"[W]hile I have no sympathy with the idea that making the lower upper class return to Clinton-era tax rates is too hard on them, I think you could have some sympathy with the idea that your person earning $250,000 shouldn’t pay the same marginal rate as much as someone making $1.25 million or $6.25 million. Why not add additional marginal brackets?" ( http://thinkprogress.org/yglesias/2009/03/10/192079/mobilizi... )
I found this post via an old bookmark to some insightful commentary on it by Nate Silver: http://www.fivethirtyeight.com/2009/03/missing-1000000-tax-b...
The problem is, while these "new rich"--the "petty bourgeoisie," as Marx called them--are all too eager to declare themselves "not rich" for tax purposes, they are just as eager to see themselves as being like the rich. They see themselves as the truly productive class, the ones who really keep the economy going. It's ultimately for ideological reasons, moreso than pragmatic ones, that they end up opposed to redistribution (even in the face of increasingly sickening, 1920s-esque levels of inequality).
Recently, my dentist and dental hygienist tried to strike up a conversation with me after a routine cleaning. My dentist was just so dismayed that unemployment benefits were still being extended when the recession had "ended" years ago (which is true only in terms of GDP growth, not in terms of the effects on employment and income). But in response, the hygienist--who probably makes one-third what the dentist does, for doing three times the work--upped the ante, approvingly quoting her fiance's suggestion that "the unemployed shouldn't be able to vote until they find a job." Of course, the dentist was delighted by this proposal!
The point is, progressives have plenty to offer the petty bourgeoisie: more customers for their small businesses, via boosting aggregate demand; a better educated and healthier workforce "below" them, via treating education and health care as public goods--but what we could never offer is the feeling of saintly victimhood they get from libertarianism. Not only do they nurture this spirituality in themselves, they evangelize it to every promising young worker (e.g., the hygienist) who might someday join the fold.