Democratic tax hopes begin to shrink. They need to get even smaller
Congressional Democrats had big dreams of remaking the federal government, and the tax system that funds it. But a funny thing happened on the way to the liberal utopia: self-interest got in the way. As the Wall Street Journal report:
…lawmakers have acknowledged they may need to pare their ambitions or borrow more.
The result could be a far cry from the talk of wealth taxes and repealing the 2017 GOP tax law that dominated the 2020 presidential primary campaign and weren’t part of Mr. Biden’s plans. Democrats’ slim congressional margins mean they need almost every lawmaker on board. Centrists balk at the current price tag and the taxes proposed to help pay for it, frustrating progressives. Republicans are united against higher taxes.
Frustrating progressives is a feature, not a bug. The push to tax everything not nailed down (and then tax the nails) was bound to run into opposition within the Democratic caucus. Yes, price tags and particular line items are the stated reasons given for bucking the progressive line.
But the more pragmatic reason is re-election politics. Passing a massive tax hike before a mid-term congressional election should remind Democrats of the last time they did something like it: Obamacare. That piece of legislation was a debacle for Democrats in the 2010 mid-term, when they lost 63 seats in the House, and their majority, and seven Senate seats in a Republican wave.
Pass a huge tax increase now…and the 2022 wave could start building on the horizon.