BOSTON (Reuters) - The billionaires and others in the wealthiest strata of U.S. society traditionally vote Republican, but that’s changing this year, say advisers to the wealthy.
Despite plans to boost tax rates for the wealthiest 5 percent of Americans, Sen. Barack Obama is making the deepest inroads into wealthy voters in more than a decade for any Democratic presidential nominee, suggesting the November 4 election could mark a fundamental shift in voting patterns.
Running out of time to reshape a White House race that appears on the verge of tipping decisively toward Obama, Republican Sen. John McCain also faces a drop in support from a once-reliably Republican segment of society: the wealthy.
“McCain does not enjoy the kind of plurality in the wealthy space that Republican candidates have enjoyed in the past,” said Jim Taylor, vice chairman of the Harrison Group, a market research and strategy firm in Waterbury, Conn.
Taylor, who produces a quarterly “Survey of Affluence and Wealth in America,” said the wealthy were once a solid Republican majority. “It’s not anymore,” he told the Reuters Wealth Management Summit on Tuesday, citing the findings of his latest survey of 614 affluent individuals taken September 19-23.
That showed McCain had 40 percent of the “affluent and wealth vote,” compared with 33 percent for Obama, and given the recent stock market slide Taylor says he would be surprised if Obama’s support hadn’t risen further in the past few weeks.
In the 2000 and 2004 presidential elections, in contrast, about 80 percent of the wealthy supported the Republican nominee, Taylor said.
For the wealthiest American households, who have at least $1.6 million set aside each year for discretionary spending, McCain was favored over Obama by 49 percent to 28 percent.
“That may sound like a lot but but there was a time when it was 100 to zero percent,” Taylor said.
‘SENSITIVITY TOWARD PEOPLE’
Obama’s appeal to the wealthy is complicated by his plan to eliminate personal income tax cuts that benefit the rich: Americans earning more than $200,000 a year and married couples earning more than $250,000.
According to Taylor’s findings, the wealthy view McCain more favorably on foreign policy and even the economy, an area where Obama enjoys a perceived edge in recent national opinion polls during the current turmoil in financial markets.
“What Obama wins is an understanding of and sensitivity toward people,” he said. “And as a general rule, people have agreed at the wealthy end they can afford some more taxes.”
Richard Feurtado, head of wealth management at BlackRock Inc, the largest publicly traded U.S. asset management firm, said about 50 percent of his ultra-high net worth clients are Obama supporters. “People do things for all sorts of reasons, and maybe one of them is financial but there are many other reasons for the way people vote,” he said.
Some rich Americans expect taxes to rise regardless of who wins the White House race, and some expect it even if the foundering U.S. economy tips into recession.
“Everybody believes that taxes are going up ... no matter who gets elected,” said Timothy Vaill, chairman and chief executive of the wealth management arm of Boston Private Financial Holdings, a money-management firm.
Some wealthy foreign investors with big investments in the United States are unnerved by McCain’s running-mate, Alaska governor and self-described ‘hockey mom’ Sarah Palin, said Charles Lowenhaupt, chairman of St. Louis-based Lowenhaupt Global Advisors, which advises ultra-high-net-worth families.
“The non-U.S. wealth-holders I’ve talked to, in India for example, were feeling very negative on Obama. And all of sudden the Palin thing has flipped that because as naive as Obama looked they think Palin looks more so,” he said.
He said wealthy individuals in India are highly critical of Obama’s willingness to strike against terrorists in Pakistan without approval from Islamabad.
“They would say ‘oh, Obama is terrible.’ I just kept running into that when I was there. But when McCain chose Palin, they said ‘oh Palin.’ They just don’t understand the whole culture around her, the ‘hockey mom’ idea.”