How I Learned to Soak the Rich
From time to time I argue that the optimal strategy for Democrats is good old egalitarian populism: soak the rich and spread it out thin. I note the polls which have, for 3 decades now, shown that a majority of US adults think that upper income people and corporations pay less than their fair share in taxes and the fact that Bill Clinton, Obama, and Biden were elected promising to raise taxes on the rich and cut taxes on everyone else.
I suppose I should address two important questions. FIrst why don’t all Democrats do this? In particular, why didn’t Mondale, Dukakis, Gore, Kerry, or Hillary Clinton do this (note the perfect 100% pattern of fitting which Democrats get elected) ? Second, given the importance of the issue and the fact that all Republicans did when they had power was cut taxes on the rich and on corporations, why do Republicans ever win elections.
I will get to these questions, but first I want to take a stroll down memory lane. First I remember a day in 1992 when I was watching the commentary on a Clinton Bush Sr debate. They had the focus group dials so that viewers could indicate agreement and disagreement. They had 3 groups: Clinton supporters, Bush supporters, and undecided voters. Clinton said of the Reagan years “only rich people got tax cuts”. The three groups (on average) each dialed in agreement. Then the calm TV commentators noted that it was unusual for supporters of one candidate to vigorously agree with the other candidate (I think it may have been more unique than unusual). The memory remains vivid.
The next year, I talked with my friend Brad DeLong then deputy assistant of the treasury for policy analysis. He introduced me to someone who was lunching on a hot pretzel and said he was the only person who really understood the budget reconciliation act. He also said that the Clinton internal pollster had polled raising taxes on the rich. First raise taxes on the rich to pay for more education spending. Huge majority for yes (education spending is always popular). The raise taxes on the rich to pay for more this or more that with always a majority for yes. Finally they lost patience and asked if people wanted to raise taxes on the rich to pay for more waste fraud and abuse. A plurality said yes.
At the time, there was the argument that, for some reason, non rich Americans supported Regan type tax cuts, because they expected to be rich some day or because they really believed the supply side story. There has never been real evidence of this and the question has been as settled as any question in social science is since 1992.
OK so Democrats missing the chance. I am fairly sure that the main issue is that they spend a lot of time talking with rich people who are less enthusiastic about raising taxes on the rich (not all opposed but less enthusiastic). One part of this is the huge amount of time and effort raising campaign cash. One other suggestion I have is that Presidential nominees should just stop doing that. They can raise absurd amounts of money in small donations. Free coverage of presidential campaigns dwarfs paid advertising. They often get in trouble saying things to donors that are supposed to remain private (Obama and “clinginh”, Romney and 47%, and Hillary Clinton and “Deplorables”).
This doesn’t get me very far as the tax code is written by Congress plus nominees have to win the nomination, but it sure seems to be a no-brainer to me.
Another issue is that opinion leaders and commentators have high incomes. Even policy makers have much higher than median incomes, but the social circle of policy makers, elite journalists and lobbyists is very high income. This means that soak the rich populism is frowned upon (I think literally). Effective democratic Democratic strategy is called demagogic (note that back in the day elite opinion leaders like Plato and Aristotle used democracy and demagogy as roughly synonymous pejoratives).
In any case, Biden has noticed the pattern and will lead the Democrats 2024 effort.
The other really puzzling question is why do people vote for Republicans. It sure does not fit opinions about big dollar taxing and spending. Earlier explanations were that the Republican party was the daddy party trusted to keep us safe with a strong defense. This makes less sense when the party is bitterly divided between hawks and isolationists. I think it is clearly not the issue (they did gain from fear of the communist menace and of terrorism but I think it is clear that this is a losing issue for them while stuck with Trump v the establishment). It used to be argued that they won based on the votes of conservative Christians. Those votes are key but public opinion has changed. I am old enough to remember when the debate was over whether gay sex should be legal and now the debate over gay marriage is over — the armies are still in the field but the outcome is no longer in doubt. Of course (as predicted by many not including me) abortion has switched from being a winning issue for the GOP to a deadly losing issue the moment the Supreme Court over-ruled Roe V Wade.
I am pretty sure the key issues are — well you recall the people in the basket of deplorables which is not empty — and the fact that GOP voters are totally clueless about current policy, proposed policy, and recent developments. I note a months ago poll in which 51% of US adults said the US was in a recession or a depression. I note the repeated report that, say, Obama campaign workers found that people in focus groups just would not believe their accurate statements about Romney’s policy proposals. I think the problem is clear (but have no idea how to solve it while a large fraction of US adults trust only conservative “news” sources). Actually looking at Gallup (link above) I found it again. There is strong support for more progressive taxation and the (highly progressive) federal income tax is called the least fair tax vs regressive payroll, state, and local taxes. The answers are not coherent at least they don’t make any sense given the actual facts (regarding which I assume the vast majority of respondents are clueless)
My only proposal is to keep policy proposals simple (as in Obama’s $1000 tax credit and Biden’s $2000). I consider three warning examples. Mondale said he was talking to us about taxes as if we were grownups (do not do this). Dukakis told his aids who told him to say something in a speech “but I already said that” and Hillary Clinton designed targeted tax credits which I have no idea what they were.
