It’s a question every Democratic presidential candidate knows is coming, and yet it always trips them up.
They have struggled at every Democratic primary debate so far this year when asked if they support higher taxes not just on the rich but on the middle class, as part of Democrats’ ambitious domestic policy agenda.
Debate moderator George Stephanopoulos asked Sen. Elizabeth Warren (D-Mass.) at the Houston debate last month about universal health care: “Will middle-class taxes go up?”
“Let’s be clear about health care,” Warren said, launching into an explanation about how middle-class Americans would pay less under a universal health care system. Warren implied that taxes would go up, but refused to give Stephanopoulos a direct answer. Sen. Bernie Sanders (I-Vt.) also avoided saying “yes” to the tax question that night.
At the debate in June, former Rep. Beto O’Rourke (D-Texas) blanched when asked if he’d support a top marginal tax rate of 70%, saying meekly that he supports a tax code “that is fair to everyone.” And this is the guy who offered a “hell yes” when asked if he would confiscate people’s assault weapons.
The tax question is a trap, premised on the idea that raising taxes is always bad politics. The moderator already knows the candidate’s position. Both the moderator and the candidate believe that answering with a simple “yes” would launch a thousand Republican attack ads. Not answering doesn’t work either. After the September debate, TV analysts and the Republican National Committee bashed Warren for not disavowing taxes and not embracing them.
“The tax question is a trap. ... Both the moderator and the candidate believe that answering with a simple ‘yes’ would launch a thousand Republican attack ads.”
The question also ignores the underlying math. Under the “Medicare for All” proposal that many candidates have endorsed in some form, the $3.5 trillion cost of the U.S. health care system would shift to the government, which currently pays about half of that total. Many households would pay higher taxes ― in lieu of forking out for insurance premiums, copays and surprise medical bills. A single-payer system would have lower administrative costs, meaning that households would end up spending less on health care overall.
“It’s not a fair question because the thing people don’t like about taxes is it means they have less money,” said Matt Bruenig, founder of the left-wing think tank People’s Policy Project. “But Medicare for All, as proposed, would mean that middle-class people would have more money, not less money.”
A fairer question would be to ask candidates to explain how they’d convince voters of the tax tradeoff’s benefits.
Warren tried to do so last month while sidestepping the direct inquiry about a tax increase: “For hardworking families across this country, costs are going to go down and that’s how it should work under Medicare for All in our health care system.”
It might have been the best possible response, considering the circumstances, but it’s worth examining the underlying assumption: Are middle-class tax increases really political poison?
People Are Proud To Be Taxpayers
Vanessa Williamson, a scholar and Brookings Institution senior fellow who has done extensive research on public attitudes toward taxation, doesn’t think so.
Williamson previously studied the tea party backlash to Barack Obama’s presidency, interviewing activists who ostensibly hated taxes and deficits. She found they actually had favorable attitudes toward big government programs like Social Security and were more motivated by fears that Obama would shower government benefits on populations they considered undeserving, including immigrants and people of color.
Williamson noticed that tea partiers frequently prefaced their gripes by saying, “As a taxpayer ...” and it made her wonder: If these people hate taxes so much, why are they so proud of having paid taxes?
Her research found that the seemingly anodyne concept of being a “taxpayer” is full of connotations heavily shaped by politics. “People use the rhetoric about taxpaying to get at these bigger issues of who counts as an American and does the government represent people like me,” she said in an interview.
In other words, people are less angry about paying taxes than they are about what the government does with that money ― and their understanding of “government” is highly flexible. If a tax is linked to something people like, such as roads, schools, Social Security and Medicare, they don’t hate it at all.
Decades of white identity politics have had a major impact. Surveys have shown that someone who believes African Americans are entirely to blame for their economic disadvantages is also far more likely to dislike taxes and oppose public spending.
Some of the evidence that people don’t simply hate taxes has been hiding in plain sight. Overwhelming majorities of Americans have told pollsters for years that taxpaying is a civic duty and tax evasion is wrong. Again and again, nearly two-thirds of voters tell Pew that it bothers them “a lot” that corporations and the wealthy don’t pay their fair share, while less than a third are bothered by what they themselves pay. Majorities of Americans consistently tell Gallup that they think their own federal income tax burden is fair.
Williamson thinks trends may even suggest a greater willingness to vote for more taxes. According to her analysis, voters approved only 20% of tax-increase measures on statewide ballots in the late 1970s and early ’80s, but in the last decade, voters have approved half of the dozens of tax-hike initiatives that made it onto their ballots. In 2012, for instance, voters in several states endorsed higher income taxes and taxes on marijuana sales.
A HuffPost/YouGov survey this month found that 44% of Americans approve of a single-payer program in which all Americans get health insurance through a government plan, while 36% oppose. If the program were financed with a tax on households worth more than $50 million, Americans were even likelier to support the proposal, with 50% in favor and 33% against. But if it were financed with a payroll tax, only 36% favored the idea and 39% opposed it.
Which Taxes Are We Counting?
Republicans sometimes play identity politics by claiming that half of Americans don’t pay taxes. Running for president in 2012, Mitt Romney said that 47% of the country pays no federal income tax, is hooked on welfare and will never vote Republican.
“Americans perceive themselves as taxpayers but imagine that many other people, and especially lower-income people, do not pay taxes,” Williamson wrote in her 2017 book, “Read My Lips: Why Americans Are Proud to Pay Taxes.” “The belief that many Americans are getting government benefits without paying into the system encourages opposition to social safety net spending.”
