Interests And Income

by: Marc Chandler

This great graphic was posted on Mother Jones by Kevin Drum, who saw it on the Tax Policy Center blog. It shows how the sources of income vary by quintile in the US.

One does not need to be a strict economic determinist to see the connection between one's sources of income and one's political interests. Most of those that see transfer payments as too high, for example, are likely not receiving them.

Although the claim of class warfare is pinned to the left, the elites are, arguably, even more class conscious. Aspirations to advance to higher quintiles may also impact how one perceives distributional and other issues.

The study accepts the general orthodoxy about transfer payments. Consider that the gains on the return to capital (profits, interest, dividends) are taxed at a lower rate than the returns to labor (wages and benefits). This, and tax breaks for businesses, should arguably count as transfer payments as well. Tariffs on imports are also transfer payments. The way transfer payments are understood in the study is itself very much pregnant with ideological assumptions.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.