
Economics focus: Don’t look down - diogenescynic
http://www.economist.com/node/21525851
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rbranson
In summary: lower & middle class people don't like it when those living in
poverty are recipients of social welfare because it makes them feel as if they
are socially equal to those welfare recipients.

This is an interesting hypothesis. I suppose this also goes along the lines of
people getting mad when they had to work for something, but someone else
didn't.

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tomjen3
There is a another point to that though: because the money has been taken from
those people they are essentially being forced to pay to lower their own
standard of living and to upgrade others to get closer to them. No wonder they
are pissed at this tripple whammy.

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_delirium
The money isn't really coming from _them_ , though. Only 50% of U.S.
households pay net taxes at all, so most of the lower-middle-class isn't
paying anything, not even enough to cover their _own_ use of government
services, let alone anyone else's. I believe the top 1/3 pay virtually all
taxes (>90%).

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aranazo
That's Federal Income tax they aren't paying, which is only one tax of many.

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rbranson
Welfare recipients still pay sales & use tax as well as property taxes (either
directly or indirectly via rent payments).

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drcube
Not to mention cigarette taxes and the lottery.

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100k
There is an entire book about this: Choosing the Right Pond: Human Behavior
and the Quest for Status.

[http://www.amazon.com/Choosing-Right-Pond-Behavior-
Status/dp...](http://www.amazon.com/Choosing-Right-Pond-Behavior-
Status/dp/0195049454/ref=sr_1_1?ie=UTF8&qid=1313657484&sr=8-1)

It's been a while since I read it, but it was quite interesting. The author
presents an economic model to explain status-seeking behavior and how it
affects, for example, wages. It presents a model why "super star" performers
don't get paid what they're worth (He models it as a subsidy to those below
them, who would leave for a different firm if they were at the bottom of the
hierarchy).

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mathattack
It does explain something of a paradox - why do poor middle Americans support
policies that harm them in the short term? Why does the guy who lost his job
when a PE firm bought his factory vote for a party that supports a very low
tax rate on the PE carried income? (This is ignoring whether it's right or
wrong in the broader sense) Why don't the poorer 51% unanimously vote tax
hikes on the wealthier 49%? I assumed it was because they still wanted to
support the party that appeared stronger on defense, or lined up with their
social values. This article uses behavioral economics to suggest a different
interpretation.

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yummyfajitas
However, this article fails to explain a similar paradox - why do rich blue
state Americans support policies that harm them in the short run?

I've always gone with "expressing tribal affiliation" as a good explanation.
Since your vote doesn't matter, why not try to raise your status by voting in
order to raise your status and signal tribal loyalties?

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jbooth
In my personal case, it's a belief that I benefit from a better national
infrastructure, a balanced budget, and a more stable society where we don't
have a ton of people on the verge of poverty.

I don't support taxes that are "redistributive" and don't think we really have
them.. to the extent that the rich pay higher taxes (which they barely do at
all on a % of income basis), they're getting more value from the system.

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ddw
Exactly, and I wish more people would understand this. You benefit from
society/government not only when you get a check from it in the mail, but when
you can profit from it indirectly.

Once people agree with this premise, everything changes. Unfortunately 30+
years of Reagan's "government is the enemy" agenda have pushed us back too
far.

