Wednesday, March 12, 2014

Rich People’s Movements: Grassroots Campaigns to Untax the One Percent

Isaac William Martin has produced an illuminating study of how the rich have utilized the political and social methods of the poor and dispossessed in order to protect their wealth in his book Rich People’s Movements: Grassroots Campaigns to Untax the One Percent

Martin begins with a description of the Tea Party demonstrations that took place on tax day, April 15, 2010. Hundreds of thousands of people turned out to issue demands that were designed to assist the wealthy in becoming wealthier.

"….they united in expressing hostility toward the taxation of income and wealth. Spokespeople for the demonstrators demanded, among many other things, an end to progressive income tax rates, a permanent repeal of the estate tax, an extension of temporary income tax cuts for the richest Americans, and a constitutional amendment that would require a supermajority vote in Congress to increase any tax on anyone, for any purpose, ever. Protesters held up picket signs denouncing taxes and the redistribution of wealth. Many asserted that the government was redistributing resources from the rich to the poor, and objected that this was unfair to the rich."

Martin describes the media response to these demonstrations as misguided in concluding that this was something new in American politics. Rather, it was merely a culmination of a long campaign.

"….they [media commentators] agreed fundamentally that populist protests against progressive taxation are something new, and that their causes must also lie in some recent transformation of American society. This book will show that this common premise is mistaken. The Tea Party protests of 2010 were new only in the sense that they were the newest expression of an old tradition."

In fact, Martin tells us that the movement name had been used earlier in a different context.

"In September 4, 1962, hundreds of conservative activists crowded into the Wilshire Ebell Theater in Los Angeles for a protest meeting that they called the California T Party. These protestors were unusually well-heeled and unusually radical. They were there to support a constitutional amendment that would outlaw all federal taxation of income and inherited wealth, and would further require the federal government to sell off virtually all of its assets in order to pay for a massive, one-time transfer of wealth to the richest Americans."

This was not just a one-off event. It was hoped to be the kickoff to a powerful national movement.

"There were two more California T Parties that week, followed by a national gathering in Chicago two weeks later, at which activists from around the country met, sang protest songs, and attended workshops on grass roots organizing for income tax repeal."

This description of the Chicago event could have served to describe a meeting in support of the Civil Rights Movement, and makes Martin’s point that the wealthy had adopted the lessons learned from the social movements of the non-wealthy and applied them to their own goals.

The wealthy can anticipate many threats to their wealth, and their wealth provides with many options to protect it. Why would they feel compelled to organize themselves into a movement?

Martin suggests that the wealthy have a primal fear of democracy. Since they are wildly outnumbered, the non-wealthy could move against them and confiscate their wealth if they chose to. The passage of the sixteenth amendment allowing the federal government to levy an income tax came to be viewed as a "revolutionary" development, and the imposition of a progressive income tax was certainly considered a form of confiscation.

A trigger was needed to arouse the rich to the extent that they would band together in common purpose. The trigger that activated movements was a common threat that would apply to all of them. Martin refers to those as "policy threats."

"Scholars refer to a policy threat when the loss of economic or personal security is attributable to a real or anticipated change in public policy."

Such an example would be a threat to raise the estate tax rate or to lower the wealth threshold for the tax. Policy threats incite action because they potentially involve a large number of people, and the perceived enemy is easily recognizable as a specific politician, a specific political party, or the entire government itself.

Martin’s analysis found that the mobilization of the rich always involved a threat to increase their taxes. Such threats excite fear not only in those directly affected but also in those who fear they might be affected either now or in the future. It was often easy for the rich to find numerous allies with more modest incomes. The threat of changes to the estate tax, for example, was always troubling to small business people and even home owners in high property value regions.

Martin identifies five distinct rich people’s movements.

1924-1929: campaign to abolish estate tax and limit income surtax rate to 25%

1936-1957: campaign for constitutional amendment limiting tax level

1951-1964: campaign to repeal federal income taxes

1978-1989: campaign for tax limitation/balanced budget amendment

1993-2001: campaign to repeal the estate tax

One might look at these movement goals and think that the efforts were failures, but the net result was that much of their economic philosophy has been absorbed as gospel by the current version of the Republican Party.

"….with few exceptions its carriers were not intellectual system-builders, but instead activists and organizers who treated ideas as tools to win arguments. Thus the tradition came to include both utilitarian arguments that justified tax cuts for the rich as a way to stimulate investment, and rights-based arguments that implied a moral duty to cut taxes regardless of utilitarian considerations. It came to include the classical [neo] liberal idea that taxation of capital is bad because it distorts investment decisions, alongside the classical republican idea that it leads to tyranny. It came to include arguments that taxing the rich is bad because it generates too little revenue, and arguments that taxing the rich is bad because it generates too much revenue. Like other practical positions in American politics, the grass-roots libertarian tradition is not always logically coherent, but it is sociologically coherent: It is a real set of tactics and arguments suited to a particular position in social relations. The grass-roots libertarian position lives on today. Its features will look and sound familiar to any observer of American politics in the early twenty-first century."

There is little hope that the income tax can be repealed, but other strategies have worked to limit taxation and subdue government growth. Consider the movement for a balanced budget amendment. Who could be against balanced budgets? But with the impossibility of raising taxes to cover a shortfall, such an amendment or policy would lead to ever smaller government, and ever smaller need for tax revenue. It is a long term, but ever so effective way to protect the wealth of rich people.

The extreme radical right has also served the purpose of re-centering the political dialogue in our nation. The threat of extreme proposals and threats of constitutional conventions have led to numerous compromises that have effectively moved politics to the right. This has been supported by a media assessment that the "moderates" are those who are half way between the crazies on the right and the most radical on the left. However, there is no equivalent on the left to the radical right.

Martin describes the twentieth century activism by rich people as a single movement with several distinct upsurges in activity as opportunity for progress presented itself. The lesson rich peoples’ activists learned from the past century was that it was not efficient to bide one’s time and wait for allies to appear or propitious moments to arrive. The lesson they learned was that the most effective strategy for them was to take over a political party.

"Rich people’s movements have been thoroughly institutionalized and thereby tamed. Many former activists are now well entrenched in the Republican Party and its allied think tanks, and their tactics are now correspondingly oriented toward inside lobbying. Some movement goals remain unrealized only because they are nigh unachievable."

There will be pressure coming from several directions to increase government spending. If for no other reason, the aging of the population will demand it. This will ensure continued political conflict for the foreseeable future.

Martin closes with this conclusion:

"Rich people’s movements have a permanent place in the American political bestiary. As long as one of our great political parties is allied with the radical rich, it is safe to predict that rich people’s movements will continue to influence public policy in ways that preserve—and perhaps even increase—the extremes of inequality in America."

No comments:

Post a Comment

Lets Talk Books And Politics - Blogged