One reason that politicians can manipulate views on taxes is that the tax system itself is confusing. Romney was correct that a significant percentage of Americans pay no federal income tax, but income tax is just part of the federal tax code. Even people who owe no income tax have Social Security and Medicare taxes automatically taken out of their paychecks, and those two payroll deductions represent more than a third of all federal revenue. (Federal income tax is also incorrectly withheld from the paychecks of some low-wage workers who don’t owe it and who ultimately never get it back in the form of a refund.)
The payment of Social Security and Medicare taxes, however, doesn’t get highlighted every year when Americans fill out their tax returns, and many people seem to believe, incorrectly, that someone who doesn’t pay income tax isn’t paying taxes at all.
In fact, anyone who earns a paycheck is a federal taxpayer since Social Security and Medicare taxes are taken from a worker’s very first dollar of income. In most states, anyone who buys almost anything at a store pays a state sales tax. One recent analysis argues that if you count state and local levies, the poor pay a higher percentage of their income in taxes than the rich do. But comments like Romney’s reinforce the notion that those taxes don’t count ― and surveys show that Republicans who follow the news are likelier to underestimate the share of Americans who pay taxes.
That Time They Said Taxes Are Hitler’s Fault
There’s another womp-womp reason that Democrats have no good answer to the tax question: They helped lay this trap for themselves.
When Democrats created Social Security retirement insurance in the 1930s ― probably the most successful and popular social program in American history ― they paid for it with a new payroll tax. But instead of calling it that, they often described the funding mechanism as “contributions” made by workers that would eventually pay them an annuity.
And when Democrats pushed higher income taxes on the middle class in the ’40s and ’50s, they stressed that this was only to pay for wars or to control inflation. During World War II, the Roosevelt administration hired Walt Disney to make propaganda cartoons that literally blamed Adolf Hitler for higher taxes.
This kind of tax rhetoric has had long-term consequences, according to Molly Michelmore, a historian at Washington and Lee University.
Democrats “failed to link these new tax burdens to a coherent theory about the mutual obligations of the state and its citizens,” Michelmore wrote in her 2012 book, “Tax and Spend: The Welfare State, Tax Politics, and the Limits of American Liberalism.”
In the ’60s and ’70s, the media increasingly focused on sensational stories about welfare fraud. Rather than defend public aid, Democrats turned to tax cuts to stimulate economic growth, which they said would reduce welfare caseloads. Amid complaints about the freeloading poor, Republicans positioned themselves as the true defenders of taxpayers.
Even as Congress cracked down on cash assistance, it expanded Social Security and added a new health insurance program, Medicare, funded from payrolls. And lawmakers nurtured tax preferences for things like homeownership and employer-sponsored health insurance ― tax cuts that ultimately became pillars of middle-class American life. The tax expenditure for employee health insurance is one of the biggest of them all. It amounted to more than $300 billion in 2018 ― about the size of four food stamp programs.
Thus, Social Security and Medicare became “entitlements” earned by a lifetime of labor, the concept of direct assistance turned toxic, and enormous tax expenditures remained essentially hidden. When’s the last time you heard someone say they were grateful for the exclusion of employer-sponsored health insurance from their taxable income?
“Liberals created this discourse,” Michelmore said told HuffPost.
Today, Democrats still want to reduce material hardship in the U.S., but their ideas often use the tax code, lest anyone think they’re giving out cash rather than creating market incentives. Democratic candidates and members of Congress have put forward a variety of proposals that would use taxes to slash child poverty, reduce child care costs and make housing more affordable.
“This is not a massive new federal program,” Sen. Michael Bennet (D-Colo.) said of one such bill earlier this year. “It cuts child poverty by 40%, but it does it as a tax credit.”
‘What We Pay For A Civilized Society’
It’s not impossible to come up with a defense of taxing and spending. The simplest and most famous is a 1927 quote from Supreme Court Justice Oliver Wendell Holmes: “Taxes are what we pay for a civilized society.”
(The most infamous argument was Obama’s “you’ve got a business, you didn’t build that” gaffe from 2012, in which he mangled a much better articulation ― by Warren ― of how entrepreneurs benefit from publicly funded infrastructure.)
Still, neither Williamson nor Michelmore thinks it would be wise for Democratic candidates to embrace taxes in response to an unfair debate question, given the way that criticism of “tax and spend” policies leverages decades of unhelpful political messaging.
In an open letter to CNN, Tax March, a coalition of liberal organizations like the Center for American Progress and Americans for Tax Fairness, asked for no more “questions in which proposals like Medicare-for-All are colored as being a possible tax increase on the middle class.” The group also tried to call out the network in a national commercial, but they said that CNN, which hosted the July debate and is set to co-host the October one, refused to air the ad. It did play on local TV in Washington, D.C., and in Ohio, where the October debate is happening.
Sanders sometimes acknowledges that Medicare for All would come with higher taxes. At the June debate, he said the middle class “will pay more in taxes but less in health care [costs] for what they get” under his proposal. In the September debate, when he was asked the question again, he thought better of his answer, stressing instead that nobody would pay more than $200 per year for prescription drugs under his plan.
Joe Biden bashed him anyway, saying people would pay higher income taxes.
“That’s a reality,” the former vice president said. “Now, it’s not a bad idea if you like it. I don’t like it.”