Democrats are caught in a race to the bottom with the GOP on taxes. How can they break out?
Aug. 6, 2026 — Democrats have a problem. With voters crying out for “affordability,” middle class tax breaks, like those proposed by Senators Cory Booker and Chris Van Hollen earlier this year, appear to be one of the easiest ways to provide it to them.
But, as part one of this piece explained, narrowing the tax base puts the party’s other policy goals — like expanding access to health care, childcare, and elder care, and investing in green infrastructure — at risk. Attempting to fund a robust welfare state solely by taxing the ultra-wealthy and corporations would put the nation out of step with the best practices of existing social democracies, which rely on broad-based taxes.
As policy thinkers and party operatives plan for a potential Democratic administration in 2028, a small but growing contingent is looking for a way out of the race to the bottom with Republicans on taxes. What are the political messages that could allow voters to accept the idea of broad-based taxation? What are the optimal ways to design tax policies so they are connected to valued social policies? Can the universally popular slogan “tax the rich,” guide policy without the caveat, “but not me”?
Do voters actually want lower taxes?
Voters want affordability. But how to give it to them remains an open question. According to veteran Democratic pollster Celinda Lake, middle class tax cuts aren’t the most direct route.
When asked about how to improve affordability, the top two things voters bring up are higher wages and lower prices, Lake said. “They actually don’t volunteer cutting taxes. That’s way, way down on the list in terms of affordability.”
A poll from the center-left Searchlight Institute released this spring made a similar finding. While it found that a majority of voters think their taxes are too high, only 41 percent of voters said “paying less” would make them feel better about paying their taxes. Much more common responses, among a menu of options where respondents could select as many choices as they liked, were “knowing everyone was paying their fair share” and “having a better sense of where my money went,” which were selected by 58 percent and 57 percent, respectively.
In its analysis of the poll, Searchlight wrote, “Congress shouldn’t make the mistake of thinking that Americans believe they shouldn’t pay taxes at all… They just have to make sure that the public knows where their taxes are going (are they paying for health care for elderly Americans or an unpopular war in Iran?) and that if they are giving the government their hard earned dollars, others are doing the same too.”
Yet Democrats’ overall tax policy does not appear to reflect these priorities. Instead, the most high-profile tax policy proclamations have been focused on narrowing the tax base.
Over the past decade, Democrats have steadily increased the income threshold at which they are willing to raise taxes, from $250,000 during the Obama administration to $400,000 during the Biden years. “Maybe now it’s a million,” the income threshold at which Van Hollen’s proposed tax increases kick in, said Michael Graetz, a Columbia University Law School professor and tax policy expert.1
“The Republicans don’t want to tax anybody, and the Democrats don’t want to tax 98% of anybody,” Graetz said.
There is an exception to this rule, however.
Social Security reform could offer a template for broad-based taxation
On Social Security, many leading advocates and policymakers are holding the line on broad-based taxation.
“We’re not beholden to the Dems’ ‘no tax increases for taxpayers with incomes below $400,000’ pledge,” a Social Security policy researcher who was granted anonymity in order to speak freely wrote in an email response to Remapping Debate. “We generally support both broadening the tax base (including by ‘scrapping the cap’) and don’t oppose increasing the payroll tax rate, even on middle class taxpayers.”
The most recent version of the Social Security reform bill senators Bernie Sanders and Elizabeth Warren have put forward nearly every year for the past decade continues to call for lifting the payroll tax cap on households making above $250,000. In a June op-ed in the New York Times, Warren and Republican Senator Bernie Moreno advocated for eliminating the payroll tax cap entirely, which would effectively increase taxes on households making more than $184,500 annually.
Voters seem to be on board with this vision, too. A 2025 poll from the National Academy of Social Insurance found that Americans overwhelmingly support eliminating the Social Security payroll cap on high earners and increasing the base payroll tax rate for all workers from 6.2 percent to 7.2 percent. In other words, the “preferred package” for making Social Security solvent would tax the rich more and increase taxes across the board.
