Taxes, Democrats and the Hyper-Wealthy

For the demographic reality is that, in America, the Democratic party is the new “party of the rich”. More and more Democrats represent areas with a high concentration of wealthy households. Using Internal Revenue Service data, the Heritage Foundation identified two categories of taxpayers - single filers with incomes of more than $100,000 and married filers with incomes of more than $200,000 - and combined them to discern where the wealthiest Americans live and who represents them.

Democrats now control the majority of the nation’s wealthiest congressional jurisdictions. More than half of the wealthiest households are concentrated in the 18 states where Democrats control both Senate seats.

I have speculated before that this seemingly counter-intuitive reality may reflect the hyper-wealth of modern America - these voters may be so rich they simply aren’t sensitive to tax increases anymore. Whatever the reason is, ideologically they are very similar to another group that has long been a core constituency for the Democratic party: the intellectual elite of the nation’s top universities, both professors and students. The fusion of these two groups into the same party has finally unseated the middle-class as the Democrat king-maker, a throne it had long been able to hold against the various elite interest groups it had competed against. They must now drudge through the trenches for their candidate in a way they have not had to do in the past.

It’s true. At some point of personal wealth, taxes don’t matter anymore.

If I had Warren Buffet’s wealth, I would not care about taxes at all. After a certain amount of wealth has been accumulated, income is no longer an issue and income is that part of your cash flow that is taxed.

Take Warren Buffett. He is a major advocate of higher taxes.

He has a fortune of over $60 billion. If just one billion of that were invested in municipal bonds he would have a tax free income of at least $40 million dollars … per year. Stick it on a plain vanilla money market account and $1 billion produces at least $30 million … per year. So raise the tax on that money fund income to 90% and poor old Warren Buffett would only have $3 million per year to spend. And – mind you – that ignores the other $59 billion dollars that Warren is not investing for income.

So Warren Buffett can be totally free of worries about an increase in income taxes affecting his lifestyle. No so people who are called the “middle class.”