November 6, 2007
By Michael Franc
A legislative proposal that was once on the fast track is
suddenly dead. The Senate will not consider a plan to extract
billions in extra taxes from megamillionaire hedge fund
The decision by Senate majority leader Harry Reid, the Nevada
Democrat, surprised many Washington insiders, who saw the plan as
appealing to the spirit of class warfare that infuses the
Democratic party. Liberal disappointment in Mr Reid was palpable at
media outlets such as USA Today, where an editorial chastised: "The
Democrats, who control Congress and claim to represent the middle
and lower classes, ought to be embarrassed."
Far from embarrassing, this episode may reflect a dawning
Democratic awareness of whom they really represent. 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.
This new political demography holds true in the House of
Representatives, where the leadership of each party hails from
different worlds. Nancy Pelosi, Democratic leader of the House of
Representatives, represents one of America's wealthiest regions.
Her San Francisco district has more than 43,700 high-end
households. Fewer than 7,000 households in the western Ohio
district of House Republican leader John Boehner enjoy this level
The next rung of House leadership shows the same pattern.
Democratic majority leader Steny Hoyer's district is home to the
booming suburban communities between Washington, DC, and Annapolis.
It boasts almost 19,000 wealthy households and a median income
topping $62,000. Mr Hoyer's counterpart, minority whip Roy Blunt,
hails from a rural Missouri district that has only 5,200 wealthy
households and whose median income is only $33,000.
Income disparity - to use the class warrior's favourite term -
is greatest among the districts of lawmakers that lead each party's
campaign arm. Maryland senator Chris Van Hollen chairs the
Democratic congressional campaign committee. With more than 36,000
prosperous households and a median income of nearly $70,000, his
suburban Washington district even out-sparkles Ms Pelosi's. In
contrast, fewer than 5,000 such wealthy households are found in the
largely rural district of his Republican counterpart, Tom Cole from
Oklahoma. The median income there is only $35,500.
Democratic politicians prosper in areas of concentrated wealth
even in staunchly Republican states such as Georgia, Kansas and
Utah. Liberal congressman John Lewis represents more than 27,500
high-income households in his Atlanta district. The trend achieves
perfect symmetry in Iowa. There, the three wealthiest districts
send Democrats to Washington; the two poorest are safe Republican
Soon this new political demographic may give traditional
purveyors of class warfare the yips. To comply with new budget
rules, liberal Democrats on Capitol Hill are readying a tax
increase of at least $1,000bn over the next decade. Ms Pelosi says
she wants to extract all of this from "the wealthy". When has a
party ever championed a policy that would inflict so much pain on
its own constituency? At what point will affluent Democrats crack
and mount a Blue State tax rebellion?
Will we see the emergence of a real-life Howard Beale, the
television anchorman played by Peter Finch in the movie
Network ? Beale was disgusted with America's deteriorating
1970s economy and culture. One night he snapped and implored
viewers to get out of their chairs. "Go to the window, open it, and
stick your head out and yell: 'I'm mad as hell and I'm not going to
take this any more!' "
Or will Democratic voters follow a different cinematic lead,
that of the fraternity pledge in Animal House? Perhaps they
will accept these tax rises as a political and economic hazing and
greet each new tax hike with: "Thank you, sir. May I have
Michael Franc is
vice president of government relations for The Heritage Foundation
First appeared in the Financial Times
A legislative proposal that was once on the fast track is suddenly dead. The Senate will not consider a plan to extract billions in extra taxes from megamillionaire hedge fund managers.
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