Companion 8.1b

Wages, capital and the ZIP code vote

From 2016 to 2020, ZIP codes in the highest decile of capital-gains returns swung 5.4 points toward the Democrats and those in the highest decile of earned income tax credit returns 5.2 points toward the Republicans, links that depend on the controls.

A companion to Chapter 8.1, Five axes of the county vote

Author: Vishal Singh
Affiliation: NYU Stern
Published: 30 September 2026

DraftFigures and numbers may change as the analysis is rebuilt.what is still being checked

The ACS release behind the ZIP-code controls (poverty, college, Black and Hispanic shares) is not recorded in the demographic source file. The ZIP-code controls are to be rebuilt from a dated 5-year ACS release; the county results use dated controls and give the same conclusions for the EITC share. The ZIP-code college variable has no resolved definition (some college or more, or degrees), so every ZIP-code result that holds it fixed is conditional on that coding.

Between the 2016 and 2020 presidential elections, ZIP codes in the contiguous states where more tax returns reported a capital gain swung further toward the Democrats. Two ZIP codes one standard deviation apart on that share differed in swing by +2.4 points of margin. Among ZIP codes with similar college shares, the same difference went with a swing of −1.0 points, and the sign reverses. The swing is the change in a place's two-party margin, Democratic minus Republican, so a positive swing is toward the Democrats. The two sides of each comparison count different populations in two approximations of the same place. The capital-gains share counts tax returns tabulated by postal ZIP code, while the votes and the college share describe residents of the census area that approximates it.

Swing rose with capital gains and fell with EITC claims

Figure 1 ranks ZIP codes by each of two shares, splits them into ten groups of equal size, called deciles, and follows the mean swing across the groups. One share is the capital-gains share. The other is the share of returns that claim the earned income tax credit (EITC), a federal credit for households with low earnings from work. The capital-gains line climbs from 7.2 points toward the Republicans in the lowest decile to 5.4 points toward the Democrats in the highest. The EITC line falls from 6.3 points toward the Democrats in the lowest decile to 5.2 points toward the Republicans in the highest. Most deciles of both shares swung toward the Democrats, as the mean of all ZIP codes did, so the ordering is one of how far each decile moved. Across ZIP codes a place with many EITC claims has few capital-gains returns and the reverse.

The lowest capital-gains decile and the highest EITC decile are poor ZIP codes with large Black and Hispanic populations, and they are the end deciles that swung toward the Republicans. The other two ends are college-heavy (Table 3).

Figure 1

The swing rose with the capital-gains share and fell with the EITC share

Vote-weighted mean change in the two-party margin, 2016 to 2020, by decile of ZIP codes ranked by share of returns; 95% intervals clustered on county; positive is toward the Democrats

Change in Democratic minus Republican margin (points)

Show data

Data for The swing rose with the capital-gains share and fell with the EITC share
Share ranked	Decile	Lowest share in decile (%)	Highest share in decile (%)	Mean swing (points)	Lower bound, county clusters	Upper bound, county clusters	Lower bound, state clusters	Upper bound, state clusters	ZIP codes
Capital-gains share	1	0.0	5.5	−7.2	−8.8	−5.6	−9.9	−4.5	2,715
Capital-gains share	2	5.5	8.9	−1.9	−3.5	−0.4	−4.2	+0.3	2,714
Capital-gains share	3	8.9	11.3	+0.9	−0.1	+1.8	−0.8	+2.6	2,714
Capital-gains share	4	11.3	13.5	+1.9	+1.2	+2.7	+0.7	+3.1	2,715
Capital-gains share	5	13.5	15.7	+3.2	+2.5	+4.0	+1.8	+4.7	2,714
Capital-gains share	6	15.7	18.1	+3.9	+3.1	+4.6	+2.4	+5.3	2,714
Capital-gains share	7	18.1	20.9	+4.5	+3.9	+5.2	+3.4	+5.6	2,715
Capital-gains share	8	20.9	24.7	+5.4	+4.8	+6.0	+4.3	+6.5	2,714
Capital-gains share	9	24.7	31.0	+6.1	+5.4	+6.8	+4.6	+7.6	2,714
Capital-gains share	10	31.0	77.1	+5.4	+4.4	+6.4	+3.4	+7.4	2,715
EITC share	1	0.0	5.1	+6.3	+5.5	+7.2	+4.7	+8.0	2,715
EITC share	2	5.1	7.7	+6.2	+5.5	+6.8	+4.6	+7.8	2,714
EITC share	3	7.7	9.7	+5.7	+5.0	+6.4	+4.2	+7.2	2,714
EITC share	4	9.7	11.5	+4.9	+4.2	+5.5	+3.6	+6.1	2,715
EITC share	5	11.5	13.4	+4.3	+3.6	+4.9	+3.0	+5.5	2,714
EITC share	6	13.4	15.4	+3.3	+2.5	+4.1	+1.7	+4.8	2,714
EITC share	7	15.4	18.0	+2.0	+0.7	+3.2	−0.2	+4.2	2,715
EITC share	8	18.0	21.3	+0.8	−0.4	+2.0	−1.2	+2.8	2,714
EITC share	9	21.3	26.3	−1.5	−3.2	+0.1	−4.0	+1.0	2,714
EITC share	10	26.3	72.7	−5.2	−6.9	−3.5	−8.1	−2.3	2,715

