Pelosi angers left by proposing supermajority requirement for raising income taxes on the middle class

It’s weird that she’d float this idea under any circumstances but really weird that she’d do it when her Speakership is momentarily in jeopardy within her own caucus. Why hand the rebels a weapon they can use to try to rally lefties against her?

As one of their first acts in the majority, Democrats hope to undo a Republican rule that makes it difficult for the House to vote to raise anyone’s taxes. But the solution Democratic leaders are advancing has already hit opposition from some liberal lawmakers and groups — potentially foreshadowing battles to come as the new House Democratic majority tries to settle on an economic agenda.

The GOP rule requires a three-fifths supermajority vote in the House to approve any income tax increase. Democratic leaders would replace it with a rule requiring a supermajority vote to approve tax increases for most taxpayers — but only a simple majority vote to raise taxes for the wealthiest 20 percent or for corporations.

Progressives emphasize soaking the rich whenever they’re asked how they’ll pay for their agenda, for sound electoral reasons, but they know there’s only so much dough that can be confiscated from the upper class. When you’re kicking around numbers like $32 trillion for socialized medicine, your class enemies simply aren’t equal to the enormous task. The middle class will need to pony up — and yet here’s Pelosi, before the Speakership is even in hand, attempting to stop her caucus from reaching for those wallets. Philip Klein is amazed:

The reality is that liberals have sweeping legislative ambitions aimed at transforming America, including free healthcare, free college, free child care, a federal job guarantee, paid leave, and so on. All of these proposals would cost an extraordinary amount of money, and there is simply no way to get them going without broad-based middle-class tax hikes, deficit spending, or some combination of the two. Requiring a three-fifths majority on tax increases on those earning less than 80 percent would effectively eliminate the ability to raise the kind of revenue needed to even make a semblance of an argument that new legislation is “reasonably” paid for.

That’s the other bizarre wrinkle here — Pelosi is *also* vowing that she’ll abide by Republican “paygo” rules, in which new government spending has to be paid for by cuts in other areas or tax hikes. No borrowing! Nancy’s not going to hand the left a credit card and let them go Christmas shopping. They’ll have to come up with the money up front — but her rule blocking income tax hikes on the middle class would deprive them of their richest source of potential revenue.

Lefty groups are incensed:

There are ways Democrats could try to skirt the rule. Obviously, they could target a different type of tax instead — hiking payroll taxes instead of income taxes, for instance. Or, instead of raising income tax rates to pay for programs like Medicare For All, they could simply eliminate some middle-class deductions. Imagine how popular Democrats would be with their new suburban base if those voters suddenly saw their mortgage-interest deduction disappear. If worse came to worst, they could always vote in the House to waive the rule and raise income taxes after all. But various liberals have noted that, from a progressive standpoint, the message here is terrible. “All this does is affirm Republicans’ world view that taxation is among the most vicious evils the government can force on its citizens,” wrote one author at Splinter of the supermajority requirement. Another at Slate added:

[T]here’s absolutely no reason Democrats should be offering even vague rhetorical support for the idea on the federal level. If anything, they need to start arguing clearly and forcefully that paying somewhat higher taxes is worth it in return for good public services, especially if it means ultimately saving money by paying less for health care and education—at least if they want to deliver on the expensive blue-sky policy ideas candidates have started campaigning on.

The middle class needs to learn that “free sh*t” isn’t free and Pelosi’s rule is only delaying the lesson. Plus, it’s silly for her or anyone to think that a pledge not to raise income taxes on the middle class will be treated as a promise kept if Democrats only raise payroll taxes or sales taxes or whatever. As Klein, Slate, and others have correctly noted, Pelosi’s rule will be understood by most voters as a promise not to raise any taxes on the middle class. The rich are going to pay for everything! She promised! Well, no, she didn’t really — but I wouldn’t fault anyone who’s absorbed Democratic messaging for the last decade and come to the false conclusion that the upper class are the only people in the crosshairs here. Democrats are going to have to break the news to middle-class people at some point about what’ll be required to pay for their programs. No time like the present, with a new majority and plenty of voter goodwill.

Maybe this is all just a ploy by Pelosi, who knows that the rule doesn’t really matter since the Democratic agenda is DOA in the Senate and the White House until 2021 at least. Might as well impress middle-class taxpayers with a showy measure requiring a supermajority to raise their income taxes, knowing that that rule can always be lifted in a few years if an opportunity for a total government takeover of health insurance presents itself. New York mag raises a fair point, though, in noting that “Once procedural rules are established … they can be difficult to eliminate.” Repealing the rule in 2021 after endorsing it this year will make it that much harder for Democrats to explain later why it has to go. But Pelosi is a bottom-line politician and may believe that it’s risky and pointless to show swing voters her cards on massive tax hikes right now, when momentum is with the party and against Trump. Better to stay in the good graces of the middle class, win the next election and total control of government, then ram through their agenda before voters know what hit them. If that results in a massive backlash at the polls in 2022 that costs Democrats their new majority, that’s fine. Wouldn’t be the first time Pelosi has sacrificed a majority in order to pass a paradigm-shifting piece of domestic legislation. Nancy plays the long game.

One alternative possibility: News emerged last night that she’d won the support of prominent progressives in the House for her Speaker bid, raising the question of what Pelosi might have traded away in return. Will she back off on the supermajority rule now? Did she, perhaps, always intend to back off it in exchange for backing from progressives, endorsing the rule initially purely as a bargaining chip? Or was there some other concession involved? Politico notes that House progressives registered their concerns about the “paygo” rules and that Pelosi promised to bring them up for debate. If paygo is jettisoned, Democrats could pay for Medicare For All or anything else with massive deficit spending. Good thing the U.S. doesn’t have any problem with rising debt and interest payments that might complicate those ambitions.

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David Strom 8:41 PM on January 30, 2023