While Republicans once were perceived as the party that catered to the nation’s wealthiest Americans, a recent analysis of Internal Revenue Service data has found that now Democrats are more closely aligned with the “party of the rich” concept.
For most of the 20th century, Democrats were considered to be the party of, and champions for, middle, working-class Americans and the poor, becoming the political home for union members and many other Americans who toiled in factories, construction, farming, and other laborious jobs.
In 1993, for instance, GOP congressional districts were typically 14 percent wealthier than Democratic districts, but 2020 IRS data shows that those same Republican districts are now 13 percent poorer.
The same data show that Democrats now represent 65 percent of taxpayers whose household income is $500,000 or more, compared to Republican districts where household incomes are $100,000 or less, the Washington Examiner reported.
The analysis of tax data, income and party affiliation comes as Democrats in Congress are pushing to eliminate former President Donald Trump’s signature 2017 tax reform law that not only significantly lowered corporate and individual tax burdens, but also capped the federal deduction for state and local taxes as $10,000, which irked blue-state wealthy Democrats at the time.
If the deduction cap is eliminated, however, it would only benefit the top 1 percent of the wealthiest U.S. households, but property owners in the highest-tax states including Democrat-run California, New Jersey, and New York would definitely benefit.
Democratic lawmakers who won districts that were once held by Republicans campaigned last year on getting rid of the deduction cap. And some have said they will cling to that campaign pledge even if it means endangering President Joe Biden’s $2 trillion infrastructure spending bill.
“I’m not voting for any change in the tax code whatsoever unless there’s the restoration of the SALT tax deduction. I’m laying that chit on the table,” said Democratic New York Rep. Tom Suozzi, the Washington Examiner reported.
A group of Democratic lawmakers recently sent a letter to Treasury Secretary Janet Yellen regarding the issue.
“Progressive groups have maintained the deduction predominantly benefits the wealthy, and the White House has signaled it wants to keep the caps because they can help pay for the infrastructure plan,” NBC News reported earlier this month.
“Calls to reverse the caps, and restore the unlimited deduction, however, have emanated from a growing number of moderate Democrats predominantly from the Northeast and California — including House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Chuck Schumer, D-N.Y. — where property-owning residents of those high-tax states stand to benefit from the relief on their federal taxes,” the network added.
Democratic strategists, however, see the battle over the cap as a wedge issue for Republicans to exploit.
“For now, all this debate does is make the job of Mitch McConnell and the Republicans easier because it frames it as a blue state versus red state issue,” strategist Glenn Totten said. “Which was one of the intentions of the SALT caps in the first place.”
Meanwhile, as the Democratic Party gravitates toward the upper crust of American society, the GOP is shifting its messaging to the much broader, multiethnic working class.
In a March memo to House Minority Leader Kevin McCarthy (R-Calif.), Rep. Jim Banks (R-Ind.) outlined a GOP strategy moving forward that would concentrate on issues that are most important to lower and middle-class voters.
“President Trump gave the Republican Party a political gift: we are now the party supported by most working-class voters,” Banks wrote. “The question is whether Republicans reject that gift or unwrap it and permanently become the Party of the Working Class.”
“Opposition to illegal immigration and increased legal immigration remains popular among both working-class Americans and the electorate at large,” he wrote, while on trade he said that the GOP “should state clearly: Our opposition to China is a corollary of our support for working Americans,” Banks writes. “The reverse is also true: Democrats’ coziness with China results from their coziness with Wall Street.”
He went on to point out that Democrats’ embrace of “wokeness” can also be exploited by Republicans.
Banks noted that “wokeness and identity politics aren’t pro-Hispanic, pro-African American or pro-LQBTQ; they’re anti-American, anti-women, and most of all, anti-working class.”
But not all Republicans are on board. Rep. Liz Cheney (R-Wyoming), who is expected to face stiff primary challenges next year over her support for impeaching Trump, called Banks’ strategy of going after the working class “Neo-Marxist.”
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