Bone
Professor Westpoint
American Politics
Dec 2019

Wealth and Representation

Introduction

From the beginning of American democracy there has always been the question of how a system that represents the people can best be set up. Historically, there have been many strides to improve representation in politics, such as constitutional amendments allowing women and non-white people to vote. In spite of all of this, there is still reason to investigate just how well the American political system fulfills its promise to represent the people fairly and to its best ability. To do this, I will be looking at the wealth of Senators at different points throughout recent history in terms of wealth to give context to the problem, and looking at how the wealth of senators relates to their vote on the 2017 Tax Cuts and Jobs act. I choose to focus on the Senate because compiling information on the financial status of the members of the senate and conducting research through that is much more reasonable than doing the same to the House, given the sheer number of members. The focus on wealth is primarily because socio-economic factors are key when looking at/making predictions about who will vote or engage more heavily in politics in general. Those who make more money tend to be more involved, so it should be equally important to look at who has the money in Congress.

Senate Data and Modern Context

The Senate in 2013 was composed of members with a net worth of about 1.1 million dollars on average (Kopf, 2018). Meanwhile the average American at the same time had a net worth of 63 thousand (Bricker, 2017). This means the average American only had 5% as much wealth as the average senator which suggests that U.S. senators are (on the surface) completely detached from the American public’s economic experience, as they can’t relate to the problems of poor people. At the same time in 2013, only eight senators were freshman, so even if the senators got rich after being elected, they still can’t represent and relate to the people. The introduction argues that wealthier people tend to vote more, which would be relevant here if the question was whether constituents were being represented, but this is about the American people as a whole. It’s entirely likely that most senators have been in the senate for too long to be able to understand the current economy from a working or middle class perspective. In fact, there have been many studies to corroborate this. Seven separate studies using both naturalistic and experimental methods concluded that higher social class positively correlates with unethical behavior (Piff et al., 2012), this is evidence that the rich cannot best represent working class Americans even at a psychological level.

This huge wealth gap creates equally huge problems: Americans recognize this as well. Only 9% of Americans in November of 2013 approved of the way Congress was doing its job (Gallup, 2019). This number has been consistently low as well, only hitting a high of 84% in October of 2001, likely due to the 9/11 attacks. As we have seen, in 2013, senators were vastly more wealthy than the public which seems to indicate that they could not represent the American people accurately. The way that the American political system works also makes it so campaigning politicians must rely heavily on lobbying and political sponsors. The average winner in a Senate race spent $10.2 million in 2012 (Choma, 2015). During the course of the campaigning and lobbying process, politicians are generally encouraged and required to appeal to their donors, which are often unaligned with the interests of Americans. For example, a p harmaceutical company selling a necessary medicine (read: inelastic good) has an incentive to raise the price as high as possible, while consumers of that drug (American people) have an opposite incentive.

2017 Tax Cuts

The push for better representation of non-wealthy people in government needs to be undertaken soon, because it has a lot of real world implications. In 2017 the wealth inequality between citizens and senators was just as bad, and when looking at the senators who voted in favor of or against the Tax Cuts and Jobs Act (TCJA), a trend emerges. The TCJA has become known for slashing corporate taxes while reducing the amount of deductions the average (read: working class) filer can claim. About 30 million people are expected to owe money to the IRS in 2019 due to the new tax bill, while 60 very large companies reported paying $0 in taxes (IRS, 2019). While the tax plan prima facie appeared to reduce taxes across the board, the impact has been quite different, favoring those with vast wealth over those trying to make ends meet. The following data is taken from the initial vote. There were 51 Senators that voted for the TCJA (all Republicans), 39 were wealthier than the average American (based on net worth), 27 of the 39 had enough wealth to have 90% of it vanish and still have more than most Americans (Fontelo, 2018). On the other hand, out of those who voted against the TCJA, 39 of the 48 (47 Democrats and one independent) were wealthier than the average American, and 18 of those 39 had enough wealth to still be ahead of most people if 90% vanished (Fontelo). While on both sides, Democrat and Republican, senators are usually much better off than most people they represent in government; when it comes to the TCJA it seems that the people who voted for it were, on average at least, much wealthier.

Now, it would be unreasonable to try to divide this issue based purely on the lines of personal finance and economic standing. Obviously there are other motivators here, considering that the most wealthy senator, Mark Warner from Virginia, voted against it, and there is a clear presence of wealthy senators on both sides of the aisle. At the same time, it wouldn’t make sense to completely ignore the factor of personal economics. Even with the large number of politicians with wealth that surpasses that of most Americans, it seems Republicans generally get farther ahead than their constituents economically when they do get ahead (at least when it comes to Senators).

DEBATE OVER A MORE PROGRESSIVE TAX

Recently there has been debate about whether taxes should be increased on the wealthy to provide for more social programs, especially Medicare for All, specifically a wealth tax, which is a levy on personal assets with liabilities deducted, also called a capital tax or net wealth tax. This tax has been both proposed and ridiculed by members of the Democratic party. The plan is attributed mostly to Elizabeth Warren and Bernie Sanders (Breuninger, 2019), and some of the heaviest criticism within the Democratic party coming from Andrew Yang. Yang is also estimated to have a net worth of about $1 million dollars. This puts him firmly in the range of being more wealthy than most Americans. Leaving the analysis at this, however, would be dishonest. In this case it is not Yang’s wealth that necessarily causes him to oppose the tax, because both Sanders and Warren have more wealth than Yang. Sanders has a net worth of $2 million while Warren and her husband have an estimated net worth of $4.7 million (Fontelo). Again, we see a trend being subverted. Yang taking the position of most other people in the Democratic Party is not surprising because it’s the party that he’s running for, of course. Sanders and Warren taking the contrary position is more surprising, having more wealth than Yang. This implies, which tracks with the previous research in this paper, that ideology and partisanship can override the effects that personal wealth have on policy making decisions.

