On
Election Day, November 2, 2010, more than eight million Americans voted
for congressional candidates who claimed to represent the Tea Party and
its grassroots insurgency against the federal government. Most of the
Tea Party candidates won. Their victory marked a sea change in American
government. Even before the winners were sworn in, reporters began to
refer to the 112th Congress as “the Tea Party Congress.” On the day of
the swearing-in, the prominent Tea Party backer David Koch likened the
electoral success of the Tea Party to the American Revolution. “It’s
probably the best grassroots uprising since 1776 in my opinion,” he
said.
The proposals of the new Congress had little in common with
the revolutionary slogans of 1776, but many of them would be familiar to
activists who had participated in the grassroots uprisings on behalf of
the rich in the twentieth century.
On January 5, for example,
House Republicans introduced a “balanced budget amendment” that was
really a tax limitation amendment—modeled on the precedents that the
National Taxpayers Union and the National Tax Limitation Committee had
furnished in the 1970s. A flurry of other balanced budget amendment
bills followed. On January 23, Senate Republicans, led by Orrin Hatch,
introduced a tax limitation/balanced budget amendment bill of their own
that was even more restrictive.
The next day, Representatives
Steve King (R-IA) and Rob Woodall (R-GA) introduced a one-sentence
proposal to repeal the Sixteenth Amendment. On March 15, 2011,
Representative Ron Paul (R-TX) introduced the Liberty Amendment,
precisely as Willis Stone drafted it in 1956.
And throughout the
session, Republicans introduced bill after bill to cut top income tax
rates and make estate tax repeal permanent. Many of these tax proposals
were regressive enough that they might have made even an Andrew Mellon
blush. But they would have warmed the heart of J. A. Arnold if he could
have lived to see them. They could almost have been copied from the 1927
program of the American Taxpayers’ League.
Thanks
in part to proposals like these, the Tea Party Congress is likely to be
remembered as one of the most conservative Congresses in American
history. Scholars have described this rightward turn in Congress as
“historic,” as “a new phase in the extreme ideological polarization of
U.S. politics,” and as a “historically unprecedented development.” And
they have pointed to unprecedented conditions to explain it. The
historic segmentation of media markets is said to have allowed voters to
surround themselves in closed and ideologically extreme social worlds.
The influx of money into politics following the Supreme Court’s decision
in Citizens United v. Federal Election Commission, 558 U.S. 50 (2010),
is said to have given an edge to ultraconservative candidates whose
policy proposals flatter the pocketbook interests of the very richest
Americans.
Some new conditions like these are surely part of the
explanation for how such radically inegalitarian tax policy proposals
came to dominate the policy agenda of Congress. But these new conditions
cannot be the whole story, because so many of the proposals themselves
are old: not founding-fathers old, but early-twentieth-century old. They
are the harvest of a century of rich people’s movements.
Why Rich People’s Movements Now?
What
can we say about the sources of this new radicalism, and how long it is
likely to be with us? The answers depend on a proper understanding of
the history of rich people’s movements.
Even commentators who
recognize that the Tea Party has historical roots might be forgiven for
thinking those roots do not go very deep. Social scientists have noticed
other movements that share many of the hallmarks of rich people’s
movements—including the use of protest tactics by relatively affluent
people; the fact that the activists were already fully enfranchised
participants in the political system; and the fact that these activists
seem to demand the preservation of comfortable consumer lifestyles,
rather than the realization of some utopian vision of the future—and
have argued that these are distinguishing characteristics of
late-twentieth-century social movements. An influential body of
scholarship on “new social movements” argues that protest movements took
on these characteristics in postindustrial economies of the late
twentieth century because economic development had made earlier agrarian
and industrial class conflicts passé. The rising incomes of even
ordinary wage earners made the late-twentieth-century United States into
a consumer society. It is small wonder, to this way of thinking, that
some protest movements today consist of affluent consumers protesting
their taxes, rather than wage earners protesting their poverty. Another
body of scholarship argues that the professionalization of social
movement organizations in the late twentieth century made possible a
mainstreaming of social protest, by taming the more disruptive
protesters and by standardizing tactics so that they became easier for
ordinary citizens to learn and apply in new contexts. Some scholars have
also credited, or blamed, the mass media for the spread of social
movements to the middle classes. Television, for example, brought images
of the 1960s protest movements to middle-class households around the
country, and thereby taught a new style of politics to previously staid
suburbanites. All of these scholars describe how the economic and
technological transformations of the twentieth century made the social
movement repertoire available to ever-more affluent people. It is
tempting to see the rich people’s movements of our time as the endpoint
of these transformations—the newest new social movement, the capstone on
the social movement society, or the last ripple in the widening circle
of people who have appropriated and repurposed the political techniques
of the poor.
