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How the 1 Percent Suckered the Tea Party Crowd into Doing Their Bidding

When the super-rich feel threatened, they foment grassroots uprising on their behalf. Here's why it always works.

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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.