The Blue-State Suicide Pact

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Joel Kotkin @ Forbes:

With their enthusiastic backing of President Obama and the Democratic Party on Election Day, the bluest parts of America may have embraced a program utterly at odds with their economic self-interest. The almost uniform support of blue states’ congressional representatives for the administration’s campaign for tax “fairness” represents a kind of  bizarre economic suicide pact.

Any move to raise taxes on the rich — defined as households making over $250,000 annually — strikes directly at the economies of these states, which depend heavily on the earnings of high-income professionals, entrepreneurs and technical workers. In fact, when you examine which states, and metropolitan areas, have the highest concentrations of such people, it turns out they are overwhelmingly located in the bluest states and regions.

Ironically the new taxes will have relatively little effect on the detested Romney uber-class, who derive most of their income from capital gains,   taxed at a much lower rate. They also have access to all manner of offshore dodges. Nor will it have much impact on Silicon Valley millionaires and billionaires, or the Hollywood moguls and urban land speculators who constitute the Democratic Party’s “good rich,” and enjoy many of the same privileges as their wealthy conservative counterparts.

The people whose wallets will be drained in the new war on “the rich” are high-earning, but hardly plutocratic professionals like engineers, doctors, lawyers, small business owners and the like. Once seen as the bastion of the middle class, and exemplars of upward mobility, these people are emerging as the modern day “kulaks,” the affluent peasants ruthlessly targeted by Stalin in the early 1930s.

The ironic geography of the Democratic drive can be seen most clearly by examining the  distribution of the classes now targeted by the coming purge. Thetop 10 states with the largest percentage of “rich” households under the Obama formula include true blue bastions Washington, D.C., which has the highest concentration of big earners, Connecticut, New Jersey, Maryland, Massachusetts, New York, California and Hawaii. The only historic “swing state” in the top six is Virginia, due largely to the presence of the affluent suburbs of the capital. These same states, according to the Tax Foundation, would benefit the most from an extension of the much-lambasted Bush tax cuts.

The pattern of distribution of “the rich” is even more marked when we focus on metropolitan areas. Big metro areas supported Obama, particularly their core cities, by margins as high as four to one. Besides New York, the metro areas with the highest percentage of high-earning households include such lockstep blue cities asSan Francisco, Washington, San JoseAtlanta and Los Angeles.

The income tax hit may not be the only pain inflicted on these areas in the President’s drive for greater “fairness.” Moves to curb mortgage interest deductions for affluent households also would fall predominately on these same areas. The states with the highest listing prices — and the biggest mortgages on average – are the president’s home state of Hawaii, followed by the District of Columbia, New York, California and Connecticut. According to the Census Bureau and the Federal Housing Agency, median home values inCalifornia are 200% higher than the national median, and in New York they’re 150% higher; in contrast, red Texas’ prices are below the median.

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Curt served in the Marine Corps for four years and has been a law enforcement officer in Los Angeles for the last 24 years.

5 Responses to “The Blue-State Suicide Pact”

  1. 1


    Is the true target the higher “middle class” earners and those who intend to reach that level?

    Are these people the ones targeted because they are more likely to vote in favor of conservative values, rather than the “uber-rich” or super high income earners who garner much of their “income” in investment gains? Or the poor who will always be pandered to while receiving nothing but scraps from the liberal/progressive’s all-powerful federal government?

  2. 3

    Nan G

    MSNBC is sometimes THE place where Lefty guests let it all hang out.
    Like Howard Dean on Wed…
    “The truth is, everybody needs to pay more taxes, not just the rich. That’s a good start, but we’re not gonna get out of this deficit problem unless we raise taxes across the board.”

    Remember folks, stealing EVERY penny from EVERY millionaire only funds the federal government for 3 months!
    And then that gravy train is over!
    But Obama’s just getting started spending and spending and spending!

  3. 4


    @Ditto: Oh you know that Moonbeam and his fellow deadheads are absolutely positive that they’ve got the right formula. Only problem is they don’t know what that formula is for.

  4. 5



    Yes and yes. The upper-middle-class always bears the brunt of any tax increases. Even if some means could be found to target only the super-rich, there just aren’t enough of them to matter. Of course, there aren’t enough upper-middle-class taxpayers either given the massive deficits we now have, so expect the bar to move lower and lower. Ultimately, the middle class will have to pay. 80% of the much-reviled Bush tax cuts went to people below the thresholds set by Obama. One way or another, this group will be hit.

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