Billionaires and Stealth Politics
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the estate tax on the largest estates.64
Additional clues come from a regression analysis predicting the ideo-
logical direction of political action (on either or both taxes and Social Security) that is reported in table 2.6.65 This prediction interacts all the independent variables from earlier models with a variable that measures
whether or not billionaires made at least one relevant public statement.
This set of interactions allows us to look for further evidence of stealth politics; it tests whether patterns of political action are different among those who talk than among those who do not.
In interpreting this interaction, it is important not to think of speech as causally prior to action; rather, the interactions allow us to split between silent and vocal billionaires to see which kinds of spending strategies go with each approach to political speech. Once again, the level of wealth proves to be important: among those who did not speak, higher wealth led to more conservative overall patterns of political action related to taxes or Social Security. That is, among those who did not engage in political discourse, the wealthiest were more likely to engage in conservative- leaning political action, just as the stealth politics idea would suggest. By contrast, among those who did speak publicly, there is no significant relationship in the data between wealth and the ideological direction of political action. (As one would expect— since these actions are not very public— neither being an
heir nor being exposed to consumers made an appreciable difference.)
table 2.6 Regression Predicting Directionality of Nonstatement Actions on Taxes and Social Security
B (SE)
t- Value
Pr(>|t|)
(Intercept)
0.1814 (0.2474)
0.73
0.4652
Makes at Least One Relevant Statement
– 0.4500 (0.4108)
– 1.10
0.2762
Consumer Facing
0.0556 (0.2673)
0.21
0.8356
Heir
0.1567 (0.2591)
0.60
0.5468
Wealth
– 0.0499 (0.0139)****
– 3.58
0.0006
At Least One Statement × Consumer Facing
0.4579 (0.4794)
0.96
0.3420
At Least One Statement × Heir
– 0.0083 (0.8109)
– 0.01
0.9919
At Least One Statement × Wealth
0.0355 (0.0188)*
1.90
0.0612
* p < .1.
**** p < .001.
Note: Directionality is coded – 5 to +5 to reflect the number of types of taxes each billionaire favors increasing (+) or decreasing (– ). Residual standard error: 1.036 on 92 DF; multiple R- squared: 0.1496; adjusted R- squared: 0.08494; F- statistic: 2.313 on 7 and 92 DF; p- value: .03223.
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table 2.7. Regression Predicting Bundling or Hosting at Least One Fund- Raiser B (SE)
t- Value
Pr(>|t|)
(Intercept)
0.3923 (0.0979)
4.01
0.0001
Makes at Least One Relevant Statement
0.3539 (0.1626)**
2.18
0.0321
Consumer Facing
– 0.1405 (0.1058)
– 1.33
0.1874
Heir
– 0.2819 (0.1026)***
– 2.75
0.0072
Wealth
0.0048 (0.0055)
0.86
0.3905
At Least One Statement × Consumer Facing
– 0.3667 (0.1898)*
– 1.93
0.0564
At Least One Statement × Heir
0.2710 (0.3210)
0.84
0.4007
At Least One Statement × Wealth
– 0.0028 (0.0074)
– 0.38
0.7041
* p < .1.
** p < .05.
*** p < .01.
Note: The dependent variable is dichotomously coded based on whether a billionaire bundled campaign funds or hosted one or more political fundraiser. Residual standard error: 0.4101 on 92 DF; multiple R- squared: 0.3001; adjusted R- squared: 0.2469; F- statistic: 5.636 on 7 and 92 DF; p- value: 1.97e– 05.
Less clarity emerges regarding bundling and fund- raising, as indicated
by the regression reported in table 2.7. Wealth level had no significant effect, perhaps because the ideological directionality of this activity is not easy to measure— and hence the left- and right- leaning dynamics separated out in earlier analyses are here mixed together. However, being an heir or exposed to consumers did tend to dampen fund- raising activity— perhaps
because fund- raising is a more public activity than belonging to an organizational board or giving money, and therefore more subject to public objections and pressures. This is consistent with the positive association we found between fund- raising/bundling and making a public statement.
Several major funders of American political campaigns appear to fit
the stealth politics pattern: at least they have tried to be stealthy, though a few have been outed by investigative reporters. For example, the Center for Responsive Politics (CRP) and the Washington Post uncovered massive political spending (much of it not subject to reporting requirements) by Charles and David Koch— who reportedly intended to spend
about $900 million on Republican candidates during the 2016 election
campaigns, before the nomination of Donald Trump led them to scale
back spending and direct most of it to nonpresidential candidates. CRP
and the Post also discovered heavy spending by Sheldon Adelson—
who is estimated to have spent more than $100 million during the 2012
election cycle.66 But we have found that— over a ten- year period during which they were intensely active behind the scenes— the Kochs and Adelson generally made few policy- related comments in public, and most of
stealth politics on taxes and social security
47
those were quite vague. On taxation and Social Security, Charles Koch
had nothing whatsoever to say. David Koch made only one statement, as
did Adelson.