Whatever the uses of theories like these for
explaining the emergence of new social movements in the late twentieth
century, they would miss the mark in accounting for rich people’s
movements, because rich people’s movements are not that new. When the
Texas tax clubs under the leadership of J. A. Arnold mobilized for tax
cuts in the top brackets, they were not expressing the demands of
suburban consumers in a postindustrial economy; they were advocating for
the interests of rural bankers in a predominantly agrarian economy.
When Edward Rumely and Vivien Kellems first began to commit civil
disobedience in protest against the federal income tax, television had
not yet brought images of the Civil Rights movement into the homes of
millions of Americans. For much of the twentieth century, these
movements relied on tactics that were decidedly old-fashioned even for
their times. In the 1940s, Rumely used direct mail techniques to bypass
existing civic associations and recruit directly, because that was the
model that he had learned in the Progressive Party. In the 1950s,
Kellems organized through women’s clubs, argued on the basis of
constitutional rights, and attempted to inspire imitators through civil
disobedience, because those were the techniques she had learned from the
fight for woman suffrage. In the 1960s, Willis Stone recruited
supporters for the Liberty Amendment through fraternal organizations and
veterans’ organizations, because those were the organizations in which
he had acquired his own civic education after the First World War. The
tactics of all of these activists hearkened to the early decades of the
twentieth century because these social movement entrepreneurs acquired
their skills and organizing experience in social movement organizations
of that era.
Many activists in rich people’s movements know that
their movements have deeper roots in the early twentieth century. In
particular, they have often portrayed their movements as reactions to
the so-called revolution of 1913. The ratification of the Sixteenth
Amendment, according to these activists, was a turning point in the
history of the United States. It marked the end of limited government
and the beginning of a new era of expanding federal power. If any great
social change of the twentieth century paved the way for rich people’s
movements, according to this story, it was not economic growth or the
development of the postindustrial economy or the development of new
communications technologies, but the growth of the federal budget; and
that development, the story goes, was set in motion by the Sixteenth
Amendment.
This activist story also gets the causal dynamics
wrong. It is true that rich people’s movements would not have emerged in
the absence of federal taxes on income and wealth. But such movements
are not inevitable just because the Constitution authorizes progressive
taxes. They did not emerge in direct response to the ratification of the
Sixteenth Amendment. To contemporaries, there was no “revolution of
1913.” It was not until after World War I that the dramatic consequences
of the new federal income tax became clear. Nor did these movements
grow in lock-step with the long-term expansion of the federal budget.
By
comparing the campaigns described in this book, we can see instead that
rich people’s movements arose episodically in response to immediate
policy threats. The particular policies that provoked protest were
heterogeneous. The top statutory tax rates on income and wealth
nevertheless give us a crude but serviceable index of policy threats to
the rich. By fixing our attention on the timing of new campaigns, the
figure illustrates the simple point that activists started these
campaigns in the wake of policy threats. It was not heavy taxes that
caused protest. It was rapid tax increases on the rich that did.
Two
late-twentieth-century campaigns look like exceptions to the rule, but
these exceptions are more apparent than real. The campaign to revive a
tax limitation amendment in 1978, for example, began at a time when top
rates of federal income and estate tax were stable. However, activists
launched this campaign at that time in order to capitalize on an
influential movement for state and local property tax limitation; and
that movement was triggered by policy changes that produced a rapid
increase in local property taxes. The revival of a campaign for estate
tax repeal in 1993, at a time when estate tax rates had not changed for
almost a decade, also looks like an exception to the rule. However, the
activists who inaugurated that campaign were responding to a proposed
increase in the estate tax, and their movement gained adherents when a
previously scheduled expiration of the top tax rate was revoked. Even
these campaigns were triggered by policy threats.
