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.
Once again, Democrats are doomed part # 12.
I’ve been involved in Democratic politics as a strategist and campaigner since 1972. You were a ray of light after the 2000 election. I bought your book and read it twice. What you wrote has come true, yet you seem upset about it.
During the bad old 1980’s, I remember us getting buried in high growth suburban areas. I case you forgot in the 1984 Presidential election, Ronald Reagan got a higher % of the vote in Connecticut than he did in Alabama. The real story is how Clinton was able to move northern and western suburbanites into the Democratic Party in 1992 & 1996. Then, how Al Gore & John Kerry kept those gains, and how Barrack Obama expanded them to most of the rest of the country and How Hillary Clinton & Joe Biden expanded this into the deep South and Sunbelt. Dobbs, which you rarely mention, hyper accelerated this trend.
The “populism” of trump is a long-term losing strategy. The republicans are in much the same position as William Jennings Bryan was at the turn of the 20th century. Bryan was the hero of rural voters in the west and plains states and promised what seemed like radical solutions to problems out of what was then the mainstream. Bryan scared the majority in the population centers which caused the Democrats to go to minority status for the next 36 years. Democrats started to take the big cities in 1928 and have never looked back. As you well know change brings some backlash. Democrats may not be able to carry Elliot County Kentucky, or Belmont County Ohio, but they can expand margins in Phoenix, Houston, Atlanta and Charlotte.
Every policy pushed by Democrats has helped isolated rural white rural populations from Obamacare, to child tax credits and caps on medical costs. All we can do is sell what we have done and push for more things that help rural Americans.
I would ask you what have the republicans done for rural white people. Please give us specific examples of what Democrats have pushed that are culturally bad for rural voters. We need more of the optimism of a Simon Rosenberg and a Ruy Texiera circa 2006!
Tom Chumley, you seem to have conflated “rural” with “working class.” Teixeira did not use the word “rural” even once in his discussion of the Democrats’ difficulties with working class voters, yet you used it five times. You did not use the term “working class” once, while Teixeira used it nine times. Rural is a location, working class is a social class. They overlap like a Venn diagram but they are not the same thing.
You are correct. I was thinking more on a county level than demographic level. The rural counties far from big cities tend to match working class stats rather closely.
My problem with Texiera is not his accuracy or information. As usual he is well researched and the details he provides are important. Where he departs from this is saying that over and over again is that Democrats are campaigning on issues that MAGA republicans say Democrats are doing without providing any evidence. republicans have been throwing false narratives at Democrats for 50 years. If the message is how to attack the false narratives aggressively, I’m all for that. Teixeira seem to accept these republican stereotypes as true.
If I didn’t know anything about what has happened in the last three cycles and only read Ruy’s columns, I would think that the Democrats had lost everything and the few victories Democrats had were only due the republican mistakes.
I could compare his columns this year to someone writing an analysis of the 1972 Presidential election and gushing on and on about how well George McGovern did in university counties which were republican voting only a few years previous. That would be a fine article to write, but you have to mention the fact that McGovern only carried about 120 odd counties and lost 49 states, which was far more important.
The good things Democrats have done electorally since 2017 have far outweighed the negatives. A little more of the whole picture would be appreciated.