Moneybox

House Democrats Are Already Pursuing a Dumb Tax Stunt, and the Left Is Very Annoyed

Nancy Pelosi gestures as she speaks to reporters
You don’t have to do this, Nancy.
Brendan Smialowski/Getty Images

While House Democrats are locked in a leadership battle that seems more or less divorced from any actual policy concerns, they also seem to be waltzing toward a decision that could pointlessly complicate future efforts to pass a vaguely progressive agenda.

On Thursday, the Washington Post released a draft list of House rule changes that Minority Leader Nancy Pelosi has backed. Some of them are harmless or even useful. For instance, Democrats want to bring back regular order and impose a rule that a bill’s text be available for 72 hours before a vote. Eminently reasonable! They want to prevent standoffs over the debt ceiling by reviving the so-called Gephardt rule and would eliminate dynamic scoring requirements from budget estimates that Republicans used to make tax cuts look cheaper.

But then, tucked at the bottom of page five, there’s an item that’s already setting off alarm bells across the left. The rule—endorsed by Pelosi and Richard Neal, the top Democrat on the House Ways and Means Committee—would “require a three-fifths supermajority to raise individual income taxes on the lowest-earning 80 percent of taxpayers.” The Institute on Taxation and Economic Policy has called this idea “problematic.” Eric Levitz at New York magazine writes that it would create “a new — and all-but-insurmountable — obstacle to the passage of many of the policies that the Democratic Party claims to support.” A number of progressive House members have announced opposition, including newly elected Rep. Alexandria Ocasio-Cortez and Rep. Ro Khanna , while the activist group group Moveon.org called it a “staggeringly bad idea” on Twitter.

Progressives are alarmed by this idea for a few reasons. Some of their most ambitious policy ideas, such as Medicare for All, will likely require raising taxes on middle-income households at least a bit, and this rule could make that harder. It might also complicate efforts to reform the tax code, such as evening out the rates on capital gains and income taxes. That would mostly affect high-earners, but since some middle-income households might be impacted too, this rule—depending how it’s written—could trip up those efforts. Democrats seem to be handcuffing themselves before Pelosi has even picked up the speaker’s gavel.

It’s probably an exaggeration to say that the supermajority proposal would pose an “insurmountable” obstacle to a popular bill. House rules of order such as this are symbolic to some extent, since lawmakers can waive them whenever they want to pass a bill that’s more pressing than renaming a post office. All they need is a simple majority vote. And it’s easy to see why this particular bit of symbolic messaging would appeal to Democrats. After all, they spent much of the tax reform debate hammering Republicans for writing a law that slashed taxes on corporations while hiking them on some middle-class families. The proposed rule more or less codifies that House Dems want to do the opposite of that. It’s aspirational.

Democrats also didn’t pull this idea out of thin air, either. Henry Connelly, an aide to Pelosi, explained to me that the House currently operates under a rule put in place by retiring Speaker Paul Ryan that requires a supermajority to raise income taxes at any level. Democrats want get rid of those shackles while still showing their support for the middle class. “The proposal would rewrite that rule to end the supermajority protection for the GOP’s tax giveaways for the wealthiest, while affirming Democrats’ commitment to protect hard-working Americans.”

It’s also worth noting that the proposal isn’t final yet. A Democratic aide told me that the end version would only affect personal income tax rates and not preclude raising payroll taxes, which is a big part of how Bernie Sanders has proposed paying for single payer health care. We’re talking about something that could be rather limited in scope.

With all of that said, this proposal does seem pretty ideologically toxic. Requiring a supermajority to raise taxes is a fundamentally conservative idea meant to hollow out the core of progressive government. There are currently 15 states with such rules on the books, either via statute or via their state constitution, and there’s absolutely no reason Democrats should be offering even vague rhetorical support for the idea on the federal level. If anything, they need to start arguing clearly and forcefully that paying somewhat higher taxes is worth it in return for good public services, especially if it means ultimately saving money by paying less for health care and education—at least if they want to deliver on the expensive blue-sky policy ideas candidates have started campaigning on.

The supermajority clause is also a bit worrisome when you consider that House Democratic leaders have said that they want to bring back PAYGo rules, which essentially require offsetting budget cuts or tax hikes to pay for new spending. Between her anti-tax rhetoric and deficit hawkery, Pelosi is starting off her term sounding like a traditional centrist.

It’s also just bad messaging. Voters who even register this proposal are likely to interpret it as: Democrats have promised not to raise taxes on anybody outside the upper-middle-class. And they’re probably not going to notice whatever fine print the party includes about payroll taxes or deductions. Rhetorically, it feels like they’re needlessly boxing themselves in and giving Republicans a chance to accuse them of reneging on a promise down the line. A better way to get rid of Ryan’s old rule would be to simply junk it and never look back.