Unable to identify any regulatory reforms that would make things more affordable for consumers, Democrats are promising tax cuts that would not only add trillions of dollars in new debt under existing government spending levels, but they would also add trillions more once additional spending increases are tacked on. The pushback to Sen. Cory Booker’s (D-NJ) new tax cut plan from both the right and left shows just how misguided Democrats have become on affordability.
“Americans are working harder and harder, and they’re making less and less relative to their parents and grandparents,” Booker said when releasing his Keep Your Pay Act this week. “The economy is not working. So we need big ideas that could redeem the dream of America.”
Booker’s “big idea” is a tax cut on par with President Donald Trump’s One Big Beautiful Bill Act. But instead of lowering income rates for virtually everyone, he proposes bumping the standard deductions from $16,000 for individuals and $32,000 for married couples to $37,500 and $75,000, respectively.
“It will have a significant impact on the average American in raising their income,” Booker claims.
According to a preliminary analysis by The Tax Foundation, Booker’s tax cut would leave more money in most people’s pockets and benefit high-income earners most. Specifically, those in the 60th to 80th percentile income brackets would see the greatest tax cuts.
Booker created a handy tax calculator on his website to demonstrate this. A married couple with no children making $30,000 would see no benefit from Booker’s plan, but a married couple with $300,000 would get a $10,000 tax cut. A married couple with two children making $40,000 would get a $4,300 tax cut, while a married couple with two children making $400,000 would get a $13,792 tax cut.
If you dreamed of living long enough to see even Democrats proposing tax cuts that deliver more money to the rich, your day has come!
Booker claims his plan is “fully paid for” by raising taxes on corporations and the wealthiest Americans, but he hasn’t provided details. When he does, he will run into problems. Most of the tax loopholes Democrats want to close are for their own policy priorities, such as alternative energy production, clean vehicle purchases, and manufacturing investments. It is because of these loopholes that many corporations pay no corporate tax.
As much as Democrats have attacked Trump’s tariffs as a tax on consumers, reams of economic research show that corporate taxes function the same way. Higher corporate tax rates mean higher prices — hardly the affordability result Democrats are looking for.
The reality is that the United States already has the most progressive tax system in the developed world. While the top 1% of earners take home 22.4% of all income, they pay 40.4% of all taxes at a 26.1% rate. Meanwhile, the bottom 50% of earners pay just 3% of all taxes at an average rate of 3.74%. There simply isn’t much more revenue to be drained from top earners.
If Democrats want to spend trillions more dollars on domestic priorities such as Medicare for All, free child care, and more generous food stamps, they will have to expand the tax base, not shrink it. Under current law, upper-middle-class families in the top 25% to 50% bracket take in 18% of all income and pay 10% of all taxes. Democrats are going to need this group to pay substantially more, not less, to meet their vision of big government.
“The Democratic Party is confused about what it wants,” Bobby Kogan, the Center for American Progress’ director of federal budget policy, said of Booker’s plan. “The point of taxes is to help fund a society,” Kogan continued, and Democrats can’t pay for the programs they want by only taxing the 1%.
DOMESTIC ENERGY DOMINANCE MAKES US SAFER
The Booker tax plan and a similar one by Sen. Chris Van Hollen (D-MD) are revealing because they portray a party that has realized it can’t sell voters on the idea that higher taxes are a worthwhile investment that will be spent efficiently and fairly by the federal government.
Instead, they are attempting to campaign on tax cuts they cannot honestly finance while keeping intact the same sprawling spending ambitions that made life less affordable in the first place. This is not an affordability agenda. It is a confession that voters no longer trust Democrats with their money and the economy.