History teaches
us that policy threats are necessary conditions for the emergence of
rich people’s movements. Such threats help to explain not just when
people felt aggrieved enough to protest taxes on the rich, but also who
felt aggrieved enough to support tax cuts for the rich. In every case,
the pool of potential recruits extended well below the top tax brackets.
The non-rich sympathizers, however, always had particular reasons to
see top tax rates as threatening—from the farm mortgage bankers of 1924
who feared that high tax rates advantaged their competitors, to the
married women of 1952 who saw that they were subject to higher marginal
tax rates than their husbands, to the upper-middle-income taxpayers of
1978 who saw that inflation could push them into higher income tax
brackets. Many people like these campaigned for tax cuts in the top
brackets because they believed they were also protecting their own
economic security.
These movements took advantage of the structure
of political opportunities established by the American constitutional
order, which may help to explain why they seem so distinctively
American. In Western Europe, affluent people who feared taxes on the
rich in the twentieth century sometimes started new political parties.
But they rarely used the sort of populist tactics employed in the United
States, and they never made the sort of constitutional arguments that
characterized the American movement. Perhaps it is unsurprising that the
American rich and their allies turned to social movement organizing and
interest group lobbying instead of third-party politics; the
combination of direct presidential elections, single-member districts,
and the winner-takes-all electoral system make it difficult for small
political parties to achieve anything in the United States. But there is
more to the explanation than that. These political institutions merely
create obstacles to founding new political parties. They do not dictate
which alternative to party politics will be pursued by threatened
people.
Why did policy threats to the rich provoke grassroots
movements instead of conventional interest-group lobbying? Given the
ease with which many rich people have secured selective tax privileges
by back-room lobbying, the choice to pursue universalistic benefits for
all rich people by means of public grassroots lobbying campaigns is
puzzling. The solution to this puzzle is tradition. The rich and their
allies joined grassroots social movement campaigns because that is what
they were recruited and taught to do by experienced movement
entrepreneurs. Those entrepreneurs were passing on tactical skills and
lore that they had learned in other movements. To call this set of
political practices a tradition is to say that it is more than merely a
recurrent phenomenon. It is to say that similar patterns recur because
people learn from and imitate the past.
It may be that all social
movements rest on a bedrock of tradition. For rich people’s movements,
however, the existence of a social movement tradition was almost
certainly indispensable. Short-term causes such as policy threats were
necessary, but not sufficient, conditions to explain mobilization.
Social movement tactics have a history; they must be passed down in
order to become available to particular people at a particular time. It
is doubtful whether rich people’s movements would exist at all today if
activists did not have a long movement tradition to draw on.
Under What Conditions Do They Win?
The
history of rich people’s movements may also tell us about their
prospects for victory in the future. Even the wildest optimists in the
Tea Party Caucus probably did not expect their proposals to become law,
at least as long as the Democratic Party retained the presidency and the
majority in the Senate. But the comparison of past rich people’s
movements shows that such radical proposals may influence policies even
when they are not enacted. Rich people’s movements in the twentieth
century made extreme demands that made moderate groups appear
comparatively reasonable. Sometimes they also used tactics that
threatened public order—for example, by calling on businesses to disobey
the Internal Revenue Service, or plausibly threatening to call a
constitutional convention that could throw American politics into
turmoil—and thereby permitted moderate conservatives to sell their own
preferred policies as ways to co-opt an unruly movement and restore
order. The Tea Party may have similar effects. Its activists have not
won the war against the income tax, nor are they likely to repeal the
Sixteenth Amendment. By keeping radical tax proposals on the policy
agenda, however, they have positioned a radical flank for battles to
come.
