Redistributive justice with Mamdani and Polanski

‘Eat the rich’

« Quand les pauvres n'auront plus rien à manger, ils mangeront les riches! » 

“When the poor shall have nothing more to eat, they will eat the rich” 

Jean Jacques Rousseau 

The phrase ‘eat the rich’, originally popularised during the French Revolution, has once again begun to echo around socialist political circles. Far from being a mere TikTok trend of the performative left, it is increasingly coming into the mainstream as a viable policy initiative.

Indeed, champions of this view, such as Zohran Mamdani in New York and Zack Polanski of the Green Party of England and Wales, provide compelling arguments that taxing the super-wealthy is not only morally legitimate, but also instrumentally effective. It is this policy point that has earned them extraordinary levels of support in their respective political projects, with Mamdani’s successful mayoral bid against billionaire-backed Andrew Cuomo, and Polanski’s Greens’ unprecedented membership growth. 

The commitment to a wealth tax was the flagship policy that secured Mamdani the title of Mayor of New York. His campaign presented the wealth tax as the golden ticket for improved public services such as universal childcare, free bus rides and rent freezes, all of which are salient issues for the average New Yorker.

The effects of this are highlighted in one poll which indicates that 62% of New York residents support raising the corporate tax rate for businesses making more than $5 million in profit from 7.25% to 11.5%

 This increase in corporate tax proposed by Mamdani would also be accompanied by a 2% surtax on all incomes over 1 million. Collectively, Mamdani expects these to generate $4 billion and $5 billion per annum respectively, constituting a significant increase to the budget of the mayoral office. 

On this side of the pond, Zack Polanski has also made taxing billionaires a central feature of his self-described ‘eco-populist’ agenda. Having won 84% of the vote to become Green Party leader, Polanski has used his new platform to call for a wealth tax on the richest 1%, a closer alignment of capital gains tax with income tax and the imposition of a National Insurance-style contribution on investment income.

Polanski has cited similar justifications as Mamdani, emphasising the alleviatory effect that an approximate £33 billion budget increase could have on public services such as universal healthcare, SEND education, rural public transport and climate infrastructure.

The moral justification of a wealth tax grounds itself in the Rawlsian tradition of egalitarian distributive justice. The Rawlsian theory defends a more equitable distribution of wealth as a means of ensuring equality of opportunity among citizens, which equates to equal access to education, healthcare and other vital public services. Concentrated extreme wealth can also undermine democracy in a capitalist society by creating disproportionate political power. In the New York mayoral race, for example, it is that reported 26 billionaires/billionaire family members donated a cumulative total of more than $22 million to Mamdani’s opponents, mainly independent candidate Andrew Cuomo.

So, what has caused this sudden call for a wealth tax in the US and the UK? Unsurprisingly, the answer to this question is the dramatic rise in wealth inequality. In the UK approximately 14.5 million people, or 22% of the population, live in poverty, while the richest 1% of Britons now own more wealth than the bottom 70%

Another Oxfam report states that the richest 1% of households in the US have accumulated 1,000 times more wealth than the poorest 20% over the last 35 years. It is this alarming trend, which shows no sign of slowing down, that underlines the urgency of wealth tax reforms. Furthermore, when considering effective tax rates (including unearned income, e.g. stock dividends), Oxfam reports that UK billionaires pay “effective tax rates close to 0.3% of their wealth”.

This indication of a regressive system of effective tax has led to a rise in popularity of a wealth tax in both the UK and the USA, with 75% of Brits and 67% of Americans supporting the measure.  

The main criticisms of a wealth tax can be categorised into two groups. The first are those which cite moral objections, usually of the libertarian kind, which label taxes as a form of theft. They are commonly quick to emphasise the hard work and innovation of the rich in amassing their wealth – however many, including the author of this article, would call this an overstatement of individual responsibility. Even if we find reason in this approach, it is worth highlighting the utilitarian argument that a wealth tax on the super-rich could greatly improve the lives of millions of people, many of whom are impoverished. The second criticism comes from those who doubt the instrumental effectiveness of a wealth tax in achieving the goal of improving public services. The most common rebuttal of those in opposition claim that a wealth tax will result in a mass emigration of billionaires, lowering investment and damaging the economy.

 Indeed, around 30 news items a day last year focused on the prospect of a wealth exodus . There is limited empirical evidence for such a phenomenon; In Scandinavia only 0.01% of the top 0.5% relocated after the introduction of wealth taxes, and, in the UK, only 0.02% emigrated after the changes to ‘non-dom’ rules in 2017.

 Even giving weight to these concerns, other supporting measures such as an exit tax have been proposed as viable solutions. A final noteworthy criticism is the administrative difficulty of taxing intangible assets. Although it is true that this would pose a serious challenge for the incumbent government, it would be the act of a defeatist to consider this an insurmountable task considering the potential benefit that would be brought about. 

In conclusion, despite fearmongering by partisan news outlets, both Mamdani and Polanski have gained a massive political following by highlighting the enormous fundraising opportunity that a wealth tax represents. 

Detractors of such a measure often rely on empirically unfounded claims of a wealth exodus and exaggerated administrative costs. Faced with the current, arguably indefensible, levels of wealth inequality, is it now time for the UK and the USA to follow in the footsteps of countries such as Norway, Switzerland and Spain and implement a wealth tax on the super-rich.