The Social Security conversation is significant because it is probably the nation’s most urgent tax issue. Absent action, the Social Security Trust Fund will be insolvent by 2032, leading to lower payments to beneficiaries as soon as that year. As that deadline approaches, it could force a broader reckoning about the tax system.
The Social Security policy framework liberals (and some conservatives) are coalescing around looks much more like the tax policies of social democracies around the world: A universal benefit funded by an uncapped flat tax where payers contribute more as their income rise. It would also make Social Security more explicitly redistributive, doing away with the insurance fiction that whatever taxpayers pay in, that’s exactly what they’ll get out.
What would it take to make this the template for Democrats’ tax policy across the board?
De-submerging the state
The policy experts consulted for this article generally agreed that one part of the Social Security solvency formula — increasing taxes on high earners — should be part of Democrats’ broader tax policy agenda. But the other part of the formula — holding steady or even increasing taxes on the rest of the income distribution — is more disputed. The debate is connected to the question of how best to make voters feel the value of these policy changes.
Bob Lord is senior vice president for tax policy at the group Patriotic Millionaires, which advocates for higher taxes on the wealthy and supports Van Hollen’s bill. (The group’s 2025 policy agenda proposed a “Cost of Living Tax Cut Act” very similar in structure to Van Hollen’s Working Americans Tax Cut Act.) Lord says a lower tax bill is a more tangible benefit than better government programs.
“If you go to the person making 45 or $50,000 a year that is hanging on by her fingernails and you say, ‘We’re going to tax the folks at the top to reduce your federal income taxes by $3,000 so you can afford to pay your basic living expenses’ — that she gets,” he said. “But ‘we’re gonna tax the folks at the top to provide these governmental programs?’ No, she doesn’t get that.”
Lord says the strategy implicit in Van Hollen’s bill is the most effective way to achieve Patriotic Millionaires’ overarching goal of increasing taxation on the wealthy and thus reducing economic inequality. “The first step in increasing those taxes at the top is to do it in a way where the rest of the population is solidly behind it and gets a tangible benefit,” Lord said.
But over the long term, this model — redistributing tax dollars from the wealthy into tax breaks for the middle class — could undermine support for government programs that Democrats hold dear, said Celinda Lake, the Democratic pollster. “I think it’s a real trap,” she said. “We’re really feeding the idea that taxes are waste, taxes are abuse, your tax money doesn’t provide you with anything.”
Suzanne Mettler, a professor of political science at Cornell, has criticized the trend of social services operating through the tax code, arguing that this leads to a vicious cycle of distrust in government. “Governance appears ‘stateless’ because it operates indirectly, through subsidizing private actors. Thus, many Americans express disdain for government social spending, incognizant that they themselves benefit from it,” she wrote in the 2011 book, The Submerged State.
The most durable taxes have historically been those with clear mechanical relationships to specific benefits, like Social Security and Medicare. When he created Social Security, President Franklin Delano Roosevelt “chose a payroll tax in part because he liked the politics,” said David Kamin, a law professor at NYU. “Some of that still plays out in the existing Social Security program — a sense that we have paid into this program, and so we are owed it.”
Kamin added that this kind of feedback loop is not “absolutely necessary” to achieve voter buy-in on taxes. “It’s just that there was a very different approach to these things.”
The built-in legibility and visibility of the Social Security and Medicare taxes could hold lessons for policymakers who want to increase support for taxation, rather than reduce it.
That might look like making a clearer rhetorical connection between major policy goals, like expanded healthcare or childcare access, and a major tax reform proposal, Kamin said, similar to the pitch President Obama made for the Affordable Care Act: “I would hope that that folks will be able to talk about the things government can deliver in ways that get that that gets them bought into the project.”
One of the Democrats’ failures during the Biden administration was the inability to translate major policies, like the Inflation Reduction Act, into tangible improvements in people’s lives, said Adin Lenchner, a political consultant based in New York. Democrats and progressives need to “increase the efficiency of the implementation of these things so that you actually see the impact,” he said.
Lenchner added that it’s important for elected officials to have models of successful policy implementation to point to in order to build support for future tax measures. He suggests that a focus on delivering and publicizing even small improvement in public services can lay the groundwork for broader policy change. “If you can start with the second half of that equation by showing that the government can really help you,” he said, “I think more people would be open to a political argument to have their taxes raised.”