The wealth tax proposed by Bernie Sanders is as follows, “It would start with a 1 percent tax on net worth above $32 million for a married couple. That means a married couple with $32.5 million would pay a wealth tax of just $5,000. The tax rate would increase to 2 percent on net worth from $50 to $250 million, 3 percent from $250 to $500 million, 4 percent from $500 million to $1 billion, 5 percent from $1 to $2.5 billion, 6 percent from $2.5 to $5 billion, 7 percent from $5 to $10 billion, and 8 percent on wealth over $10 billion. These brackets are halved for singles” (Sanders, 2019).This plan is estimated to raise about $4.35 trillion over the course of 10 years (Zucman, Saez, 2019). The plan would reduce the wealth of billionaires by half, while there are no billionaires in congress, the tax plan would still apply to 17 members of Congress. Six members fall into the lowest bracket, paying a 1% tax. 10 members of Congress fall into the second bracket, paying 2%, and one member lands in the third bracket, paying 3%. This would not have a huge effect on the wealth in Congress but if combined with other tax plans, such as the plan to reduce income inequality through corporate taxes, and used to alleviate poverty, the effect would be much more significant. The plan to eliminate medical debt is also conducive to this goal, as 11.2 million people have been pushed into poverty due to medical expenses (Renwick and Fox, 2016). This is just to say that the effort to alleviate poverty would be effective, as the cause for poverty will be taken out of the equation for many people.

Any attempt to directly limit how rich somebody can be to join Congress would most likely not be supported, even if a limit to the wealth one can have relative to the average American would be effective and make sense. This limit would be very binding, and those with more wealth have more time to campaign and more money to finance themselves, which is part of why they are overrepresented. There is currently no limit on corporations giving money to political campaigns, as it’s defined as free and protected speech since Citizens United v. FEC. Rather than try to overwrite this ruling, steps should be taken to circumvent having to deal with it at all. This is what leads me to the conclusion that the best way to fix this problem is not directly, but indirectly through shrinking the wealth gap and reducing poverty. Alleviating poverty through eliminating medical debt is an excellent method of pursuing that goal, given the huge number of people that would be taken out of poverty. As a concession: it’s not reasonable that all of the people lifted from poverty will run for Congress or have the ability, but more will be able to. Additionally the people with vast amounts of wealth will be brought closer to the median, meaning the previously mentioned psychological effects of having more wealth will be diminished over time.

DISCUSSION AND ELABORATION

From the data collected and laid out in this paper it is clear that of the factors which influence politicians and lawmakers, personal wealth is extremely important to examine. There is a fair amount of research confirming that government policy is generally more responsive to the wealthy than the middle class or the poor (Gilens 2012; Gilens and Page 2014) . This is not the only factor to look at though. As seen from the first case study, partisanship is a big part of how a senator votes, which is not as admirable a reason as serving the constituents, but somewhat better than mere money interests. The pull of affluence on policy-making is shaped by partisanship, but even so, the fact that the needs of the affluent are listened to more than the needs of the poor creates a feedback loop of class divide. This loop has been explained before, called the “economic elite domination model” (Gilens and Page), wherein economic inequality leads to political inequality, since low income people are kept out of power, and political inequality only leads to more economic inequality. This is not a be-all end-all, though. As discussed earlier in this same section, partisanship can override wealth when it comes to lawmakers taking sides and making political decisions. This means that while it may be too difficult a task to push for more low-income people in congress to get better representation, it is possible to work toward getting more low-income people to become active within a political party and influence the party line, therefore changing what appeals to a given politician’s partisan sympathies.

Conclusion

This paper has examined factors which influence policy decisions. In general personal wealth and finances play a noticeable part in decision making, but when it comes to making a tough decision that sparks conflict, lawmakers will rally around their party. While it’s generally good that lawmakers align themselves with party first before money, the votes that are taken which don’t spark conflict and don’t force senators to fight along party-lines end up being influenced much more by the average net-worth of the congressional chamber rather than the averaged beliefs or averaged constituencies. Because Congress is a club for the affluent, Americans are not always the primary group being catered to. This is why the wealth concentration in politics is a problem. To be properly represented by lawmakers, there needs to be more representation of low-income people, because when there is exclusion of a group from locations there is less information about them being discussed and brought up, which is especially dangerous when the group is congress members who influence the entire country. A study out of Mills College reveals that reducing transphobia by increasing knowledge about transgender people is a reliable way of increasing support for the rights of trans people (Flores, 2018). This is important to this research because it shows that psychologically the more present a group is in the discourse, the better that group is accommodated. There needs to be work done to make sure people of different economic status are represented and empowered, especially since the group currently underrepresented in politics makes up most of the country.

Works Cited

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