Participants seen spelling out #TaxTheRich at the New York Public Library on March 4, 2021 in Manhattan. (Photo: Erik McGregor/LightRocket via Getty Images)

Taxing the Rich Requires More Than Policy

The Left is finally waking to the power of ballot initiatives as tools to advance egalitarian and redistributive policy.

With numerous initiative campaigns around the country raising minimum wages, protecting abortion rights, and in the case of Massachusetts's Fair Share Amendment, taxing the rich to fund public services, the Left is finally waking to the power of ballot initiatives as tools to advance egalitarian and redistributive policy. Where legislators are either too timid or too compromised by corporate interests and wealthy donors, voters tend to back progressive policy, even voters who tend not to choose anyone with a D next to their name. Floridians in 2020 and Arizonans in 2016 both went for Trump and increased the minimum wage. Running ballot initiatives offers a path for the Left to organize around working-class demands without getting sucked into the depressing vortex of Democratic Party machinery and the partisan culture war.

The more impact an initiative has in rebalancing resources and power, the more likely it is to face the coordinated efforts of the state legislature, judiciary, and Chamber of Commerce.

As a report recently published by the Center for Work & Democracy at Arizona State University shows, egalitarian initiatives pass at a 60% clip and redistributive ones pass at an astounding 75% rate. With results like these, many on the Left are increasingly attracted to the initiative process as a tactical path forward. Unfortunately, this interest has been roused at a moment when the initiative process is under concerted attack from the Right. By increasing the number of petition signatures needed, making the signature-gathering process stricter, or otherwise raising the threshold for making the ballot, many states are trying to clamp down on citizen's initiatives. In many places, the initiative process is approaching Sisyphean levels of difficulty--irresistible as a means of directly pushing a progressive agenda but so bogged down by rule changes and oversight by hostile bureaucracies as to ultimately prove impossible.

The example of Arizona is instructive here. Arizona is in numerous ways a bellwether state. From regressive immigration policy to school choice, Arizonans seem cursed to preview nationwide political developments in our own perverse laboratory of democracy.

Such is the case with 2020's Proposition 208, an initiative to fund direly under-resourced schools by taxing the rich. The measure followed years of organizing work that began with the historic 2018 Arizona teachers strike, part of the national "Red for Ed" movement. Prop 208 was everything the Left could want from a ballot initiative: a tax on wealthy individuals that would go to public schools, backed by one of the largest and best organized labor upsurges in recent memory. And it was popular. Even in a pandemic year, when the typical ground game for this kind of campaign was impossible, Prop 208 passed by a safe margin. At the same time, California voters rejected a very similar measure in Prop 15. Against the caricature of the state as a libertarian bastion, Arizona was ready to tax the rich.

Despite its promise--or perhaps because of it--Prop 208 didn't last long. The year after voters approved 208, the state legislature dropped down tax brackets to nullify its effects. The year after that, the State Supreme Court declared the initiative unconstitutional.

The effects of these developments have been politically devastating. Rather than being enraged at the flouting of democracy at the state capitol, Arizonans have greeted the gutting of Prop 208 with resignation and demobilization. After the high water mark in 2018, teachers' public image suffered during the Covid-19 pandemic, and now the signature accomplishment of their years of knocking doors has been erased. In most parts of the country with an initiative process, ballot initiatives offer a bright spot in an otherwise depressing political vista; the same is true in Arizona, where debt relief and in-state tuition for DACA students prevailed this November. But the Grand Canyon state also offers a cautionary tale for any campaign that seeks to redistribute money and resources from the one percent to the majority.

The rich, many will be unsurprised to hear, have better tax lawyers than most. They can spend money on the front end to stifle redistributive efforts (mostly in the form of television ads and lawsuits against initiative campaigns, as they can almost never marshal ground games), but they can also spend on the back end to chip away at or, in the case of Prop 208, completely gut any tax policy they don't like. They are well-organized, they have the necessary connections, and they won't stop until they get what they want. David does indeed sometimes win, as Marshall Ganz has reminded us, but it's a lot harder when he plays by Goliath's rules--and Goliath doesn't mess around when you come for his money.

Recently, Massachusetts passed the Fair Share Amendment, a remarkably similar initiative to Arizona's Prop 208. It creates a 4% tax on annual income over $1 million to fund public education, transportation, and infrastructure repair. As in Arizona, the initiative was backed solidly by organized labor, and it passed with precisely the same majority of 52%. As also with Prop 208, the opposition had a difficult time messaging, as most Massachusetts residents do not earn over $1 million a year. The Massachusetts Teachers Association is right to celebrate the victory as a "reason for profound hope," as the Arizona Education Association did with Prop 208.

But the lesson from Arizona is that the true victory will be in defending the Fair Share Amendment, not just in winning it. Strip away the partisan identifications and voters will overwhelmingly choose to redistribute wealth. But the often confusing and veiled machinations of state legislatures can swiftly undermine such choices, unless there is sustained pressure on legislators.

Ballot initiatives can pass policies that politicians can't or won't. But on their own, they are no silver bullet. The more impact an initiative has in rebalancing resources and power, the more likely it is to face the coordinated efforts of the state legislature, judiciary, and Chamber of Commerce. Initiative campaigns that propose redistributing wealth must therefore be prepared to defend their policy before, during, and after it wins at the ballot. For the unions and community organizations that backed the Fair Share Amendment, then, the real victory will be in getting the vote to stick, and that will require returning to the roots of organizing: strategic, social disruption that makes leaving the Fair Share Amendment alone the more attractive option to the powers that be.

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