I say simple and don’t be afraid to appeal to voters’ self interest.
“Second, given the importance of the issue and the fact that all Republicans did when they had power was cut taxes on the rich and on corporations, why do Republicans ever win elections.”
“Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.”
~ Ronald Wright
Of course it isn’t correct that the poor are all going to get rich, the realistic prospect of heading in that direction still has enormous resonance, both internally and around the world. Not directly related at all, but of those countries voting Yes at the UN to a ceasefire in the Gaza war, how many have millions trying to get in?
I’d have to agree with Ronald Wright on this.
Whenever I watch ‘Grapes of Wrath’ I see this attitude about the Noble Poor fully accepting their poverty, which goes well beyond temporary embarrassment.
It’s time for an expansive new labor movement
Boston Globe – Oct 27
Redistributing wealth through higher wages — rather than government spending — is likely to appeal to people across the political spectrum.
(This is about half the op-ed. There’d be complaints if I post more, I expect.)
Silly article. Government is owned and run by the elite. Their goal is to beat down, steal and lie to the masses. The press and the academy are junior partners in this plundering racket.
If you don’t understand a problem, you cannot address the problem.
I’ve long contended our two-party system (in its current configuration) is not unlike an abuse marriage: the repubs the “daddy” and the dems the cowed ‘lesser’ partner
I would venture they vote repub because they don’t know any better. A feature, not a bug, of a compromised and generally failing educational system. It’s the third leg of that three-legged stool: keep everyone dumb, drugged and hypnotized … bare-footed barely literate rubes sprawled drooling Pavlovianly across a ‘couch’ the back seat out of a nineteen and sixty-nine Chevy Suburban stone to the bone on the Ambien, Prozac, Viagra and crotch-shots on the television. Religion fits in there somewhere too … and fear
Kool-Aid. The Ambien, Prozac, Viagra and crotch-shots on the television Kool-Aid
The majority of Dem voters are centrists, I think. The leadership might wish otherwise, but they know which side their bread is buttered on. Attention must still be paid toward progressive interests, if only because the other party will simply not do that.
Personally, I believe the Dem leadership would like to be more progressive, but it’s not really feasible.
@Fred,
Agreed. The modern Democratic Party is the conservative party. The Republican Party is the party of the extreme right. There is no significant liberal party in America today.
Unfortunately, the apparent requirement the the US have only two major parties means there can’t be a significant liberal party. The conservatives have come to dominate the GOP, and the US has no tolerance for ‘socialism’, so…
Obama and “clinginh” ?
I guess this has to do with Obama and clinging
Much was made of this back in the day.
Barack Obama Was Right About the Gun Clingers
Mother Jones – David Corn – June 7, 2022
Oddly, not a lot of Americans will put their lives on the line by joining the military, but they still seem to cherish the idea of Minutemen & Davy Crockett & Sam Houston. You don’t really want or need to hunt deer with an assault rifle. Nor do you want to join the military have some old sergeant telling you what to do all day long.
People really used to go to great lengths to avoid the Draft, and the Pentagon really did not care for the poor attitudes of young men who were drafted. That’s been fixed.
Yet the spirit of Live Free or Die lives on.
And, it seems to me, the above is just about the male portion of the population.
Is the female portion just going along, confident that they’ll never get drafted even if the draft comes back. Or are they just standing by their men?
Remember Beetle Bailey?
Never saw his forehead because he had a tattoo exclaiming his feeling toward “lifers” (seen in an anti war paper in the day). Not for a family blog!
Draftees would cause “lifers” even more pain than the “one timers” the recruiters dig up these days!
I seem to recall that the ‘real’ US military would throw you out (‘dishonorably’) if you got a tatoo of something particularly offensive to your superiors.
For me, Obama was the best president of my lifetime.
And, Joe Biden learned from him how to do the job as well as Obama.
Hillary Clinton (whom I supported) was just soooo entitled, but she was just overwhelmed by a newby outsider, and at least got to participate in his administration. Biden stood aside & let her run in 2016.
But Obama won and Hillary didn’t.
@Jack,
Hillary won the election by nearly 3 million votes. Trump was appointed by the electoral college against the will of the voters.
I find that for myself, I have to justify why the rich should pay more. After all, why should a rich person pay more to drive on public roads than a poor person? The fact that rich people use waste fraud and abuse to get better road maintenance is not enough.
