<<  <  >  >>

As wage earners

ers of portfolios within 45 demographic

Conclusion

groups, researchers could observe, for the

become owners of

first time, how stock ownership correlated

capital, they favor

with pro-capital tax preferences. The results

Broadly stated, our findings show that as

policies that

of the poll are shown in Table 13.

wage earners become owners of capital, they

Unsurprisingly, the Rasmussen data

favor policies that reduce taxes on savings,

reduce taxes on

show that 65.7 percent of investors favor a

investment, and capital gains. Americans are

savings, invest-

capital-gains tax cut compared with 45.9

entering capital markets by the millions each

percent of noninvestors and 53.8 percent of

year, largely through mutual funds offered by

ment, and capital

the general public. But the correlation of

providers of work-based defined contribution

gains.

portfolio ownership and procapital tax pol-

plans. Indeed, shareholding households will

icy is not restricted to traditional share-

soon constitute a majority of the electorate.

holding groups.

But beyond sheer numbers, American

Portfolio ownership is associated with

workers are accumulating a reservoir of

higher margins of support for a capital-gains

experience  encompassing  investment

tax cut among blacks and whites; among

strategies, portfolio diversification, and

retirees, private-sector workers, and govern-

market yields. Markedly, tens of millions of

ment employees; among men and women,

wage earners have learned how defined con-

both married and unmarried; and among

tribution plans can enhance their retire-

Democrats and Republicans, rich and poor.

ment security. Polls indicate that they are

Aggregate support is greatest at high

contrasting this experience with the peren-

income levels and among married couples,

nial crises of entitlements, particularly

whites, Republicans, and private-sector

Social Security--once the untouchable

workers. But within each of those groups,

"third rail" of American politics.

support increases sharply with portfolio

Because of Americans' increased experi-

ownership. The same effect is evident

ence with markets, policymakers must

among population segments that are less

rethink their traditional aversion to policy

enthusiastic about a capital-gains tax cut:

models that include personal capital accu-

blacks, females, Democrats, and unmarried

mulation. Tax-free savings for education,

adults.

health care, first-time home ownership, and

The single exception occurs among

small business start-ups are increasingly pop-

young women. Even here, portfolio owner-

ular among a rising population of worker

ship is associated with a 5-point increase in

capitalists. And politicians who resist mar-

support for a capital-gains tax reduction;

ket-based reform of Social Security--individ-

but the total percentage of young women

ually owned and managed personal savings

expressing an opinion increases 11 points.

accounts--may soon find themselves strad-

Among those stockholders, an additional 7

dling that "third rail" whose avoidance ration-

percent oppose the tax cut.

alized their inaction.

For now, it appears that worker-capital-

ist interests, diffused through every major

Notes

demographic group by the growth of

defined contribution plans, now influence

The author would like to thank Karlyn

opinion formation--just as they influence

Bowman, Charles F. Huber II, James Poterba,

worker productivity, long-term planning,

Andrew Samwick, Paul Thomas, and David

and retirement security. Worker-capitalist

Wray for their kind assistance not only in

effects operate broadly across and within a

acquiring data but in interpreting it. Ramesh

Ponnuru's extensive editorial assistance was

large range of demographic variables.

also greatly appreciated. Any and all remaining

Everywhere they tend to align worker inter-

errors are the exclusive province of the irrational

ests with those of capital.

exuberance of the author.

24