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  • Norman Young

Democrats Could Lose Their Billionaires

The largest corporations in America donate more to Democrats than Republicans. This holds doubly true of the most vocal billionaires—guys like Warren Buffett, Bill Gates, Jeff Bezos, and Mark Zuckerberg—who send an overwhelming proportion of their political donations to the Democratic side of the aisle. Democratic politicians typically favor progressive tax structures which force the rich to pay more, and also put regulations on their businesses. So, why do billionaires give the Democratic Party such strong support?

A typical explanation of this phenomenon, on the Right, goes like this: onerous regulation and heavy taxes are a heavier burden on small businesses and startups than on large, established corporations, therefore, the rich see the additional tax and regulatory burden as a premium for keeping competitors down and ensuring that they remain at the top of the corporate ladder. This explanation is both too cynical and too simple.

The real reason that the richest Americans support Democrat politicians is because they are human. Humans tend to care about the opinions of those who run in their same social circles—and, in the elite social circles frequented by the rich, the prevailing opinions are overwhelmingly liberal. In this milieu, donations to Democrat politicians solicit applause; donations to Republican politicians raise eyebrows; and donations to causes like California’s “proposition 8” risk total ostracism.

In other words, the rich care about social capital almost as much as they care about financial capital. And, as wise investors, they tend to quickly figure out how to get the most bang for their buck. Why waste money creating a new wing for a Catholic hospital when the same amount of social capital can be generated by