The two lines cross between the fifth and sixth deciles. Points above the dashed rule at zero are deciles that swung toward the Democrats, and most points of both lines sit above it. Each point is the mean swing of the decile weighted by 2020 votes, with a 95% interval clustered on county. Values in Table 1.

Note: ZIP code tabulation areas are ranked by the share of their returns that report a net capital gain or claim the earned income tax credit and split into ten groups of equal size. Each point is the mean swing weighted by 2020 votes, and the band is a 95% interval clustered on county. The data table also gives intervals clustered on state, which are wider; the intervals of the four end deciles still exclude zero. ZIP codes with 100 or fewer votes in 2020 are excluded.Source: Precinct votes allocated to ZIP code tabulation areas (Fekrazad 2025), 2016 and 2020; IRS Statistics of Income ZIP-code data, tax year 2022; ACS 5-year estimates; weighted by 2020 votes

Tax returns by postal ZIP code, votes by census area

The shares come from IRS Statistics of Income data for tax year 2022: for each ZIP code, the share of returns that claimed the credit and the share that reported a net capital gain. The votes are precinct returns for 2016 and 2020 that Fekrazad allocated to ZIP code tabulation areas, the census approximation of a ZIP code, in proportion to household population [1]. The IRS tabulates by postal ZIP code and the votes sit in the census area, so the two sides of each comparison are different approximations of the same place. The sample is 27,144 ZIP codes in the contiguous states with more than 100 votes in 2020 and complete IRS and census measures. Each is weighted by its 2020 votes, with errors clustered by county because ZIP codes in one county share local conditions. The tax year of the shares follows both elections. The poverty, college and race controls come from an American Community Survey file that does not record its release, so they cannot be dated against the swing. The regressions below are descriptive, and no coefficient in them is an effect of a share on the vote. The report gives every estimate with its interval and sample size.

Holding college fixed reverses the capital-gains sign

The ladder in Figure 2 puts each share into a regression of the swing, one set of controls per row, every row a separate model on the same ZIP codes. A coefficient is the difference in swing, in points of margin, between ZIP codes one standard deviation apart on the share. With no controls it is +2.4 (95% CI 2.0 to 2.9) for the capital-gains share. With the college share held fixed, which is to compare ZIP codes with similar college shares, it is −1.0 (95% CI −1.6 to −0.4), and the sign reverses. That college share is the college variable of the ZIP-code demographic file, and what it counts, degrees only or some college or more, is unresolved. The file calls it the share with a college degree or higher, but aggregated to counties its level sits far above the county bachelor's share. Every adjusted result in this chapter is conditional on that coding. Holding the poverty rate fixed instead brings it to +0.3 (95% CI −0.1 to 0.7), so most of the raw association is shared with low poverty as well as with college.

The reversed sign does not show a Republican lean among capital-gains filers. The capital-gains share correlates +0.8 with the college share, so the regression has little independent variation in the capital-gains share to work with, and the sign depends on which other controls are present. With intervals clustered on state instead of county, both capital-gains intervals that hold the college share fixed include zero, while every other interval in the ladder keeps its side of zero. Work on Western democracies from 1948 to 2020 found higher-educated voters moving toward parties of the left while high-income voters kept voting for the right [2]. It describes individual voters and is consistent with an education pattern in the ZIP-code swing.

