In recent years, American progressivism has been torn between two competing approaches to reducing inequality. The first focuses on the top 1 percent; the second emphasizes the bottom 10 percent.
Bernie Sanders and Hillary Clinton have been operating within the terms set by Top 1 Percent progressivism. For both the Democratic Party and the country, that’s the wrong focus.
For Top 1 Percent progressives, the accumulation of riches at the very top is what gets the juices flowing. They prioritize much higher taxes on top-earners, more aggressive regulation of Wall Street, restrictions on the compensation of chief executives, and criminal prosecution of those responsible for the financial crisis.
Top 1 Percent progressivism emphasizes the idea of fairness -- but it’s nevertheless a politics of outrage, animated by at least a trace of envy. It’s as if “millionaires and billionaires” were the principal problem facing America today.
Bottom 10 Percent progressives are not enthusiastic about concentrations of wealth. But that’s not what keeps them up at night. Their focus is on deprivation and lack of opportunity. They're motivated by empathy for people who are suffering, rather than outrage over unjustified wealth. They want higher floors for living standards, and do not much care about lower ceilings. They don't see Wall Street as some kind of public enemy.
Their defining document is one of the 20th century’s greatest speeches, delivered by Franklin Delano Roosevelt in 1944, in which he called for a Second Bill of Rights, including the right to a decent education, the right to adequate medical care and food, and the right to “adequate protection from the economic fears of old age, sickness, accident, and unemployment.”
To Bottom 10 Percent progressives, new Wall Street reforms, restrictions on CEO compensation and criminal prosecutions of bankers might be good ideas, but they can be a distraction. It's far more important to enact initiatives that would help Americans who are struggling -- by expanding the earned income tax credit, providing health care for everyone, improving childhood education, and increasing Supplemental Nutrition Assistance. (Simplification or removal of occupational licensing requirements for people who want to start a business, such as interior designers, manicurists, and florists, would also help.)
Thus far in the Democratic presidential campaign, disputes between Sanders and Clinton have been dominated by issues like “getting tougher on Wall Street” and raising taxes on the rich. But how, exactly, could that help Americans who are unable to make ends meet?
Top 1 Percent progressives purport to have some answers: For one, increasing taxes on the highest earners brings in revenue to spread around. It’s also true too that wealthy people have disproportionate political power. Top 1 Percent progressives think that if they’re made less wealthy, they’ll distort the democratic process less.
In reality, however, increasing taxes on the very wealthiest Americans can't do a whole lot to help those at the bottom. And the right way to reduce the baleful effects of wealth on the political system is through campaign finance reform.