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.
One point to shoehorn into your point, Mike: there is now a growing base of suburban support for Dems in Texas. I know there’s anecdotal evidence in the other big southern states to agree with that. And I’m doubtful of there being much to corroborate this in the smaller ones.
That’s one of the aspects I wanted to look at beyond my own home state of Texas.
You’re definitely right about the WD40-class of Dems being a diminishing breed in many areas. I was really surprised, though, to see how less of a problem it was in states like MS and AL in particular compared to TX. In looking at the Texas vote by precinct, I think the reality is more accurately stated as the pool of Dem support is diminishing as the rural areas get older. There are still similar pockets of support that exist in these areas for other candidates higher than State Rep. But the vote share in Dem areas has generally decreased as other areas around them have gotten more and more Republican. So I think that several of these seats – although definitely fewer – may be survived by other Dems. But they’ll have GOP State Senators and GOP Members of Congress.
Then again, there are some pretty creative tools for redistricting available these days 😉
I can comment on Greg’s map at least in so far as Texas is concerned. Of those State House of Representative Districts are concerned, the Democratic districts fall into one of three categories: 1) minority held districts; 2) urban districts; and 3) rural Democratic districts.
Category one and two are growing. Category three is a vanishing species. They’re called WD-40’s om Texas — white Democrats over 40. People like Jim McReynolds (Lufkin), Chuck Hopson) Jacksonville), and Stephen Frost (Atlanta, though not over 40), etc. In all likelihood, these guys (with the possible exception of Hopson) can hold their seats until they retire. But then, the Republicans will take those seats.
But all the growth in Texas in Democratic State House seats is coming in urban areas, and to a lesser degree in minority districts. And if the Republicans control the redistricting process in Texas again in 2011, even these white rural Democrats will find themselves with tougher fights than they presently have.
Interesting timing of your post, Ed. I just wrapped up a minor mapping project that shows that Democratic candidates for State Rep. in the south aren’t quite as dead as conventional wisdom leads us to believe. It’s a pretty remarkable view of the remaining strength the party has in the south after 30 or so years of conservative activists driving religious voters over to the GOP.
http://www.gregsopinion.com/archives/009358.html
But then again, I’m sure this is nothing new to you 😉
Blanche should do fine unless there’s some broader tilt in public opinion heading into 2010.