The Koch brothers, who have extensive oil and gas interests and who
devote major resources to advancing specific, generally very conserva-
tive economic policies with respect to environmental and other govern-
ment regulations, typically say little or nothing in public except to advocate “economic freedom” in very generalized terms. Adelson sometimes
makes emotionally charged but substantively vague rhetorical statements,
like this attack on the Obama administration (from a Forbes interview):
“What scares me is the continuation of the socialist- style economy we’ve been experiencing for almost four years. That scares me because the redistribution of wealth is the path to more socialism, and to more of the
government controlling people’s lives. What scares me is the lack of ac-
countability that people would prefer to experience, just let the govern-
ment take care of everything and I’ll go fish or I won’t work, etc.”67
While this quote clearly leans in a conservative ideological direction,
it seems hopeless to infer specific stances on taxation, Social Security, or any other specific policy domain from these general considerations about
redistribution, socialism, and accountability. As best we can tell, neither Charles or David Koch nor Sheldon Adelson has ever laid out for public
scrutiny an account of specific policy positions he favors or reasoned arguments to support them, except during David Koch’s long- forgotten 1980
run as the Libertarian Party candidate for vice president of the United
States. Koch’s disappointing showing in that race— winning just 1 percent of the vote nationwide, after campaigning on a platform that advocated
hard- line libertarian positions (abolish Medicare, Medicaid, and Social
Sec urity; end all individual and corporate income taxes; abolish the Security and Exchange Commission, the Environmental Protection Agency,
and even the FBI and CIA)— may have helped convince the Koch broth-
ers that stealth politics would be more effective.68
It is interesting to contrast a typical, specific policy statement made
by Warren Buffett, who has taken a number of stands that could be char-
acterized as moderately liberal or center- left and are probably closer to the views of average Americans: “I would leave rates for 99.7 percent
of taxpayers unchanged and continue the [then] current two- percentage-
point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.”69
Similarly, Bill Gates— architect and champion of the Giving Pledge, by
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which billionaires promise to donate at least half their wealth to philanthropic causes— has made a number of fairly specific policy statements
like the following: “A bigger estate tax is a good way to collect money
when the government is going to have to raise more taxes. . . . Very rich estates that have benefitted from the rules and stability of this country, if you had a choice to be born here or be born somewhere else knowing
that you had to pay an estate tax you would still pick the benefits that our system provides. Warren [Buffett] and I are great examples of what the
system can do for us.”70 Again, Michael Bloomberg, a moderate Republi-
can, has frequently taken specific positions like this one: “In addition, demand for revenue will necessitate bringing back the estate tax— because
it makes too much sense. It will both raise revenue and encourage more
wealthy Americans to donate to charity. Government should incentivize
the maxim I plan to follow: The ultimate in financial planning is to bounce the check to the undertaker.”71
Our data indicate, however, that the centrist positions— and the fre-
quent, open making of specific policy statements— by Gates, Buffett, and
Bloomberg are quite atypical of the one hundred wealthiest US billion-
aires. The Koch brothers and Sheldon Adelson, while unusual in the enor-
mous magnitude of their political spending, are much more typical than
Gates, Buffett, or Bloomberg in not speaking out about public policy but
quietly engaging in extensive political activity, most of which supports
conservative causes and candidates.
A citizen who judged the policy stands of US billionaires as a group by
their media- reported public statements could be badly misled. On the es-
tate tax, for example, the billionaires’ few public statements tended to support increasing the tax (five statements to three), but their policy- focused financial contributions and other actions strongly opposed the estate tax (twelve to zero).
Taxes, Social Security, and Stealthy Billionaires
Since we cannot see into the hearts or minds of US billionaires, we cannot be sure exactly how many deliberately pursue the strategy we are calling “stealth politics”— attempting to influence public policy in directions not favored by average Americans while avoiding public statements about
policy. But the patterns in our data indicate that many of them do behave in that way.
stealth politics on taxes and social security
49
Our intensive web searches revealed surprisingly few specific statements
by the one hundred wealthiest US billionaires concerning Social Secu-
rity or taxation policies. These are important issues, concerning which
nearly all Americans— presumably including billionaires— have definite
opinions. Our searches covered a period of more than ten years, so the
billionaires had abundant time to speak out if they wished to do so. We
believe that they also had plenty of opportunity to speak: many print and electronic journalists are eager to report whatever billionaires have to say.
