The movement tends to succeed politically when it mobilizes the upper middle class against the super-rich, but then its dependence on those same upper middle class votes significantly limits its ability to raise taxes and expand transfers to the extent that a true war on after-tax inequality would probably require.
I’ve discussed this tension before, in the context of the Democratic Party’s reluctance to let the Bush tax cuts expire for taxpayers in the $100,000-$500,000 range, but it’s worth emphasizing the point again for the de Blasio moment, because a lot of commentary on New York’s new mayor seems determined to evade it. Consider, for instance, Benjamin Wallace-Wells’ entry from New York Magazine’s “Reasons to Love New York” issue last month, in which he marveled at de Blasio’s ability to rally yuppies and Bobos behind a message of class warfare. …
… But is this constituency actually “a powerful voting bloc against inequality,” or is it just a powerful voting bloc in favor of raising taxes on the super-rich? Because these aren’t quite the same thing, and it seems to me that in New York and nationally, the class interests of the so-called HENRYs (“high earners, not rich yet”) still basically align with some form of late-1990s Clintonism rather than the more sweeping post-Obama populism than liberals are getting excited about today. That is, the allegedly “radicalized” professional class would say yes, yes, to a higher top rate on the people currently outbidding them for schools and property (and making them feel the angst of status-income disequilibrium), and yes as well to the existing welfare state and entitlements that higher rate helps sustain. But the same feeling of precariousness that makes these radicalized professionals thrill to populist rhetoric also means they’re more likely to say no to anything that might require them to sacrifice their income (or, in case of a left-libertarian housing agenda, their brownstone property values) on behalf of their working class coalition partners.
This political reality helps explain why President Obama’s campaign promise not to raise taxes on Americans making less than $250,000 turned into a tax increase that actually exempted Americans making less than $400,000; it’s why President Obama had to pretend, with unfortunate consequences, that his health care law didn’t ask anything of anyone except the rich when actually, by necessity, it asked quite a bit of a slice of the middle class and HENRY populations; and it’s why Bill De Blasio, the Tiberius Gracchus of modern Gotham, set his income-tax threshold at $500,000, thus exempting many of his professional class constituents from any kind of shared sacrifice in building up his new New York.