Pocketbook Voting

There’s been lots of talk about how various groups voted in the presidential election last week. One breakdown not focused on to any significant degree, at least from what I’ve been reading in the newspapers, has been the vote by income level. Yet, the exit poll numbers tell a fascinating story.

Income Bush Kerry

Under $15,000 37% 63%

$15,000-$29,999 41% 57%

$30,000-$49,999 49% 50%

$50,000-$74,999 56% 43%

$75,000-$99,999 54% 45%

$100,000-$149,999 57% 42%

$150,000-$199,999 58% 42%

$200,000+ 63% 36%

Source: The Associated Press via Newsday, November 4, 2004.

These results are quite striking. For those earning less than $30,000, Senator Kerry (D) beat President George W. Bush (R) soundly. Those earning between $30,000 and $50,000 split evenly. And in every income category above $50,000, the President beat Senator Kerry by hefty margins.This would seem to confirm that people vote with their pocketbooks, or verify the old political saying that the more one earns, the more Republican one becomes. If one assumes that some lower income earners have bought into the mistaken notion that bigger government and wealth redistribution will improve their lot in life, then one would expect a big vote in those groups for Kerry. On the other hand, if one expects to see growth in favoring lower taxes (or fearing higher taxes) as one climbs the income ladder, then the large votes for Bush also are not surprising.In the end, though, there is an economic truth beyond these poll numbers and perceptions. That reality is that higher taxes – even if imposed only on upper-income earners – hurt the entire economy. After all, not only are those upper-income earners the people most able to invest and take risks so that the economy may grow, but all individuals – no matter their income levels — spend or invest their own earnings far more ably than any politicians or government bureaucrats.

Raymond J. Keating

Chief Economist

Small Business & Entrepreneurship Council

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