Republicans have both an arithmetic and a messaging problem as they try to enact Donald Trump’s second-term agenda via a giant budget-reconciliation bill. The former involves finding a way to pay for the $4 trillion-plus tax cuts Trump has demanded, along with a half-trillion or so in border security and defense spending increases. And the latter flows from the necessity of hammering popular federal programs (especially Medicaid) to avoid boosting budget deficits that are already out of control from the perspective of conservatives. This sets up Democrats nicely to deplore the whole mess as a matter of “cutting Medicaid to pay for tax cuts for Trump’s billionaire friends,” a very effective message that has vulnerable House Republicans worried.
To interrupt this line of attack while making the overall agenda slightly more affordable, anonymous White House sources lofted a trial balloon earlier this month via a Fox News report:
“White House aides are quietly floating a proposal within the House GOP that would raise the tax rate for people making more than $1 million to 40%, two sources familiar with discussions told Fox News Digital, to offset the cost of eliminating taxes on overtime pay, tipped wages, and retirees’ Social Security.
“The sources stressed the discussions were only preliminary, and the plan is one of many being talked about as congressional Republicans work on advancing President Donald Trump’s agenda via the budget reconciliation process.
“Trump and his White House have not yet taken a position on the matter, but the idea is being looked at by his aides and staff on Capitol Hill.”
The idea wasn’t as shocking as it might seem. Trump’s 2017 tax cuts reduced the top income-tax rate from 39.6 percent to 37 percent, so just letting that provision expire would accomplish the near-40 percent rate without disturbing other goodies for rich people in the 2017 bill like corporate-tax cuts, estate-tax cuts, and a relaxed alternative minimum tax for both individuals and corporations. One House Republican, Pennsylvania’s Dan Meuser, suggested resetting the top individual tax rate at 38.6 percent, still a reduction from pre-2017 levels but a “tax increase on the rich” as compared to current policies.
Crafty as this approach might have been as a way of boosting claims that Trump had aligned the GOP with middle-class voters (the intended beneficiaries of his recent tax-cut proposals) rather than the very rich, the idea of backing any tax increase on the allegedly super-productive job creators at the top of the economic pyramid struck many Republicans as the worst imaginable heresy. You could plausibly argue that total opposition to higher taxes, or even to progressive taxes, was the holy grail for the party, more foundational than any other principle and one of the remaining links between pre-Trump and MAGA conservatism. At the very idea of fuzzing up the tax-cut gospel, old GOP warhorses like Newt Gingrich and Americans for Tax Reform’s Grover Norquist arose from their political rest homes to shout: unclean! Gingrich called it the worst potential betrayal of the Cause since George H.W. Bush cut a bipartisan deficit-reduction deal in 1990 that included a tax increase.
As it happens, it was all a mirage. In virtual unison, both Trump and House Speaker Mike Johnson have said a high-end tax cut won’t happen this year, as Politico reports:
“President Donald Trump and House Speaker Mike Johnson on Wednesday came out against a tax hike on the wealthiest Americans — likely putting the nail in the coffin of the idea.
“Trump told reporters in the Oval Office that he thought the idea would be ‘very disruptive’ because it would prompt wealthy people to leave the country. …
“Johnson separately knocked the idea earlier in the day, saying that he is ‘not in favor of raising the tax rates because our party is the group that stands against that traditionally.’”
Trump’s real fear may be that wealthy people would leave the GOP rather than the country. Many are already upset about Trump’s 19th-century protectionist tariff agenda and its effects on the investor class. Subordinating the tax-cut gospel to other MAGA goals might push some of them over the edge. As for Johnson, the Speaker is having to cope with the eternal grumbling of the House Freedom Caucus, where domestic budget cuts are considered a delightful thing in itself and the idea of boosting anyone’s taxes to succor the parasites receiving Medicaid benefits is horrifying.
If Trump’s “big, beautiful” reconciliation bill runs into trouble or if Democrats set the table for a big midterm comeback wielding the “cutting Medicaid to give billionaires a tax break” message, squashing the symbolic gesture of a small boost in federal income-tax rates for the wealthy may be viewed in retrospect as a lost opportunity for the GOP. For the time being, that party’s bond with America’s oligarchs and their would-be imitators stands intact.
phatcat — thanks for the statistical analysis. That kind of work is beyond my abilities. I intend to savor the salt of a Kerry victory long after November 2.
