Clawing Back the Top 1%

At Crooked Timber, Joe Quiggin thinks it’s time for the policy debate to do like Willie Sutton and go where the money is: the wealthiest 1% in the US. Quiggin writes, “The wealth that has accrued to those in the top 1 per cent of the US income distribution is so massive that any serious policy program must begin by clawing it back.”

Matt Yglesias bizarrely thinks this misses the point and politics should also care about quality of life issues like traffic jams and the high murder rate. He also unintentionally suggests things which go directly towards reversing the unequal distribution of wealth – improving healthcare, reducing the number of hours Americans work and increasing the amount of vacation workers can take. It’s not really relevant that Americans on average have more wealth than most of the rest of the world’s peoples. Most workers making $30,000 a year aren’t poised to move to Nairobi and get more value for their money. Saying something should come first doesn’t mean subsequent quality of life issues can’t be addressed. As I read it, Quiggin is simply saying that by addressing the top 1% first, you’re in a position to actually address those other issues effectively.

The power of wealthy elites – specifically the top 1% – manifests itself by almost every current policy debate being a question of how best to transfer wealth from working and middle class Americans to the rich. The debt ceiling/deficit debate is a perfect example in that the only two sanctioned poles for an appropriate solution are a large, rapid transfer of wealth to the rich and a massive, rapid transfer of wealth to the rich. This is the sign of a truly broken political system (a problem that Yglesias seems to have no desire to confront).

Quiggin has a prescription for how to begin a move towards policies which take aim at wealthy elites:

One thing the Tea Party has shown is that, in the current dire state of the US, there are few penalties for abandoning moderation. What the US needs at this point is someone willing to advocate a return to the economic institutions that made America great – 90 per cent top marginal tax rates, strong trade unions, weak banks and imprisonment for malefactors of great wealth.

Quiggin sees the best starting point for this is a primary challenger to Obama. Maybe that’s right, maybe it isn’t. I’m not sure that aggressive, populist policies need to necessarily to fit into the framework of electoral politics first and foremost. The things Quiggin suggests – taxing the rich at more historically high levels, increasing worker rights and bank accountability – don’t actually have a basis in electoral politics. Their basis is in policy, advocacy and organizing. So I’d put it differently. While I don’t think a primary is sufficient to achieve these things, if there were a primary it would necessarily have to address these issues and elevate them in national debate. This isn’t to say that a primary can’t or shouldn’t happen. But coming out of the last five-plus years of electoral politics qua grassroots organizing I’m not confident that it’s the best vehicle for achieving positive societal change.

2 thoughts on “Clawing Back the Top 1%

  1. I don’t understand how clawing back the income of the top 1% helps address the fact that the American health care system is inefficient. Suppose we raised income taxes on households earning over $300,000 a year and then redistributed the money on a flat per capita basis to the rest of the population. People would have more money, but a lot of their money would still end up being spent on health care. And it would still end up being spent on a health care system that produces very little value compared to other health care systems.


  2. Thanks for commenting Matt.

    I would say that clawing back money from the Top 1% could be used to fund existing government healthcare programs or, more fruitfully, expand government healthcare offerings through either Medicare for All or a public option.

    More to the point, by weakening the clout of the top 1% by taxing them at a higher rate, it should be more possible for the policy objectives of labor unions and other working and middle class advocacy entities to be achieved. That would include things like universal healthcare. In the absence of universal, government-provided healthcare, it could also include things like dramatically increasing the regulation of the private insurance, pharmaceutical and for-profit healthcare industries – where much of the inefficiencies currently lie.


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