The history of rich people’s movements shows that the
mobilization of a radical flank can indeed influence the shape of
federal tax policy. Influential Republican politicians sometimes felt
compelled to propose tax cuts in order to obviate the need for more
radical proposals to repeal the Sixteenth Amendment. The Republican
chairman of the House Ways and Means Committee, Daniel Alden Reed of New
York, made this argument explicitly to his collegues in 1944. “[T]he
movement to limit federal tax rates by constitutional amendment should
be noted,” he wrote; “One way to meet this issue is by voluntary
Congressional action to establish moderate tax rate levels.” So did the
presidential candidate Dwight David Eisenhower in 1952, when he wrote
that “a prudent and positive administration should be able to approach
the goal which the amendment seeks without the difficulty and dangers
involved in the adoption or continuing operation of such an amendment to
our Constitution.” There is no evidence that rich people’s movements
had any direct influence on legislation under these leaders. But in a
handful of other instances, including the Revenue Act of 1926, the ERTA
of 1981, and the EGTRRA of 2001, there is evidence—in the timing of the
laws, in the geographic distribution of legislators’ support, and in the
statements of some members of Congress—that at least some provisions of
the law were intended as responses to movement demands. These acts
legislated some of the largest tax cuts in American history. So it is
that rich people’s movements, through their influence on the ERTA and
the EGTRRA, made a small but real contribution to the growing income
inequality—the rise of the so-called 1 percent—that is one of the most
important social changes of our time.
Sometimes rich people’s
movements had an impact, but at other times, the radical rich found
themselves isolated and powerless. Their failure to influence policy is
most evident in the case of the Sixteenth Amendment repealers. The
activists of the American Taxpayers’ Association and the Committee for
Constitutional Government tried for two decades to bend federal tax
policy toward greater inequality, with no measurable success. Their peak
years of mobilization corresponded to the years when federal income tax
rates were highest, and yet there is little evidence that they were
able to pull top tax rates down. It is possible that these movements may
have exercised a kind of diffuse cultural influence, and thereby helped
to restrain policymakers by swaying public opinion against progressive
taxation; perhaps federal revenues would have grown even more rapidly in
the absence of their grassroots pressure. History does not give us a
comparison case that would provide the critical test of this hypothesis.
But it is clear that, in many instances, their efforts had no immediate
impact. Consider the Liberty Amendment campaign. The peak years of the
Liberty Amendment Committee coincided with one of the biggest income tax
cuts in American history, but the activists could claim no credit for
the Kennedy-Johnson tax cuts. Their radical posture condemned them to
stand on the sidelines while liberal technocrats cut rich people’s
taxes.
Why were these movements sometimes so influential and other
times so impotent? The comparison of campaigns shows that
geographically dispersed grassroots mobilization made a difference.
Activists sometimes had particular influence when they were able to
mobilize in congressional swing districts, as when the tax clubs swayed
the votes of Representatives Green and Garner in 1926. As the
comparisons across states have shown, policy crafting was also crucial
for allowing these activists to get tax cuts for the rich on the policy
agenda. Some tax cuts for the rich could not get a serious hearing
because they were too politically costly. Activists had the greatest
impact when they were willing to craft their policy demands to obscure
these costs, and package their favored tax cuts with additional policy
benefits for new allies.
But to move beyond agenda access to
influence legislation required more than clever policy crafting. It also
required a critical mass of ideological allies in Congress and the
presidency. There were only three presidents in the last century who
allied themselves openly with rich people’s movements—Calvin Coolidge,
Ronald Reagan, and George W. Bush—and it was during their
administrations that these movements exercised the greatest sway over
legislative outcomes. The late-twentieth-century movement for estate tax
repeal provides a critical test of presidential influence. Activists
managed to get the Death Tax Elimination Act through both houses of
Congress, only to have it vetoed by President Bill Clinton in 2000.
Estate tax repeal would become law the following year, when President
Bush signed the EGTRRA. The support of the president made the
difference.
The program of the party that controlled Congress
mattered too. Both the Revenue Act of 1926 and the EGTRRA of 2001 passed
Congress when it was united under conservative Republican control. The
ERTA of 1981 does not quite fit this pattern. It was passed by a divided
Congress, with the help of some Democratic votes in the House. Even in
this case, however, it was near-unanimous Republican support that made
it possible; and congressional Democrats were under extraordinary
pressure from a popular Republican president and an assertive grassroots
campaign that nearly called a constitutional convention.