Figure 2

Controls take the EITC coefficient to about zero and change the sign of the capital-gains coefficient

Weighted regression coefficient of the 2016 to 2020 swing on the share of returns, one set of controls per row; 95% intervals clustered on county in the first view and on state in the second

EITC share

Capital-gains share

Points of swing per standard deviation of the share (positive is toward the Democrats)

Show data

Data for Controls take the EITC coefficient to about zero and change the sign of the capital-gains coefficient
Share	Controls	Coefficient	Lower bound, county clusters	Upper bound, county clusters	Interval, county clusters	Lower bound, state clusters	Upper bound, state clusters	Interval, state clusters	Partial correlation	Lower bound	Upper bound	ZIP codes	County clusters	State clusters
EITC share	No controls	−3.48	−4.01	−2.96	Below zero	−4.31	−2.65	Below zero	−0.475	−0.520	−0.431	27,144	3,088	49
EITC share	Poverty rate	−1.69	−2.73	−0.65	Below zero	−3.35	−0.03	Below zero	−0.140	−0.221	−0.068	27,144	3,088	49
EITC share	Average tax rate	−4.12	−5.00	−3.23	Below zero	−5.50	−2.74	Below zero	−0.428	−0.488	−0.371	27,144	3,088	49
EITC share	College share	−2.08	−2.86	−1.30	Below zero	−3.38	−0.78	Below zero	−0.222	−0.289	−0.158	27,144	3,088	49
EITC share	Average tax rate and college share	−2.76	−3.58	−1.93	Below zero	−4.10	−1.41	Below zero	−0.290	−0.356	−0.229	27,144	3,088	49
EITC share	Poverty, college, Black and Hispanic shares	+0.32	−0.76	+1.39	Includes zero	−1.24	+1.87	Includes zero	+0.021	−0.051	+0.085	27,144	3,088	49
Capital-gains share	No controls	+2.42	+1.98	+2.86	Above zero	+1.84	+3.00	Above zero	+0.330	+0.288	+0.376	27,144	3,088	49
Capital-gains share	Poverty rate	+0.31	−0.09	+0.71	Includes zero	−0.23	+0.85	Includes zero	+0.038	−0.006	+0.087	27,144	3,088	49
Capital-gains share	Average tax rate	+4.05	+2.59	+5.51	Above zero	+2.58	+5.51	Above zero	+0.249	+0.181	+0.314	27,144	3,088	49
Capital-gains share	College share	−1.02	−1.61	−0.43	Below zero	−2.08	+0.03	Includes zero	−0.093	−0.145	−0.038	27,144	3,088	49
Capital-gains share	Average tax rate and college share	+1.38	+0.13	+2.62	Above zero	−0.26	+3.02	Includes zero	+0.087	+0.017	+0.155	27,144	3,088	49
Capital-gains share	Poverty, college, Black and Hispanic shares	−2.74	−3.22	−2.26	Below zero	−3.49	−2.00	Below zero	−0.258	−0.296	−0.214	27,144	3,088	49

In the capital-gains panel the dot sits right of the zero rule in the No controls row and left of it in the College share row. It moves back to the right when the tax rate is added and left again under the full set. In the EITC panel the dot stays left of the rule until the last row, where it sits near zero and its interval crosses the rule. The second view clusters the intervals on state. Values in Table 4.

Note: Each row is a separate regression with the controls named on the row, and each uses the same ZIP codes. Race means the Black share and the Hispanic share of residents. The full set is poverty, college, Black and Hispanic shares and does not include the average tax rate, which is the mean effective federal income tax rate in the ZIP code. The ZIP-code college share is the file's college variable, whose definition is unresolved: the file describes it as the share with a college degree or higher, but its level is far above a bachelor's share. Every row that holds it fixed depends on what it counts. The row that holds only the average tax rate fixed is in the data table and not in the chart.Note: Partial correlations for each row are in the data table.Source: Precinct votes allocated to ZIP code tabulation areas (Fekrazad 2025), 2016 and 2020; IRS Statistics of Income ZIP-code data, tax year 2022; ACS 5-year estimates; weighted by 2020 votes

Poverty, college and race leave the EITC link near zero

The EITC coefficient is −3.5 (95% CI −4.0 to −3.0) with no controls. With the poverty rate, the college share and the Black and Hispanic shares of residents held fixed, a set that leaves out the tax rate, it is +0.3 (95% CI −0.8 to 1.4). That interval includes zero under both clusterings. A ZIP code with many EITC claims is, on average, poor, has a lower college share and has more Black and Hispanic residents. The link between the EITC share and the swing is partly a link between those characteristics and the swing, and the data do not show a separate association once they are held fixed. Starr County, Texas, and Holmes County, Mississippi, have nearly the same share of returns claiming the credit. Between 2016 and 2020 Starr swung 56 points toward the Republicans, the largest in the county sample, and Holmes 1.7 points. The Hispanic share of residents in Starr and the Black share in Holmes are both in the full set of controls. The pair is picked for the contrast, and the regressions do not test whether those shares account for either swing. The rows that hold the average tax rate fixed are the least reliable in the ladder, because the rate is highest where capital-gains returns are common and lowest where EITC claims are.