Taxation and democracy
Scholars like Larry Zelenak and Vanessa Williamson have made the point that taxation is an essential part of the social contract. Taxation, Zelenak has written, amounts to a form of “fiscal citizenship.”
“Just as voting is the ceremony and the acknowledgement and exercise of your citizenship in terms of political participation in the government, the income tax does the same thing with respect to financial participation in the government,” he explained to Remapping Debate. For decades after World War II, when the majority of Americans were first subject to the income tax, “it was pretty much taken as a given that the income tax should be a mass tax, and that was important not only for revenue reasons but for what you might call fiscal citizenship reasons as well,” Zelenak said.
The mass income tax was conceived by liberals, starting with FDR, as a way of making “people feel like they are really part of a polity,” Zelenak said. For conservatives, the mass income tax also enabled a greater sense of accountability over government spending.
Williamson makes a similar point in her 2025 book, The Price of Democracy. “An essential aspect of the defense of government is the defense of taxes—including, I would argue, the taxes that fall on everyday people. Perpetually promising to raise taxes only on the rich is a capitulation to the conservative position that taxes are a punishment, rather than a responsibility.”
The bipartisan anti-tax turn of recent decades has changed this discourse. Could a return to the rhetoric of fiscal citizenship make voters more willing to tax themselves?
That depends on whether voters actually feel represented by the government their taxes are funding. The Boston Tea Party, Williamson notes, was not a rebellion against taxes, but against not having a say in what those taxes were funding. Suffragists made the case for female enfranchisement by emphasizing their role as taxpayers.
“Americans express willingness to pay taxes only to the extent they see themselves and their interests as tied to the wider community that benefits from tax dollars,” Williamson wrote in her 2017 book, Read My Lips: Why Americans Are Proud to Pay Taxes.
In our hyperpartisan political environment, it’s difficult to see how people on opposing sides can both feel good about how their tax dollars are spent. However, Williamson notes that the ways politicians describe the tax system have an impact. They can start by “avoiding rhetoric that reinforces public misperceptions,” like saying the poor or immigrants don’t pay taxes.
Connecting the notions of taxpaying and citizenship also risks circumscribing who is worthy of government spending, and who is not, said Molly Michelmore, a professor of history at Washington and Lee University. “Taxpaying as the language of entitlement and the language of citizenship erases all of the gendered and racial and even class stuff that have determined who could get stuff and who could not, and substitutes this language of fiscal neutrality.”
Instead of making the fiscal citizenship argument, it may be more effective to stick with the messages that voters say are their biggest priorities when it comes to tax policy: making sure money is well spent and that the system is fair.
In fact, these are the features of the most durable tax systems, Stanford political scientist Margaret Levi found in her 1988 global-historical study, Of Rule and Revenue. Durable tax systems “provide assurances that rulers will keep their bargains and that others will pay their share,” she wrote. “Quasi-voluntary compliance,” the implicit agreement between governments and citizens on taxation, “cannot thrive if people think they are suckers.”
Win first, up the ante later?
Some policy experts say these strategic questions about how to make Americans more comfortable with taxation are secondary to another goal: Getting Democrats back in power.
Though Michael Graetz takes issue with the design of Booker and Van Hollen’s tax plans, he still believes they are “politically sensible” in light of Democrats’ partisan competition with Republicans. “First, they have to get elected, or they can’t do anything,” Graetz said. “And to be elected, you can’t talk about broad-based tax increases.”
Michelmore added that Democrats’ rhetorical focus should be less on taxes per se, and more on what a more robust government can give people. A smarter strategy, she said, is to “shift the conversation back to the question of what we can build, rather than what the cost of that is going to be.”
But eventually, Democrats will have to confront these fundamental tax policy questions. As part one of this series explained, just taxing the wealthy will not provide enough revenue to fund the Democrats’ agenda.
Making the feedback loop between taxes and government services more visible; providing assurances that government can deliver on its promises; and instilling trust that the tax system is fair are all going to be necessary to convince Americans to tax themselves. The question is the order of operations.