Rich
people’s movements, in short, may influence policy when their partisan
allies have control of elected policymaking bodies. For this reason, the
most important legacy of rich people’s movements for American politics
may be the capture of the Republican Party by veteran activists of these
movements in the twenty-first century. This also may be the most
important lesson of rich people’s movements for students of other
American social movements. Sociologists know that activists are most
likely to win collective benefits from policymakers when those
policymakers are their partisan allies. But our most successful
theoretical models of social movements persist in treating the party in
power as an external condition, like the weather. The lesson that social
movement scholars have drawn from their studies is that a movement may
be most influential when its grassroots campaign is timed to match a
window of political opportunity opened by its partisan allies in office.
The most astute activists in twentieth-century rich people’s movements
saw the same historical pattern, but they drew a different conclusion.
The lesson they drew was not that they should time their actions
carefully, or wait for partisan allies to show up and open a window of
political opportunity. It was that they should take over a political
party.
The Century of Rich People’s Movements
The
first century of rich people’s movements is over. Rich people’s
movements emerged in response to big wartime increases in the
progressive rates of income tax and estate tax; comparable tax increases
are almost unimaginable today. The most influential social movement
entrepreneurs who led these movements acquired their skills in social
movement organizations of the Progressive Era, and those movements and
organizations are mostly long gone too. 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. The barriers to amending the Constitution are so
high, for example, that the Sixteenth Amendment will almost certainly
remain unrepealed. For all of these reasons, it is tempting to think
that the story told here is at an end.
I think it is much more
likely that the story of rich people’s movements is just beginning. The
Tea Party may prove to have been a flash in the pan. The long-term
trends, however, suggest that something like it will be back. The
population of the United States is growing older. The cost of caring for
our elders and our sick loved ones continues to rise. For these
reasons, the pressure on the federal budget is unlikely to abate.
Pressure on the budget means that pressure for tax increases is unlikely
to go away; and the threat of tax increases, in turn, is likely to
stimulate more protest. Even when a tax increase can be targeted to a
narrow segment of the richest Americans, it is likely to provoke a
broader backlash, if people lower in the income distribution believe
that this policy change signals further tax increases to come. People
need not be dupes in order to protest on behalf of others who are richer
than they are. The activists and supporters of rich people’s movements
were defending their own real interests, as they saw them. A tax
increase on the richest 1 percent may be perceived by many
upper-middle-income property owners as the first step in a broader
assault on property rights. When it is so perceived, we can expect a
movement in defense of the rich.
Knowledge of the history of rich
people’s movements will not allow us to predict the date when these
movements will arise, or who exactly will join them. Such movements do
not arrive like clockwork, any more than tax increases do. What we can
predict is that some people will be ready to protest when policy threats
come. We can also predict that some skilled movement entrepreneurs will
be ready to help them organize. The proliferation of professional tax
protest organizations since the 1970s has given rise to a generation of
skilled movement entrepreneurs whose experience in rich people’s
movements equips them for future campaigns. When policy threats make
people ready to protest, there will be no shortage of movement
entrepreneurs who have the skills and the mailing lists to recruit them.
No
doubt the rich people’s movements of the future will also surprise us.
They will exploit new technologies and organizing techniques. They will
draw on some very old arguments and policy ideas, but they will
recombine them and thereby invent some new ones. They will craft their
policy proposals to recruit strange-bedfellows coalitions, just as their
predecessors did. We can be confident that they will also continue to
have all of the characteristics that so baffled observers of rich
people’s movements in the twentieth century. They will use the
traditional tactics of the poor on behalf of tax cuts for the rich.
They
will behave like outsiders, but demand policies designed to benefit
people who are consummate insiders in American politics. They will
include many protesters who look unusually well heeled, and who will
demand collective benefits for people even better off than themselves.
Rich
people’s movements have a permanent place in the American political
bestiary. As long as one of our great political parties is
programmatically 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.
Reprinted from “Rich People’s Movements” by
Isaac William Martin with permission from Oxford University Press USA.
Copyright 2013 Oxford University Press USA and published by Oxford
University Press USA. (www.oup.com/us). All rights reserved.
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