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Political Strategy for a Permanent Democratic Majority

GOP’s Working-Class Branding Project Undermined by Tax Policy Favoring Wealthy

From “Battle over tax hikes muddies the GOP’s post-Trump push to be the party of the working class” by Christina Wilkie at cnbc.com:

WASHINGTON — The looming battle over tax hikes to fund President Joe Biden’s economic recovery bills threatens to undermine the Republican Party’s nascent, post-Trump effort to rebrand itself as the party of the working class.

Over the past decade, the share of Americans with only a high school education who identified as Republicans has risen by more than 10 points, from 34% to 45%, according to NBC News/Wall Street Journal polling.

Many of these voters were initially drawn to the GOP over cultural issues, not financial ones. But Trump injected economic populism into the party platform. In the 2020 election, despite losing the presidency, he won noncollege white men by 42 percentage points, and noncollege white women by 27 points….In the House, Rep. Jim Banks of Indiana , leader of the conservative Republican Study Committee, wrote a memo last month arguing that the only way for the Republican Party to win control of Congress was by “enthusiastically rebranding and reorienting as the Party of the Working Class.”

Wilkie notes that Republicans have joined with Democrats in supporting some legislation that benefits the worlking class, including: massive Covid relief bills, enhanced unemployment benefits; raising the child tax credit; and a tax credit to anyone earning less than the mean hourly wage of $16.50….All these initiatives reflect a party “trying to catch up with the people who are supporting them,” said John Russo, co-editor of the publication Working-Class Perspectives and a visiting scholar at the Kalmanovitz Initiative for Labor and the Working Poor at Georgetown University….“Trump turned it upside down, especially when it comes to deficit spending. The GOP is trying to capture the voters he won over and keep them,” he said.

However, Wilkie explains, “Biden’s economic recovery package now threatens to drive a wedge between Republicans and the working-class voters they’re trying to hold onto, by forcing the GOP to choose between protecting corporate tax cuts or creating more blue-collar jobs….The Biden recovery plan is divided into two massive investment bills: the infrastructure-focused American Jobs Plan, and the American Families Plan, which expands education and child-care aid….The combined price tag for the plans is north of $4 trillion, but Biden intends to avoid ballooning the federal deficit in part by raising taxes on corporations and the very rich to pay for the programs. The chief beneficiaries of the plans will be Americans without a college degree and low-income workers.

Yet, “For Republicans, however, the bills’ prospects begin and end at the tax hikes.” Further,

Four years after passing the biggest tax cut in a generation in 2017, Senate Minority Leader Mitch McConnell said this week that any increase to the tax rates enshrined in the 2017 law would be a red line for Republicans….Calling the cuts among the most significant domestic accomplishments of Trump’s presidency, the Kentucky Republican said, “We’re not going to revisit the 2017 tax bill.”….He accused Democrats of wanting to “raise the corporate rate to the highest in the world,” despite the fact that Biden proposes raising it only to 28%, which is still 7 points lower than the pre-2017 rate of 35%.

Banks and the Republican Study Committee were equally outraged by the proposed tax increases on the wealthy and corporations…..“Biden and Congressional Democrats’ assault on American jobs and American taxpayers is simply unconscionable,” the committee said in a statement on the proposed tax hikes….the 2017 tax cuts didn’t win over many Americans, a reality reflected in a wide array of polls both during and after the bill’s passage in late 2017. But that’s not surprising, given that multiple analyses of the bill’s impacts have found that the biggest beneficiaries of the changes, by far, were the wealthiest Americans and corporations.

….By contrast, the first part of Biden’s package, the American Jobs Plan, appeals directly to noncollege educated voters: Three of every 4 infrastructure jobs created by the plan will require no more than a high school diploma….Biden has referred to the jobs plan as “a blue-collar blueprint to build America,” and it is widely seen as more likely to become law in a Congress where Democrats hold only razor-thin majorities in both chambers.

The second part of Biden’s agenda, the American Families Plan, faces a narrower path to becoming law, and there are competing estimates of how much it would actually cost to greatly expand public education, child-care subsidies and unemployment benefits. Like the infrastructure bill, this, too, relies on making changes to the 2017 tax bill.

Wilkie notes that “not all Republicans agree with McConnell’s iron-clad refusal to revisit the 2017 tax cuts,” and some are calling for more generous benefits for working-class families. But if historical patterns prevail, Republican leaders will prioritize giving the largest tax cuts to the wealthy, while pressing for deep cuts in spending for programs that benefit the working-class. The question is, how many white working-class voters, who are more than 40 percent of the electorate, buy the GOP re-branding in the 2022 midterm elections.

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