Tax cuts are the hot new idea for Democrats

WASHINGTON — Tax cuts are becoming the hottest new idea in Democratic politics from coast to coast, as candidates from all parties seek to capitalize on cost-of-living struggles and win back working-class voters.

Subscribe to read this story ad-free

Get unlimited access to ad-free articles and exclusive content.

Senators Cory Booker, D-N.J., and Chris Van Hollen, D-Md., recently launched sweeping tax cut plans. Booker seeks to create a federal tax exemption of up to $75,000 of income for married couples. Van Hollen wants to set that number at $92,000. Both have been presented as potential candidates for the 2028 presidential election.

In California, progressive gubernatorial candidate Katie Porter, a former Democratic congresswoman, is proposing eliminating the income tax on California families earning up to $100,000 a year.

In Georgia, gubernatorial candidate Keisha Lance Bottoms, a former Atlanta mayor and Biden administration official, is campaigning on “eliminating the teacher income tax.”

The trend has sparked a “wonk revolt” uniting policy experts from the center to the left against the new trend, said Zach Moller, senior director of economic policy at the moderate Democratic group Third Way.

He said the divide is part of a “democratic cold war” between those who want to give tax breaks to certain groups and politicians who favor a broad income base.

Critics warn that Democrats cannot plausibly finance a European-style safety net if they continue to push to cut revenue or shrink the tax base.

“There’s only so much revenue you can get from corporations, billionaires and the 1 percent,” Moller said. “Democrats are very unlikely to get enough revenue from this group to do everything they want, whether it’s child care, paid leave, strengthening the child tax credit, or expanding Medicare.”

“Democrats are going to have a math problem ultimately if they go down this path,” he said, adding that it further jeopardizes any hope of reducing the national debt.

The reaction from the left is more intense. They warn that these Democrats are giving in to a Reaganite vision that sees taxes as punishment and thus endangers the liberal project, which relies on tax revenues to finance national priorities.

And some Democrats are rejecting this trend as the upcoming presidential primary approaches, where it is shaping up to be one of several major issues regarding the party’s future.

Rep. Ro Khanna, Democrat of California, a progressive populist eyeing a presidential run in 2028, is setting a milestone against the trend.

“Democrats must deliver a vision for government that delivers health care, education and child care and calls on each of us to fulfill our patriotic duty in rebuilding our communities and our nation,” Khanna told NBC News. “We should argue from FDR’s framework of believing in the role of government to provide essential services to Americans, not Reagan’s framework of believing that government is the problem and that taxes are evil.”

Tré Easton, a former Democratic Senate aide who now oversees policy at the Searchlight Institute, said this trend began when Democrats rushed to embrace President Donald Trump’s popular pitch for “no tax on tips” in the 2024 election.

“It’s kind of taken off. And I think it’s the Democrats who are trying to replicate that by offering things that are supposed to appeal to working-class voters, who we need to win back. And it seems so gimmicky to me on every level,” Easton said.

He called the new trend “extremely problematic” and “myopic,” one that “undermines what was once Democrats’ main argument — that we’re all in this together and therefore we should try to pay for this together to improve people’s lives.” »

“You’re never going to outdo the Republican Party on tax cuts. They’ll always win on that front. It’s in their DNA,” Easton said. “And I think the broader point here is that we shouldn’t think of taxes as a punishment or a burden, right?”

Even in Washington, D.C., mayoral candidate Kenyan McDuffie seeks to exploit anti-tax sentiment, recently asserting that the nation’s capital will not become like New York under his leadership, accusing Mayor Zohran Mamdani of peddling “tax hikes disguised as hope.”

Easton said, speaking generally about the Democratic proposals: “When you start taking people off the tax base, what you’re doing is saying, in effect, no, it’s not our collective responsibility to improve society, to actually invest in our communities and in each other. You’re saying it’s just the responsibility of the really, really super rich people and no one else.”

Asked about the criticism, Van Hollen told NBC News his plan was “very much in line with the liberal project.”

“People who earn a living wage, meaning they earn enough to pay their bills and survive, should be able to keep more of their money. As I said, it’s an important pillar of a tax plan. It’s not the only part of a tax plan. We should also have a wealth tax,” he said, adding that he supports Sen. Bernie Sanders’s, I-Vt., plan to impose a tax on the annual fortune of 5% to the estimated 938 billionaires. in the United States

Booker defended his plan as an attempt to make the Democrats the party of “big ideas.”

“Donald Trump put forward a lot of big ideas. He didn’t implement them, but they resonated in his last election,” he said in a recent interview. “We need big economic ideas that people can immediately hear and think about. »

A Gallup poll found that the share of Americans who say the income taxes they pay are “unfair” rose to 50% in March, up from 35% in 2017.

Asked about her Senate colleagues’ proposals, Sen. Elizabeth Warren, D-Mass., said: “My focus right now is on getting the billionaires to pay their fair share. If the billionaires paid, we would have a lot of money to invest in the things that families need, to help lower costs and make this whole economy work better for those in the middle.”

Vanessa Williamson, a senior fellow at the Urban-Brookings Tax Policy Center and author of “Read My Lips: Why Americans Are Proud To Pay Taxes,” sighed deeply when asked about the tax-cutting trend.

“The decision by prominent Democrats to focus on tax cuts is ill-conceived for a number of reasons,” she said. “I think some Democrats seem to be under the mistaken impression that we live in a Grover Norquist nation. That’s not the case. We never have.”

She said Democrats historically succeeded politically when their leaders, like Franklin Delano Roosevelt and Lyndon Johnson, were outspoken about the importance of taxation in pursuing popular projects like the New Deal and the Great Society.

“It’s a remarkably condescending attitude to take toward the American people,” Williamson said. “How are you going to go to the American people and say, ‘Government is worth it,’ and then say, ‘Don’t worry, you don’t have to pay for it?’ That the democratic system is good, but not so good that it is worth investing your own money in it?