But most of the billionaires chose silence.
Only a small handful of the wealthiest billionaires— particularly Mi-
chael Bloomberg, Warren Buffett, Bill Gates, and George Soros— made
a notable number of specific policy statements concerning one or more
issues related to taxation or Social Security. Most (71 percent) of the
one hundred wealthiest billionaires said nothing whatsoever in public
about any aspect of these issues. Nothing about income taxes, the estate tax, business taxes, a carbon tax, capital gains taxes, payroll taxes, Social Security privatization, the retirement age, Social Security benefit reductions, or anything else.
Yet a large majority of the billionaires engaged in political activity, some of them quite extensively. Nearly all (92 percent) made a reportable federal or state political contribution of some kind between the beginning of 2001 and the end of 2012. A remarkably high portion (36 percent)
bundled contributions from others and/or hosted political fund- raisers.
Quite a few engaged in actions directly related to the issues of taxes or Social Security, including contributing money to groups dedicated to specific policy aims concerning taxes or Social Security. Where we can measure
ideological orientation, most of these actions (in contrast to the billionaires’ limited public rhetoric) were aimed in a conservative direction—
overwhelmingly, for example, toward repealing the estate tax, reducing
capital gains and personal and corporate income taxes, and opposing car-
bon taxes.
There was a systematic tendency for the wealthiest billionaires to speak out more often— and in a more centrist or even liberal direction— than
the least wealthy. This pattern is consistent with (though it cannot prove) the proposition that many of the less wealthy billionaires avoid speaking out precisely because they favor policies that would be unpopular or
controversial with average Americans, including their business custom-
ers. (We found some indications that those billionaires whose businesses
are most directly exposed to consumers— along with inheritors of wealth,
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who may be self- conscious about their fortunes— tend to speak out some-
what less than others.)
As we have noted, our data very likely underestimate the extent of stealth politics by billionaires. We were able to trace dark money only in cases where investigative journalists or others had uncovered and publicized it. But— enabled by the tax code and probably encouraged by Su-
preme Court decisions72— dark (unreported) money represents an in-
creasingly big factor in US electoral politics.73 Nor do our data permit us to tell whether many billionaires use stealthy tactics in the lobbying and legislative realms, like the tactic that Darrell West has dubbed “get a senator”: persuading a single senator to prevent repeal of a special benefit (a tax exemption, for example) by threatening to filibuster any effort to do so.74 The essence of stealth politics is to try to engage in secret action. The nature of our data permits us to identify only semisecret actions: actions that are obscure or unknown to most ordinary citizens but have leaked
into the public record.75
Billionaires’ Impact on Public Policy
Given their abundant resources and their high levels of political activity, it appears l
ikely that the wealthiest US billionaires, as a group, exert significant influence on the shape of US public policy. If so, one might well be concerned about whether their influence violates norms of democratic
political equality. The fundamental principle of “one person, one vote”
would be seriously undermined if actual US politics began to resemble a
system of “one dollar, one vote.” Billionaires and other wealthy Ameri-
cans have been spending a lot of dollars on politics.
How much success do billionaires actually have in their efforts to in-
fluence public policy? Do they win more often in some policy areas than
others? For example, are billionaires and multimillionaires especially successful at shaping policy concerning core economic interests that they
nearly all share, such as keeping their own taxes as low as possible? And (relatedly) do they succeed at restricting government spending on big
programs like Social Security, which require a lot of tax revenue? It does seem likely that the overall policy impact of billionaires is greatest when there is a high level of consensus among them so that nearly all billionaires are working together for the same sorts of policies.
Unfortunately, however, it is impossible— at least at present— to come
up with precise answers to these questions. There is no way to obtain
stealth politics on taxes and social security
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reliable, comprehensive data on what sorts of policies each billionaire favors or opposes. A systematic survey of billionaires is not feasible. So we cannot be sure how much consensus or disagreement there is among them
on any particular issue.
Nor can we conduct a systematic quantitative study of billionaires’ in-
fluence along the lines of the studies that have revealed substantial influence on policy by a much broader group of “affluent” Americans (the top
20 percent or so of income earners). Martin Gilens’s data on the survey-
measured policy preferences of average Americans and (separately) af-
fluent Americans over a broad range of 1,779 proposed policy changes,
together with his measures of interest group alignments on those issues,
can be used to analyze whose preferences tend to have how much effect
on actual policy decisions.76 No comparable data exist for billionaires.
But of course multimillionaires and billionaires are included among Gilens’s affluent citizens.77 Indeed, it is quite possible that a large part of the influence that affluent Americans as a group exert is actually wielded by a few of the wealthiest people among them. If more money tends to