This paper develops a theory of political behavior in which values are a luxury good: the relative weight that voters place on values rather than material considerations increases in income. This idea both generates new testable implications and ties together a broad set of empirical regularities about political polarization in the U.S. The model predicts (i) voters who are sufficiently rich to afford voting left; (ii) that more rich than poor people vote against their material interests; (iii) that Democrats are internally more fragmented than Republicans; and (iv) widely-discussed realignments: rich moral liberals who swing Democrat, and poor moral conservatives who swing Republican. Assuming that parties set policies by aggregating their supporters’ preferences, the model also predicts increasing social party polarization over time, such that poor moral conservatives swing Republican even though their relative incomes decreased. We relate these predictions to known stylized facts, and test our new predictions empirically.

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