The rich have fared well under Republican presidents. Ronald Reagan engineered two huge tax cuts for the wealthy in the 1980s that cut the highest marginal rate from 70 percent to 28 percent. George W. Bush also persuaded Congress to pass two tax bills in the early 2000s that profited the wealthy, the sweetest of which reduced the capital gains tax from 38.6 percent to 15 percent. Donald Trump’s 2017 tax cuts were confined to a single bill, but it, too, favored the rich. The top corporate tax rate was slashed from 35 percent to 21 percent and the estate tax exemption was raised to $22 million — a change that benefits fewer than 1 percent of Americans.
Tax cuts for wealthier Americans are not an easy sell, but the three Republican presidents marketed them as a godsend for the middle class. They were either bad at math or talking out both sides of their mouth. The Bush tax cuts, for example, gave the top 1 percent of earners $50,000 a year on average in tax savings, compared with less than $1,000 a year for those of middle income and less than $100 a year for those of low income. Since 1980, Republicans have engineered the largest tax giveaway in the nation’s history, placing the interest of the wealthy above those of middle- and working-class Americans.
The tax cuts were paid with borrowed money, and all three tax-cutting Republicans presided over an increase in the budget deficit as a percentage of GDP. The two Democratic presidents sandwiched between them, Bill Clinton and Barack Obama, oversaw a decrease in the deficit — an issue Republicans have long claimed as a priority.
The Republicans were once seen as the party of fiscal discipline. Republican voters still see their party in that way, but they are the only ones who do. Independents — the voters who hold the balance of power in national elections — side with the Democratic Party when asked which party has done more to hold down the budget deficit and national debt.
The GOP’s tax-cutting spree has also eroded its treasured image as the party of the middle class. Independents believe by a lopsided margin of more than 2 to 1 that the Republican Party sides with the rich rather than with the middle class.
Republicans have set themselves up for a no-win encounter. When the Democrats are next in power, they will probably sponsor a bill to cut middle-class taxes and pay for it by raising taxes on the wealthy. Such a bill would be hugely popular. It would put Republican lawmakers in a bind. If they oppose it, they’ll be seen as enemies of the middle class. If they support it, they’ll antagonize their wealthy backers.
Working-class whites — who vote 2 to 1 Republican and account for half of the GOP’s votes — are at risk from the GOP’s tax policies. Their loyalty to the GOP rests chiefly on the politics of resentment that began with Richard Nixon’s Southern strategy. Any party that can get its working-class loyalists more riled up about an NFL player taking a knee during the national anthem than about their need to work two jobs in order to pay the bills has figured something out. But scapegoating doesn’t work forever, and class awareness is rising in America, propelled by income inequality, wage stagnation, growing personal debt, and high housing and health insurance costs.
Republican voters are united on cultural and national security issues but divided on economic issues. Lower-income Republicans are twice as likely as higher-income Republicans to favor taxing the rich and more than twice as likely to believe that unfair policies determine who is rich and who is poor in America. Slippage appeared in the 2018 House elections when 1 in 7 Republicans with economically progressive views voted Democratic — four times the defection rate of other Republicans.
It’s impossible to say when the breaking point might come, but the odds are increasing that Republicans will face a day of reckoning for their four decades of ponying up to the rich.
Thomas E. Patterson is a professor at the Harvard Kennedy School’s Shorenstein Center. This series is adapted from his book “Is the Republican Party Destroying Itself?”