Investors lean Republican within education groups

The ZIP-code results describe places. The Cooperative Election Study asks voters whether they have money in the stock market and records their vote, so it can compare people with the same education. A college degree here means a four-year degree or more. Figure 3 gives the Democratic minus Republican margin among voters for the two major parties in 2016 and 2020. In both years and in both education groups, investors voted more Republican than non-investors. Between the two elections, investors without a degree moved toward the Republicans while non-investors without a degree moved toward the Democrats, and among graduates the data do not show a difference between the moves. Graduates are more likely to invest, and they vote more Democratic than non-graduates within every investor group. A ZIP code with many college-educated adults has many capital-gains returns and moved toward the Democrats, while an investor with a given degree leans Republican relative to a non-investor with the same degree. The place-level and voter-level results disagree about the raw association and agree in sign once education is held fixed, which is what this composition predicts. Gelman and coauthors found a similar reversal between states and individuals, in which richer states vote more Democratic while richer individuals within them vote more Republican [3].

Figure 3

Investors voted more Republican than non-investors with the same education in 2016 and 2020

Democratic minus Republican margin among voters for the two major parties, by year, education and whether the respondent reports investments; 95% intervals; positive is toward the Democrats

Non-investors
Investors

Show data

Data for Investors voted more Republican than non-investors with the same education in 2016 and 2020
Item	Year and education	Group	Margin (points)	Lower bound	Upper bound	Voters	Comparison group	Margin (points)	Lower bound	Upper bound	Voters	Group minus comparison (points)	Lower bound	Upper bound	Group's change, 2016 to 2020 (points)	Lower bound	Upper bound	Comparison group's change (points)	Lower bound	Upper bound	Group's change minus comparison's (points)	Lower bound	Upper bound
investor	2016, no college degree	Investors	−15.2	−18.2	−12.2	9,191	Non-investors	+2.9	+0.4	+5.3	15,098	−18.1	−21.9	−14.2	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a
investor	2020, no college degree	Investors	−20.7	−23.5	−18.0	9,501	Non-investors	+6.4	+3.8	+8.9	15,452	−27.1	−30.8	−23.4	−5.5	−9.6	−1.5	+3.5	0.0	+7.0	−9.1	−14.4	−3.7
investor	2016, college degree	Investors	+14.9	+12.6	+17.1	10,328	Non-investors	+20.8	+17.8	+23.8	6,186	−5.9	−9.6	−2.2	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a
investor	2020, college degree	Investors	+19.4	+17.3	+21.4	12,826	Non-investors	+29.7	+26.4	+32.9	6,006	−10.3	−14.2	−6.5	+4.5	+1.4	+7.5	+8.9	+4.5	+13.3	−4.4	−9.7	+1.0
homeowner	2016, no college degree	Homeowners	−20.1	−22.3	−17.9	16,702	Renters	+27.3	+23.8	+30.8	6,697	−47.4	−51.6	−43.3	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a
homeowner	2020, no college degree	Homeowners	−20.6	−22.8	−18.4	16,241	Renters	+26.2	+22.6	+29.7	7,650	−46.7	−50.9	−42.5	−0.4	−3.5	+2.7	−1.1	−6.2	+3.9	+0.7	−5.2	+6.6
homeowner	2016, college degree	Homeowners	+7.9	+5.8	+9.9	12,186	Renters	+44.9	+41.5	+48.4	3,873	−37.1	−41.1	−33.0	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a
homeowner	2020, college degree	Homeowners	+12.7	+10.6	+14.7	13,685	Renters	+50.6	+47.3	+54.0	4,566	−38.0	−41.9	−34.1	+4.8	+1.9	+7.7	+5.7	+0.9	+10.5	−0.9	−6.5	+4.7

In every row the filled dot for investors lies to the left of the open dot for non-investors. In 2020 the gap was 27.1 (95% CI 23.4 to 30.8) points among voters without a college degree and 10.3 (95% CI 6.5 to 14.2) points among graduates, and both rows for graduates lie to the right of both rows for non-graduates. The second view compares homeowners with renters. Values in Table 7.