KerryWillWin — thanks for raising the obvious question. You do a better job of supporting my suspicious question, which centered on the strangeness of undecideds breaking for Kery in New Hampshire but not elsewhere.
Matt: If undecideds are supposedly breaking to Bush at 5:1, how come Kerry’s lead is GROWING there this week after last week it was declared a tossup.
Take the undecided voter issue with several heaping handfuls of salt. The report makes the case that undecided voters in NH (7.9% of the sample) are leaning heavily Bush, and that the Bush campaign should be heartened that this is really a close race.
Not only does this not pass the common sense test of the Incumbent Rule, it doesn’t pass the survey analysis integrity test. If 7.9% of the respondents are undecided voters, that translates to an undecided sample size of 36. That’s an extremely small sample size, and prone to ridiculous levels of sampling error (+/- 16). Strangely, the report mentions strong Bush approval ratings among undecideds, but doesn’t publish the actual number. In any case, if Bush polls a 60% approval rating, all we know is that his actual approval rating is somewhere between 44% and 76%, which is hardly enlightening.
With sample sizes this small, drill downs become nonsensical and I’m very surprised they tried to use the undecideds to make a case that Bush has hope in this poll. If anything, the poll is even worse than it appears for Bush, since the sample overrepresented Republicans by 5 points (unless the results were weighted, but they make no mention of it). If the results were weighted to reflect actual party ID patterns, Bush would be down even more.
I agree with Green Dems assessment also. I think Kerry republicans will get the ball over the net for our guy on Nov. 2. The dynamics of the race haven’t changed that much for several months despite poll gyrations: Democrats are highly motivated and they are all in Kerry’s court. Republicans are split. Christian conservatives and rural republicans will vote for Bush come hell or high water, but common sense republicans will split three ways: 1) hold their noses and vote Bush, 2) hold their noses and vote Kerry, or 3) stay home. Factor into this mix the liklihood that first time voters and independents are trending to Kerry, and you have a Kerry win. Actually, I think the only unanswered question at this point is – will it be a Kerry squeaker, or a solid Kerry win. The proof of this can clearly be seen watching Bush yesterday begging his base to get out and vote.
Clinton showed the way, that Democrats who seek to represent Middle Class Americans are the ones who get a chance to help lesser Americans.
We didn’t invent the DLC merely for the hell of it. You have to plow that middle ground to win.
I therefore agree with Green Democrat’s assessment about the chance for new alliances. Assuming a Kerry victory, the Republican party implodes. While success has a thousand fathers, failure is a bastard, and everyone will be looking for THAT baby’s daddy.
Meanwhile, the Repubs who are annoyed at the rightwing freakazoids will clamor to Arnold, McCain, and Rudy to retake the party for 08.
Need to drill down in the New Hampshire poll. Undecided voters are breaking for Bush by a ratio of 5 to 1. Is the undecided vote breaking to Bush in any other state?
Kerry’s strength in libertarian-leaning New Hampshire suggests (not surprisingly) that more fiscally conservative and culturally laissez faire Republicans may be trending Dem. This shouldn’t be surprising to anyone who has been paying attention, of course. This is not your father’s Republican Party anymore. The GOP of limited government, individual liberty, and personal resposnibility is finished, replaced by a big government, fiscally irresponsible Christian conservatism at home and a belligerent and messianic interventionism abroad.
I suspect that collaboration between Democrats and moderate libertarians could prove enduring, but I worry that the so-called war on terror combined with the GOP’s new love of populism could put white working class voters solidly in their column for a generation, and draw in enough Hispanics with such an agenda to make it a lock. Although, with Kerry doing so well among independents (and apparently now new voters) that might just be paranoia…
Is this the same SurveyUSA that has a 22 point lead for Bush in Tennessee? I’m not sure I trust that outfit. I think Rasmussen’s Florida Bush trend makes more sense–steadily dropping from a high of a little over fifty and flatlining at 47 or so. (Or about where he was six weeks ago.)