Not so deluded after all?

It’s a figure that just won’t go away: 19% of Americans believe they are among the top 1% of income earners; another 20% expect to be there someday. Since David Brooks first deployed this factoid in a November, 2002, article in the Atlantic Monthly, I have heard people refer to the figure on blogs, at academic talks, on radio shows, and in casual conversation. Not only does it speak to a basic American (or human) predilection for self-aggrandizement, the figure also suggests a simple reason why Americans are so resistant to income redistribution: if everyone thinks he’s rich, no one will respond to calls to soak the rich.

The problem with the figure is that it’s completely wrong. More precisely, the numbers are right, but the interpretation is way off. Here is what David Brooks’s wrote in his piece, “Superiority Complex”:

In America . . ., we can all be celebrities in some little sphere, and we are very impressed with ourselves. During the most recent presidential election a Time magazine-CNN poll asked voters whether they were in the top one percent of income earners. Nineteen percent reported that they were, and another 20 percent said that they expected to be there one day.

But the poll didn’t actually ask people whether they were in the top one percent of income earners. Here’s the actual survey question:

As you may know, Al Gore has claimed that George W. Bush’s proposed tax cut will largely benefit those with high incomes, who he claims are the top 1%. Thinking about your own situation, do you think that you are in the top group that would benefit from Bush’s proposed tax cut now, do you think you will be in this group that will benefit in the future, or do you think you will not benefit from Bush’s tax cut?

19% Will benefit right away
20 Will benefit in the future
55 Will not benefit
6 Not sure

(Survey by Time, Cable News Network. Methodology: Conducted by Yankelovich Partners, October 25-October 26, 2000 and based on telephone interviews with a national adult sample of 2,060.)

The question is simply an awful way to figure out how people assess their incomes relative to other Americans. It is more closely addressing two highly politicized questions about Bush’s tax plan. First, would Bush’s plan lower taxes only for the top 1% of income earners? As the question makes clear, this was Gore’s claim, denied by Bush. The question therefore asks, “Which candidate do you trust?” Second, does a tax on high income earners have indirect benefits for people of lower incomes? Republicans have tended to argue that high marginal tax rates discourage hiring and innovation, ultimately harming the entire economy, while Democrats have been suspicious of what they call “trickle-down economics.” On this point, the question posed is, “Which party’s economic philosophy do you support?”

Now, if you asked these underlying questions directly, restricted your attention to the subset of respondents who thought that the plan would directly affect only the top 1% and have no indirect benefits for others, and looked at the responses given by this subset to the question actually posed, you could learn something about this group’s assessment of its position in the income distribution. But of course this group would not be representative, since the underlying questions are politically charged and we all know that political beliefs correlate with economic position. So my conclusion is that we can’t learn anything from this survey question about how people assess their current and future income relative to that of their peers.

In fact, Americans don’t seem to delude themselves up the economic ladder at all. The figure shows how 2,800 Americans responded to a question in the 1998 General Social Survey asking, “Compared with American families in general, would you say your family income is far below average, below average, average, above average, or far above average?” Almost half of respondents said their family’s income was average. The remaining respondents were more likely to put themselves below average than above average. Fewer than 3% said they were “far above average.” This pretty much how sober realists would sort themselves. This suggests to me that almost all of the 19% of people who said that they would benefit from Bush’s tax cut chose that response because they disagreed with Gore’s claim, not because they put themselves in the privileged 1%. (GSS respondents were economically representative of American families. The median respondent put his family’s income in the $35,000 to $39,000 bracket; based on US Census Bureau figures, the median income of all households in 1998 was $38,885.)

Let’s do away with this pesky “fact.” Not only because it’s fiction, but also because it misrepresents the economic experience of Americans and obscures the political context for redistribution in this country.