polling data from the Pew Research Center, the Kaiser Foundation, and other organizations suggest that the public has been cool on the A.C.A. since before it was passed, in 2010.) But taking all of the evidence together, my take is that a progressive policy agenda, if carefully presented, can still win popular support.
To be sure, it isn’t enough to simply point to the rise in inequality and expect an outpouring of mass support for any and all liberal policies. The argument for each proposal has to be made on its own terms, and Americans still show little enthusiasm for anything that smacks of welfare. Would-be reformers also need to avoid alienating seniors, whose declining support for redistributive measures probably reflects a fear that such policies would come at their expense, in the form of cuts to Social Security and Medicare. Still, the polling data shows that a healthy majority of Americans believe that income and wealth should be more evenly distributed, and that a smaller, but steady, majority believe that the current situation justifies heavier taxes on the rich. That surely gives the Democrats something to work with.
It all comes down to individual policies. In the cases of the estate tax, the “carried interest” deduction enjoyed by hedge-fund managers and private equity, and other loopholes that benefit the very wealthy, would-be reformers can appeal to the voters’ sense of fair play, which remains undiminished. In seeking to expand support for working families—for example, by expanding the earned-income tax credit—progressives can appeal to the widespread sympathy for the working poor. When presented in general or ideological terms, redistribution has always been a tough sell. But when the debate gets down to specific proposals, redistributive arguments can still win out.
