In their frantic search for a new economic identity, some potential Democratic White House contenders have coalesced around what they see as a hopeful frontier for populism: big tax cuts for the middle class. Unfortunately this is neither a new idea nor a good one. Such tax cuts would sabotage progressive ambitions, and they would be unlikely to pay the political dividends establishment Democrats seek.
A few weeks ago, Sen. Chris Van Hollen, D-Md., proposed exempting from federal income tax individuals who earn less than $46,000 and married couples who earn less than $92,000. Such a move would primarily benefit people in the middle of the income tax distribution. A number of other possible 2028 hopefuls, including Arizona Sens. Mark Kelly and Ruben Gallego, have backed Van Hollen’s plan. Around the same time, Sen. Cory Booker, D-N.J., who could also throw his hat in the ring in 2028, released his own plan to exempt married couples who make less than $75,000.
This is the exact wrong time to pursue middle-class tax cuts.
There are some significant differences between the details of Van Hollen’s and Booker’s plans. Their effects on the budget would be different, they would create different kinds of relief from federal taxation, and Booker’s plan also contains provisions that would give a significant boost to lower-income people. But each plan would use taxes on the rich to fund tax breaks for the middle class.
These tax cut proposals, along with some parallel ones at the state level in high-profile primary races, have garnered a lot of attention — and increasing controversy. Tax wonks from various camps in the Democratic Party and some progressives, such as Rep. Ro Khanna, D-Calif., have described the proposals as misguided.
We should hope the critics prevail. It might seem counterintuitive, but tax cuts for the middle class would be a step away from enduring economic freedom, not toward it.
Sure, tax cuts sound like a good idea when the affordability crisis is the defining economic problem of the moment. Big tax exemptions for people who earn enough to pay federal income taxes but are squeezed intensely by a high cost of living would mean they have more money to spend. But these exemptions would effectively make it impossible to fund social democracy — and help Americans who are the most vulnerable to the affordability crisis.
Consider former President Joe Biden’s fiscal 2025 budget proposal, which did not come to fruition but laid out how much a big expansion of the social safety net would cost.
“Joe Biden’s last budget raised something like four and a half trillion dollars through tax increases on the top 2% and corporations, and funded child care, universal pre-K, free community college, paid family and medical leave, provided Medicaid to uninsured people in states that didn’t adopt the Affordable Care Act, and a whole bunch of other things that would have made this country far more fair,” Brendan Duke, senior director for federal budget policy at the Center on Budget and Policy Priorities and a senior policy adviser in the Biden administration, told me over the phone. “Middle class tax cuts break that math.”
Middle-class tax cuts are a kind of double blow to progressive ambitions. They reduce the revenue base for funding important social programs. And paying for them also requires taxes on the rich that would have been better spent funding other more worthwhile policies.
Duke pointed out that what makes middle-class tax cuts hurt even more is that whenever Democrats reenter office, they will have to spend a ton of money just undoing the wide-ranging damage of the Trump era.
“If you wanted to undo the tariffs, that would probably cost something like $2 trillion. If you want to undo the Medicaid and SNAP cuts, which are highly unpopular among elected Democrats, that probably cost another $2 trillion,” he said. “Then bringing back the improvements to the Obamacare subsidies, that would cost something like $400 billion. So that’s $4.4 trillion without actually making the world any better than when Joe Biden was president.”
In other words, this is the exact wrong time to pursue middle-class tax cuts, since a huge amount of revenue will be required to just get back to an already problematic pre-Trump status quo. Then building a more progressive world than Biden was able to achieve would require generating as much tax revenue as is politically possible in addition to that. And ultimately, in the long run, really ambitious changes to how the government provides social services in the future might require tax increases not just on the rich and corporations, but also on the middle class, such as Medicare for all (although the idea is these policies save money overall by reducing the cost of care). So middle-class tax cuts would just be setting the clock back.
These cuts lend credence to the right-wing notion that taxes should be seen as a burden or punishment.
The reality is that most Democrats know there is not a strong policy case for sweeping middle-class tax cuts. They are likely thinking that promoting middle-class tax cuts sounds populist, the same way Trump’s “no tax on tips” policy sounds populist (Then-Vice President Kamala Harris mimicked Trump’s no-tips policy on 2024 campaign trail). But no tax on tips is largely gimmicky, only affects some 2% of households and was ultimately a shiny object used to distract Americans from a legislative package that cut taxes for the rich.
It’s also unlikely that middle-class tax cuts will be politically rewarding even if they sound catchy on the campaign trail. A January New York Times/Sienna poll asked voters what they worry about affording, and taxes ranked near the bottom of the list. Moreover, historically, people tend not to notice their own tax cuts after they have been enacted. That’s largely because changes to the tax code are an example of what the political scientist Suzanne Mettler called the “submerged state,” — government benefits that are largely invisible in everyday life.
There is also a political cost to pushing for middle-class tax cuts: it’s an ideological concession to the right. It lends credence to the right-wing notion that taxes should be seen as a burden or punishment. Liberals and leftists believe taxes are a shared responsibility and the means by which the government can help provide a dignified life for all of its citizens. Some Democrats might believe trying on tax cuts for size counts as centrism or triangulation, but in actuality, it would be an example of incoherence, yet another sign that Democrats have no idea who they are and only react to rhetoric from the right.
Democrats are right to care about affordability. But the better way to tackle that is by seeking to increase the social safety net and investing in policies that would reduce the cost of big ticket items in Americans’ everyday lives, such as housing and health care. Peddling middle-class tax cuts are a gimmick that will undermine Democrats’ ability to achieve those worthwhile things.
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