ANALYSIS — There’s a silver lining for suburban voters who backed President Donald Trump in 2016 and who’ve grown weary of his antics but can’t stomach the assault on their pocketbooks they see coming from the Democrats.
Extrapolating from 2016 exit polls, Trump’s margin with suburbanites in four critical swing states — Florida, Michigan, Pennsylvania and Wisconsin — was roughly 1 million votes. Considering Trump’s 190,655-vote margin overall in those states, Democrats just need to claw back about one-fifth of the suburbs.
This should in theory be doable: While Republicans typically enjoy strong suburban support, Trump is no typical Republican. Voters may not be convinced Trump’s Ukraine shenanigans justify removal from office, but his net disapproval rating has jumped nearly 6 points in the RealClearPolitics average since Speaker Nancy Pelosi announced the formal impeachment inquiry last month.
However, Massachusetts Sen. Elizabeth Warren, with lots of plans involving lots of taxes, is sitting atop polls in Iowa and New Hampshire; if she wins both, Warren could be unstoppable. But a Warren presidency doesn’t mean she gets carte blanche to transform the U.S. economy. And that’s the silver lining for wavering Trump voters.
A best-case scenario could see Senate Democrats gain a slim majority if they run the table in states like Arizona, Colorado, Maine and North Carolina. There’d be enormous pressure to eliminate the legislative filibuster, since Democrats are likely to control the House, or at minimum use budget reconciliation to pass legislation with simple majorities. Even then, a Warren agenda could face an uphill climb with freshmen and purple-state Democrats.
According to the Urban Institute, under a robust single-payer health care plan, federal spending would need to rise by $34 trillion over a decade. Four-fifths of that would just be picking up costs currently borne by households, employers and states. Taxes could be imposed to keep that overall burden unchanged, though within this realignment Warren says the middle class will pay less, with the wealthy and “big corporations” paying more.
But covering the uninsured would take another $7 trillion, which isn’t financed by any of the $9 trillion in tax increases Warren has already proposed, though Warren says she’ll have a plan for that too. Keep in mind, however, that House Democrats couldn’t adopt a budget this year because of divisions over much smaller tax increases.
The House’s incremental approach is already evident in proposals to cut prescription drug prices and tax vaping products the same as cigarettes, using the revenue to offer dental, vision and hearing coverage through Medicare and make it easier to buy menstrual products, over-the-counter drugs and inhalers. Under a Democratic president, they’d look to plug holes in the 2010 health care law to make coverage more affordable, as Vice President Joe Biden’s relatively modest $750 billion plan would. Warren’s proposed ban on hydraulic fracturing would take congressional approval to prohibit drilling on nonfederal lands, which accounts for more than 90 percent of onshore oil and gas production, according to the Congressional Research Service. And it won’t play well with Democrats in states like Colorado, New Mexico and Pennsylvania, let alone help nascent efforts to turn Texas blue.
Natural gas heats 47 percent of U.S. homes and accounts for 35 percent of electricity, according to federal data. Tudor, Pickering, Holt & Co., a Houston investment advisory firm, predicts a fracking ban could quadruple natural gas prices, The Wall Street Journal reported. Oil prices — which make up around 60 percent of the cost of gasoline, according to the Energy Information Administration — could jump to $85 a barrel, the firm said, or more than 40 percent above current prices.
Top Democratic candidates want dramatic tax increases on savings and investment, targeted at the rich. But it’s not clear Pelosi and other Democratic leaders will be interested; they receive mountains of campaign cash from private equity, venture capital, real estate and other big money managers, many of whom are constituents.
There’s also a point where capital gains taxes start to lose revenue because investors don’t want to sell and suffer the tax hit. That’s somewhere in the 30 percent range, according to various estimates, suggesting there’s room to boost the current 23.8 percent top rate.
But even Biden wants to up the top capital gains rate by nearly 20 points, exceeding a modern high of just under 40 percent before Democrats’ 1978 tax cuts. Biden would also eliminate the preferential tax treatment of capital gains, which policymakers of both parties have preserved to encourage entrepreneurial risk-taking and mitigate the effects of inflation.
Then there’s state and local tax deductions, now capped at $10,000 annually. Removing that limit would be expensive, but it would benefit well-heeled suburban voters in New Jersey, California and elsewhere who fueled House Democrats’ midterm gains. And it would take the sting out of likely increases in marginal income tax rates.
So if suburban voters are conflicted next November, they might take comfort in the legislative sausage-making process: Congress is designed to soften extreme positions at both ends of the political spectrum.
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