Republicans Should Listen to Trump on Taxing the Wealthy
As I told you earlier this week, Donald Trump proposed raising taxes on “the hedge fund guys,” which is absolutely something that needs to happen. Brian Beutler at the New Republic says Trump may be rewriting the Republican playbook for everyone:
For almost any candidate, promising to reduce taxes on rich people is the price of admission into the Republican primary. Trump, by contrast, is poised not only to survive this apostasy, but to singe any of the more orthodox rivals who challenge him.
Senator Marco Rubio’s tax plan represents the most pointed contrast to Trump’s middle-class populism. Rubio proposes not just to lower the top marginal income tax rate, but to completely zero out capital gains taxes. To escape scrutiny for offering such a huge sop to the wealthy, Rubio plans to fall back on his origin story—as the son of a bartender who worked at a hotel financed by investors, Rubio can elide the typical criticisms of trickle-down economics, by claiming to be a direct beneficiary of it. This might be an effective diversion against a Democratic politician promising to increase people’s taxes, but against a rapacious developer like Trump, it falls completely flat. Trump would love nothing more than for a career elected official like Rubio to lecture him about the impact tax rates have on investment and growth. Trump has managed to survive in the business world at a number of different capital gains tax rates, whereas Rubio has struggled to stay afloat, and racked up high levels of credit card debt, in the working world.
A lot of the discussion circling Trump is baseless clickbait, but this is a real point that will have real consequences for Republicans. We’re now seeing headlines like “Donald Trump Says He Wants to Raise Taxes on Himself” spread across the internet. And this is important for a lot of reasons.
You could argue that the insanity of the Tea Party was a logical extension of the ridiculous pledge that Grover Norquist required Republican candidates to sign promising that they’d never raise taxes. When a party judges their candidate purity on an unrealistic scale like this—taxes = failure—that party is eventually going to welcome all kinds of fringe concepts into its mainstream.
It’s clear now to almost everyone from the Seattle Times editorial board to, well, Donald Trump that America needs revenue. And you can close all the tax loopholes you want, but at some point you’ve got to start thinking about raising taxes. And the obvious target for those taxes should be the top one percent, which has been enjoying low taxes for decades.
The Republican playbook insists that if you lower taxes on the wealthy, that saved money should trickle down to the very poor. (It’s fitting that Beutler chose Marco Rubio as the oppositional axis to Trump, because Rubio is about as classic a trickle-downer as they come. As I’ve pointed out, he delivers the same old trickle down message in a relatively young and relatively fresh package.) But that trickle-down theory obviously hasn’t worked out, and even though it’s apparent to everyone that it hasn’t worked out, Republicans have painted themselves into a corner. They can’t propose raising taxes without enraging the base that they’ve cultivated.
Or can they? What Donald Trump provides for Republicans is a much-needed way forward. Now that the unquestionable frontrunner in the Republican presidential campaign is openly admitting—through example, no less—that America should raise taxes on the wealthy, he’s offering an opportunity for Republicans to shake off the Norquist trap and come to peace with the idea of taxation. Republicans have been eager to parrot Trump on issues ranging from immigration to China to Iran, but they’re surprisingly resistant to embrace Trump’s proposed taxes on the wealthy. The shame of it is, this is the one case where Trump is the most reasonable candidate in the field.