Economy: Wisconsin Offers a Real Political Lesson for Progressives

Presidential candidates always have flattering things to say about the states they happen to be campaigning in. Sometimes those flattering words happen to be true. One of those times came last week, with Senator Barack Obama on the campaign trail in Wisconsin. "This is our time," Obama declared, "and where better to affirm our ideals than Wisconsin, where a century ago the Progressive movement was born?"

American progressives do indeed owe an enormous debt to Wisconsin. In fact, we can trace back to Wisconsin many of social decency's most basic building blocks.

A short list: Wisconsin reformers pioneered "workmen's compensation" to protect workers injured on the job and later enacted the nation's first state law that extended benefits to unemployed workers. In the early years of the 20th century, Wisconsin evolved the direct primary and outlawed legal discrimination against women before any other state. Progressives who cut their eye teeth in Wisconsin a hundred years ago would go on to play, a generation later, key roles in the New Deal. One would author the original Social Security Act.

But Wisconsin's precedent-setting progressives don't just deserve our admiration. They deserve our attention. These earnest activists still have much to teach us. They understood a political reality many progressives today simply do not get: In a deeply unequal society, progressives can only succeed when they struggle to cut the rich down to democratic size. "The supreme issue," as Wisconsin's "Fighting Bob" La Follette put it back in 1912, "is the encroachment of the powerful few upon the rights of the many."

La Follette took office as Wisconsin's first progressive governor in 1901. At the time, Wisconsin's richest 1 percent owned half the state's property. A mere 10 percent of the state's wealth, meanwhile, belonged to Wisconsin's bottom 80 percent. Wisconsin progressives would campaign to reverse that maldistribution from a variety of angles. They fought to curb corporate monopoly power. They pushed for inheritance taxes. And they battled for something then unknown in America: a progressive income tax. Wisconsin activists would win that battle. In 1911, their state became the first in the nation with a graduated tax on income. By that time, La Follette had been elected to the U.S. Senate, where he was leading the charge for progressive income tax rates at the federal level. His efforts would, during World War I, bear some significant fruit. By the war's end, Congress had upped the top tax rate on income over $1 million to 77 percent.

"So long as there is an income to be found in the country so large that it yields to its possessor a surplus over and above what he needs for the comfort or even luxuries of life for himself and his family," La Follette thundered in the debate over war finance, "I am in favor of taking such portion of that surplus income by taxation as the government needs for war purposes, and if it needs it all, I am in favor of taking it all before we take one penny from the slender income of the man who receives only enough to provide himself and family with the bare necessaries of life."

We don't hear that sort of thunderin the Senate today, or anywhere else in the upper echelons of American politics. Here in the early 21st century, the political leaders who seek progressive votes have much more modest agendas. How modest? All the candidates who entered 2008 campaigning for the Democratic Presidential nomination agreed that the nation needs to roll back the George W. Bush tax cuts for the wealthy enacted in 2001 and 2003. But none of the Presidential candidates dared go any further.

In the 2008 primaries, all the Democratic candidates have been willing to swallow, as an acceptable tax-the-rich standard, the 39.6 top tax rate on high incomes in effect when George W. took office. That 39.6 percent top rate equals just over half the rate that progressives like Bob La Follette won back during World War I. The right, of course, bitterly attacked World War I-era progressives for their tax-the-rich sentiments -- with the same sort of Reaganesque rhetoric that conservatives still use today. Warren Harding, who would become President in 1921, blasted La Follette for attempting to "instill in the hearts of men envy, jealousy, and suspicion of all who succeed." La Follette would not back down, and Wisconsin voters loved him for his unrelenting opposition to grand accumulations of private wealth. They regularly re-elected him by record margins.