Note: A college degree means a four-year degree or more; some college and two-year degrees count as no college degree. Intervals are model based: they use the effective sample size implied by the weights and treat the weighted sample as a simple random sample. Vote choice is self-reported in the post-election wave; the investor and homeownership items come from the respondent's profile. The 2016 and 2020 estimates come from separate samples of voters, and voters who report a housing status other than owning or renting are left out of the homeowner view. The data table gives each group's change in margin from 2016 to 2020 and the difference between the two changes on the 2020 rows.Source: Cooperative Election Study, 2016 and 2020; respondents who voted for one of the two major parties; weighted (post-election weight)

What ZIP-code shares cannot tell you

The ZIP-code results are associations between places and do not say how a capital-gains filer or an EITC claimant voted, a limit known as ecological inference. Group and individual correlations can differ [4]. The shares describe filers for a tax year that follows both elections, so the poorest households and some retirees are missing and a ZIP code's income mix is measured after the swing. The votes are allocations of precinct returns to census areas, with a change of source between 2016 and 2020, and both the allocation error and the source change enter the swing. More controls cannot resolve the capital-gains result, because the share and the college share move together across ZIP codes and the college variable has no resolved definition. The data cannot say how much of the association is capital gains and how much is education.

Go deeper

The report: every estimate with its interval and sample size.
Tables: every figure of the report as a table.
Neighborhoods: the explorer for this part.

Same question at another grain:

Income
- Chapter 3.5, The income ladder Individuals
- Planned, Income and the county vote (planned) Places
- Planned, System justification (planned) Countries

Reading paths that include this chapter:

Income and class

Data sources

Precinct votes on census geographiesPrecinct votes allocated to ZIP code tabulation areas, contiguous states, 2016 and 2020 (Fekrazad 2025, RLCR), joined to the project's ZIP-code demographic file (ACS-based; release not recorded)Years: 2016 and 2020 (contiguous United States only) · Weights: 2020 votes in each ZIP code (pres_tot_2020); ZIP codes with 100 or fewer votes dropped · License: CC0 (data doi:10.7910/DVN/Z8TSH3), as stated in the project README.
IRS SOI ZIP code dataIRS Statistics of Income ZIP-code data, tax year 2022: share of returns claiming the earned income tax credit, share reporting a net capital gain, mean effective tax rateYears: Tax year as distributed with the ZCTA atlas file. · Weights: none (administrative counts by ZIP code); ZIP codes weighted by 2020 votes in the analysis · License: See the provider's terms of use.
County election returnsCounty presidential returns, 2016 and 2020, repaired file; the county swing and the county weightsYears: President 1868-2024 (40 elections); House and Senate 1990-2024 · Weights: none (full counts); county estimates weighted by 2020 two-party votes · License: The Heideman file is CC BY 4.0 (doi:10.5281/zenodo.22976553), but the state records behind it keep their own terms, and the sites of Florida, Indiana, Colorado and Wisconsin restrict reuse.
County demographics panelCounty demographics panel, 2020 election-year row: bachelor's share, poverty, Black and Hispanic sharesYears: 2000-2024 (election years, interpolated between census and survey anchors) · Weights: none (full counts and interpolated estimates) · License: US government source data, public domain. The interpolated panel is derived work.
Cooperative Election StudyCooperative Election Study, 2016 and 2020: investor and homeowner items and college degree, respondents who voted for one of the two major partiesYears: 2006-2024 (every year; self-reported turnout is available in the 10 even years) · Weights: post-election weight (weight_post) · License: See the provider's terms of use.

All data sources

References

Fekrazad, Amir (2025). A dataset of US precinct votes allocated to Census geographies with precision. Scientific Data 12: 794. doi:10.1038/s41597-025-05140-3
Gethin, Amory; Martínez-Toledano, Clara; Piketty, Thomas (2022). Brahmin Left Versus Merchant Right: Changing Political Cleavages in 21 Western Democracies, 1948-2020. Quarterly Journal of Economics 137(1): 1-48. doi:10.1093/qje/qjab036
Gelman, Andrew; Park, David; Shor, Boris; Bafumi, Joseph; Cortina, Jeronimo (2008). Red State, Blue State, Rich State, Poor State: Why Americans Vote the Way They Do. Princeton University Press.
Robinson, W. S. (1950). Ecological Correlations and the Behavior of Individuals. American Sociological Review 15(3): 351-357.

How to cite

@misc{singh2026wagescapitalandthecountyvote,
  author = {Singh, Vishal},
  title = {Wages, capital and the ZIP code vote},
  year = {2026},
  url = {https://vishalsingh.org/politics/wages-capital-and-the-county-vote},
  note = {In The Public Mind. Published 30 September 2026.}
}