For progressives, this summer of Donald Trump has been a guilty pleasure, one in sync with the Urban Dictionary’s definition of the term: “Something that you shouldn’t like, but like anyway.”
Oh, we tut-tut as we talk about the cartoonish real estate mogul and express righteous outrage at his unfiltered nativism, misogyny, bullying, egotism and superficiality. And, to be clear, it is outrageous, all of it.
But as suggested by the ancient proverb “the enemy of my enemy is my friend,” we progressives delight that Trump has brought into full public view, without the euphemisms and dog whistles favored by other Republican presidential candidates, what today’s Republican Party really stands for. And that, primarily, is to serve the interests of plutocrats and give comfort to the simmering resentments of extreme social conservatives.
Yes, Gov. Scott Walker boasted last week that as president he would “wreak havoc” on Washington, D.C., part of his latest tone-deaf attempt at positioning himself as the political outsider. (Walker and his brain trust have apparently settled on this gambit even though Walker is an all-his-adult-life politician, but never mind that.)
In reality, it is Trump wreaking havoc, not Wisconsin’s flailing, out-of-his-league governor. When it comes to Trump, Walker and other GOP candidates have been surprised, undercut and at a collective loss on how to respond.
Much of the Trump-as-wrecking-ball narrative has focused on topics such as immigration, but the subject that might have a longer lasting effect is the billionaire’s outspoken rejection of the GOP doctrine of trickle-down economics.
A recent New York Times article summed up it nicely: “For years, Republicans have run for office on promises of cutting taxes and bolstering business to stimulate economic growth, pledging allegiance to a Reaganesque model of conservatism that has largely become the party’s orthodoxy.” But Trump’s contrarian rhetoric, the story went on to say, is “jangling the nerves” of the traditional GOP elite.
Trump has repeatedly espoused decidedly unorthodox positions, at least coming from a Republican. For instance, he threatened to impose tariffs on American companies that place factories in other countries and said he would change laws that allow American companies to benefit from cheaper tax rates by using mergers to locate their operations abroad.
But my favorite is Trump’s criticism of the so-called “carried interest” tax treatment that allows hedge fund and private equity managers to pay at about half the income tax rate of, say, a Wisconsin schoolteacher. It was that tax treatment that harmed GOP presidential nominee Mitt Romney in 2012 when it was disclosed that he paid only modest taxes on enormous compensation in private equity.
Trump said recently on CBS’s Face the Nation: “The hedge fund guys didn’t build this country. These are guys that shift papers around and they get lucky … They’re energetic, they’re very smart, but a lot of them, it’s like they’re paper-pushers. They make a fortune, they pay no tax. It’s ridiculous, OK?”
But will Trump, in upcoming tax positions, move beyond the galling but narrow category of carried interest? Maybe he will. He told Bloomberg News, for example: “I would let people who are making hundreds of millions of dollars a year pay some tax, because right now they’re paying very little and I think it’s outrageous.”
To expand his populist vision, Trump could propose to increase the capital gains rate, reduce deductions available to people with very high incomes or even increase tax rates for those atop the income pyramid. That is heresy in the GOP, where any tax increase on the wealthy is reflexively dismissed as a “job killer.”
Meanwhile, within the GOP, there is a tiny reform movement that seeks to right-size instead of simply eliminate government. Those pushing this agenda say it is the outlandish influence of wealthy donors — the sort that support Walker — that has dictated GOP efforts to destroy government, not improve how it operates.
Trump “may be the jolt that the Republican Party needs to compromise its pro-plutocratic agenda,” David Frum, a conservative journalist and former speech writer for President George W. Bush, told the Times.
The Obama administration, as you’d expect, supports an overhaul of the tax code that includes taxing hedge fund and private equity compensation as ordinary income and changing how American corporations are taxed overseas.
But for Trump, with his widespread appeal among blue-collar conservatives, to inject such notions into the presidential campaign, well, that has gained the attention of GOP power brokers.
“A lot of these things are not things that businesses would be happy about,” groused Michael Strain, a scholar from the conservative American Enterprise Institute.
And Grover Norquist, founder of the conservative Americans for Tax Reform, worried in the same Times article: “I would certainly be concerned about how that conversation would continue. Democrats will take that and say, ‘Now that you’ve conceded the point, let’s go further.’ ”
And wouldn’t that be a shame.
The tax vision of a candidate like Walker will certainly align with Frum’s description of a “pro-plutocratic agenda,” the kind Walker has pursued in Wisconsin since taking office in 2011. After all, the Koch brothers and other wealthy contributors provided lavish campaign funding, and Walker has dutifully repaid the investment with his war on working people and public education.
Walker recently told John Harwood, chief Washington correspondent for CNBC, that he would outline his modern-day version of a Reagan agenda on taxes in October. Rest assured there will be nothing Trump-like or unpredictable about Walker’s vision. It will certainly have tax cuts skewed towards the wealthy — excuse me, “job creators” — and cut spending on government programs aimed at helping the needy or the middle class.
In Wisconsin, that approach has meant cuts to higher education, general school aids and natural resources and oppressive spending controls on local governments. (Isn’t it richly hypocritical how Walker wants decisions made at the state level, not in Washington, D.C., but then, at every opportunity, undercuts local government control?) Walker’s playbook borrows excessively for infrastructure spending so he can retain his no-tax-increase political image, and in so doing punish future taxpayers.
By comparison, Trump sounds like FDR.