After President Donald Trump told reporters Wednesday that he opposed increasing taxes on the rich to pay for the rest of his policy agenda, Democrats could breathe a sigh of relief. The idea would be “very disruptive,” Trump said, echoing House Speaker Mike Johnson, R-La., who told Fox News earlier that day, “I’m not in favor of raising the tax rates because our party is the group that stands against that traditionally.”
Taxing the rich is a policy typically associated with Democrats. Since most voters think the wealthy don’t pay enough in taxes, that works to the party’s advantage. But Washington’s highest-ranking Republicans were reportedly increasingly comfortable with the notion, as well.
The possibility of a tax increase on the wealthy has percolated in Washington for weeks.
Had they followed through with the idea, it could have scrambled the image of both parties. “This guts the AOC-Bernie ‘oligarchy tour,’” former Trump adviser Stephen Bannon said in predicting what would happen if Republicans supported higher taxes for the wealthy. He was referring to the wildly successful events Sen. Bernie Sanders, I-Vt., and Rep. Alexandria Ocasio-Cortez, D-N.Y., have been holding around the country in recent weeks. “Politically, it’s game, set, match.” But unfortunately for Bannon, as Johnson said, the Republican Party traditionally cuts taxes — and especially cuts taxes for the rich.
The possibility of a tax increase on the wealthy has percolated in Washington for weeks, supported outside the Beltway by Bannon and others. The Washington Post, citing “two administration officials and three other people briefed on the matter,” reported Tuesday that Vice President JD Vance and budget director Russell Vought “expressed openness to the idea.”
According to NBC News, GOP lawmakers had considered letting the rate for the top tax bracket return to 39.6% (from 37%) when the 2017 tax cuts expire at the end of the year or creating a higher bracket for households making more than a million dollars.
The mere consideration of this heresy reflects two major problems with Trump’s legislative agenda: one numerical and one political. The GOP wants to extend the 2017 tax cuts, which would cost $4.6 trillion, and add hundreds of billions of dollars in spending on the border and the military. To assuage the party’s most zealous fiscal hawks, Johnson and Senate Majority Leader John Thune, R-S.D., say they’re looking at $1.5 trillion in spending cuts.
But because Trump has kept Social Security and Medicare off the table — for this budget at least — the numbers don’t work without hundreds of billions in cuts to SNAP and Medicaid. Along with the effects of the tariffs, the Center on Budget and Policy Priorities estimates that Trump’s agenda will reduce the poorest Americans’ incomes by 10%, while the top 1% of Americans get an additional $25,500 in income.
Maybe, one day, Bannon and his ilk will get their wish, and the faux populism of the MAGA-era GOP will become real.
That leads us to the political problem. The 2017 tax cuts were unpopular from the moment they were passed, so much so that Republicans largely stopped touting them ahead of their 2018 midterm shellacking. Cutting programs like Medicaid to pay for an extension of those will likely be even less popular (and in a new Fox News poll, just 38% of voters approve of Trump’s job performance on taxes). Just last week, a dozen moderate Republicans — that is, far more than his two-vote margin in the chamber — warned Johnson against cutting the health care program too deeply.
If past is prologue, those moderates will cave, as they have throughout Trump’s second term. But Republicans will have to face the 2026 midterms having voted to cut Medicaid and food aid to reduce the taxes for millionaires.
Increasing income taxes on the richest Americans wouldn’t do much to close the gap between them and the rest of us; for that job you’d need a wealth tax or a higher capital gains tax. But it would address Republicans’ two problems, shrinking the necessary spending cuts and rebutting the widespread image of the party as the handmaiden of the wealthy. With more low-income voters backing Republicans, trashing this bit of GOP orthodoxy would come at a perfect moment to cut further into a traditionally Democratic cohort.
Bannon is right that making the wealthy pay more in taxes “is a no-brainer.” But if hiking taxes on the rich is a no-brainer, cutting taxes for the rich is the GOP’s primary reflex. No other policy so closely binds the party; no other goal leads billionaire donors to open their checkbooks again and again. Ronald Reagan brought the myth of “trickle down” tax cuts to the White House. George W. Bush pushed through two tax cut packages tilted to the wealthy. And in Trump’s chaotic first term, the 2017 tax cuts were the only major policy that united Republicans.
Maybe, one day, Bannon and his ilk will get their wish, and the faux populism of the MAGA-era GOP will become real. But this GOP remains in the grips of the donors and the oligarchs, even as Americans are as furious as ever about our unequal society. Those Democrats, like Sanders and Ocasio-Cortez, who recognize this truth are best positioned to capitalize on it.