The benefits of a well-educated, healthy working/consumer class to the successful business owner is obvious. Without a society that develops prosperous consumers, capitalists would not be as successful as they are. Their very success shows that society did provide a benefit for which the rich should pay.
@Arne,
Apart from the fact that the rich derive more benefits from the protection of government, there’s also the fact that taxes influence behavior. Marginal tax rates incent investment decisions; low marginal rates encourage hoarding of wealth. High marginal tax rates incent re-investment.
There is that whole greed thing.
Even if having a roof over yer head, putting food on the table, paying the rent/mortgage & the medical bills need not be too different from one person to the next, greed enters in, and if you can throw a football well or sing a song, or sell whatever (sh*t, or ideas), you are just entitled to a lavish lifestyle.
There’s a bit of a fly in that ointment: the roads in the much more affluent town next door are much better than the roads where I live and yet … I (currently) live in a much more (the most) affluent part of the country, regardless my general (5 yrs) and somewhat metaphorical observations that the roads are better in Mississippi
You lost me a bit.
Road maintenance should cost less where freezing is less, but I don’t think that was your point.
Where there’s less freezing there’s more flooding but you’re right, I must have had my hat on right, it wasn’t necessarily my point and yet, again and to your point below what’s the equitability of it? I’m not really accustomed to this kind of traffic but once you’re out there on the roads you’re just another motor vehicle, and the roads are just roads. That one locale’s taxpayers pay more for their better roads while neighboring locales do not (or will not) is pretty inconsequential to the actually act of being just another motor vehicle on just another road
It’s like airports as a great equalizer: once you’re past the gate we’re all pretty much the same, or as I used to teach traffic flaggers cars are like cows, only here not so much as almost entirely predictable but as just another car, just another cow
This of course leaves aside gas taxes and licensing fees meant to accommodate variations in use, a set of questions that remind me a lot of the tire-studs questions back home.
Mostly I think I’m looking for a weighting factor to fit into a model I have in mind, which if it did would probably be self-fulling prophesy
It also pays to remember that most rich people have assets in the form of government issued money, government allotted real estate, government chartered collectives, and government debt and that they rely on the government to regulate the markets for those and other assets. The simple fact is that private property is a government service. It isn’t some mystical heavenly grace or emergent property of physical matter.
The more private property you own, the more you should have to pay the government for it. Private property as a service has been a basic government function for thousands of years now.
P.S. Do a simple experiment. It’s your money, right? Take a bill out of you wallet and take a good look at it. Just about anywhere in the world, it has the name of the government that issued it splashed all over it along with some of that government’s official symbology. There’s a good chance that their is the name of some government bureaucrat on it. If this ruins money for you, just send it to me. Money is one of those government services I’m cool with.
@Kaleberg,
Yep. This nails it:
“The simple fact is that private property is a government service. It isn’t some mystical heavenly grace or emergent property of physical matter.
” The more private property you own, the more you should have to pay the government for it. Private property as a service has been a basic government function for thousands of years now.”
I doubt I did a good enough job expressing my thought in the previous post. We have a nominally progressive tax system which is not really progressive because the rich have more access to tax loopholes. As a first order approximation the loopholes offset the progressivity and for a large number of payers the rate is similar. Rich people do pay most of the taxes that make up government revenue.
So the question is why should they pay more.
My desire to get them to invest does not seem like a good reason.
My desire to limit their greed does not seem like a good reason.
The fact that they are getting a greater benefit does seem like a good reason. Unfortunately for the electorate and for the policy makers, the extra benefit is rather intangible.
Back to roads for a moment: Large trucks cause more road damage than passenger cars. Who benefits more from the movement of freight, the capitalist selling the stuff, or the consumer buying it?
To a considerable extent, those who benefit are those who need the stuff that’s delivered in those trucks.
Maybe when Amazon gets its helicopter delivery fleet going, things will be different.
“Soak the rich” is such a milquetoast policy proposal.
Be like Biden and stand with Shawn Fain: (His proposal has a much higher marginal rate!)
Rule of thumb seems to be that the more well-off you are, the more you ought to pay in taxes.
As my wealthy old friend, former GOP person but Trump loather, often reminds me, the wealthy pay more than half the income taxes collected in this country, so they’ve paid all that can be expected of them.
I don’t happen to agree with him. But the other part of the deal here is that, per the Supreme Court, if you have wealth you have more political influence than if you don’t have wealth.
As in, you don’t get penalized for, or prevented from, spending your assets on the furtherance of your political views,
I see that Mike Johnson & the MAGA GOP are proposing to link military aid to Israel with defunding the IRS to keep them from auditing billionaires. Am I oversimplifying? Perhaps.
They do mean to further reduce guv’mint revenues, obviously. To put additional pressure on efforts to reduce social spending. Because it’s the ‘Right’ thing to do, no doubt.