I know what you’re probably thinking. Aren’t Democrats already the party of high taxes? Haven’t they always been?
Yes, that’s true but the point of this Vox article is that Democrats no longer have any social welfare goodies to offer because tax cuts have become popular, even among Democrats. Vox calls this the “core contradiction” of the Democratic party. It’s the party of big government but it’s also hesitant to push for big taxes needed to fund big government.
There are two primary reasons why progressives’ prospects for growing the welfare state have darkened.
First (and most straightforwardly), the Democrats are not well-positioned to win full control of the federal government anytime soon. To win a Senate majority in 2026, the party would need to win multiple states that Trump carried by double digits last year. And the 2028 map isn’t that much better. The basic problem is that Democrats have built a coalition that’s heavily concentrated on the coasts and thus, systematically underrepresented in the Senate. To win the robust congressional majorities typically necessary for enacting large social programs, Democrats would likely need to transform their party’s brand.
Second, although Democrats developed grander ambitions for social spending over the past decade, they simultaneously grew more averse to raising taxes on anyone but the super-rich. In the 2010s, when inflation and interest rates were persistently low, the party could paper over this tension with deficit spending. But Biden-era inflation revealed the limits of this strategy.
It wasn’t all that long ago that progressives were mumbling about Modern Monetary Theory. Remember the fad about minting the coin? The problem, of course, was inflation. And sure enough after spending trillions to alleviate the impact of the pandemic-era shutdowns, we saw inflation surge.
And that brings us to where we are now. Republicans control the government, an extension of the Trump tax cuts seems likely and Democrats are left with a rather unpleasant choice between dialing back their agenda to keep taxes low or ramping up their campaign for higher taxes so they can spend, spend, spend.
…while Democrats’ aspirations for social spending had become historically bold, the party’s position on taxes had grown exceptionally timid. In 2016, Hillary Clinton had promised not to raise taxes on any American family earning less than $250,000. Four years later, Biden vowed to spare all households earning less than $400,000 – despite the fact that tax rates on upper middle-class families had fallen during Trump’s first term…
In 2021, Democrats were promising to establish an unprecedentedly large welfare state, while keeping taxes on 98 percent of households historically low.
And of course there’s the debt and the fact that our entitlement programs are running out of money. By the time the next Democratic president is in office, he or she will need to come up with a lot more money just to keep the promises they’ve already made.
Social Security currently pays out more in benefits than it takes in through payroll taxes. For now, the program’s dedicated trust fund fills in the gap. But in 2033, that fund will likely be exhausted, according to government projections. At that point, the government will need to find upward of $414.5 billion in new revenue, each year, to maintain existing Social Security benefits without increasing the deficit.
Given Democrats’ current stance on taxes, the imperative to keep Social Security funded would likely crowd out the rest of the party’s social welfare agenda. Indeed, merely sustaining Americans’ existing retirement benefits would almost certainly require raising taxes on households earning less than $400,000. Maintaining such benefits while also creating new welfare programs — in a context of structurally high deficits and interest rates — would plausibly entail large, broad-based tax increases, the likes of which today’s Democrats scarcely dare to contemplate.
There’s another big problem for Democrats. They are not the party of blue collar workers as they once were. They are quickly becoming the party of white college grads with higher incomes: “In 2024, the highest-earning 5 percent of white voters were more than 10 percentage points more Democratic than America as a whole.” Those are precisely the people you’d need to tax heavily to expand the social safety net, offer reparations, maintain Social Security, etc. But obviously proposing big tax increases on your base is probably going to lead to a lot of unpleasant outcomes for the party. As Vox puts it, “calling for large middle-class tax hikes could well ensure perpetual Republican rule.”
Vox suggests the only hope of convincing Democratic voters to go along with big tax increases is to demonstrate the kind of competence that, unfortunately, is badly lacking in blue states.
So long as blue areas struggle to build a single public toilet for less than $1.7 million — or a high-speed rail line in less than 17 years — it will be hard to persuade ordinary Americans to forfeit a larger chunk of their paychecks to Uncle Sam.
It’s probably the most doomy article about Democrats I’ve even seen at Vox. All of the fundamentals are working against them. All the choices are unpleasant. And there’s no sign of anyone competent enough to make this work anywhere on the horizon. Certainly Gavin Newsom won’t save them, despite his evident desire to run for higher office. His state is the one responsible for both the $1.7 million toilet (in San Francisco, of course) and the botched high speed rail project. The state is also currently broke and facing deficits because Newsom expanded Medical to cover illegal immigrants last year.
That’s precisely the kind of expansion of the safety net Vox wants to see Democrats embrace, but the financial results in California have been a mess. And that’s true despite the fact that California already has one of the highest tax burden’s in the country.
