News reports this week have portrayed Democrats in Congress as slowly converging on a deal to pass a shrunken version of President Biden’s Build Back Better agenda. But the main centrist protagonist in those stories is Senator Joe Manchin, the crusty dealmaker who has long been identified as the Democratic party’s 50th and most pivotal vote. There has been scant reporting on Senator Kyrsten Sinema.
The Wall Street Journal today reports that Sinema “has told lobbyists that she is opposed to any increase” in taxes on high-income individuals, businesses, or capital gains. Her opposition is reportedly “pushing Democrats to more seriously plan for a bill that doesn’t include those major revenue increases.”
If this report is true, it would likely be a death blow to Biden’s social agenda. Senate rules require that creating or expanding any social program — health care, child care, education, or anything else — can only be made permanent if it has some funding source. If Sinema refuses to support any tax increases on the wealthy, there’s no financing available to come anywhere close.
Biden’s plan does have some other funding. One stream of income is beefed-up enforcement of taxes owed by the Internal Revenue Service. That plan is under pressure from centrist Democrats and likely to exist in shrunken form, if at all. The other is a proposal to allow Medicare to negotiate the cost of prescription drugs, which would save half a trillion dollars over a decade that could be used to cover new spending. But Sinema reportedly opposes that, too.
Politico has a more restrained version of the same report on Sinema’s position, leaving open the possibility of theoretically finding some way of taxing rich people other than the ones Democrats have been planning on. But even if she identifies such a method, it would start the arduous process of building consensus and then overcoming the inevitable lobbying response from scratch, probably dooming the entire process. CNBC’s Kayla Tausche likewise reports that Sinema has endorsed small, but not nonexistent, increases in rates on the wealthy. Either she has changed her mind or is telling different things to different people, but the upshot is that she has a wildly divergent position on taxing the wealthy than any other member of her caucus.
What makes her opposition to taxing the wealthy so peculiar is that it is not a public opinion winner. Democratic promises to raise taxes on the wealthy are one of the most popular elements of their plan. What’s more, Sinema voted against the Trump tax cuts — and those tax cuts completely failed to produce the promised increase in business investment that was their rationale.
The Democratic party’s main political asset is its willingness to make a very tiny number of people pay more money that can finance programs that benefit a very large number of people. That only works up to a point — at some level, you can raise taxes on the rich so high it fails to yield any new revenue — but there is no evidence the current tax code is anywhere near that level. Indeed, after the Trump tax cuts, the tax code for the wealthy has become scandalously lax.
Scattered reporting has also suggested Democrats are pondering a carbon tax. Doing so so would violate Biden’s promise not to raise taxes on any households earning less than $400,000 and open up every Democrat to devastating political attacks. For that reason, it seems impossible to imagine it passing Congress. The carbon tax seems like a desperate ploy rather than an actual legislative possibility. But it illustrates the extreme political peril Sinema is exposing Democrats to and the degree to which she is not pushing the party closer to the center of public opinion, but much farther away.
Democrats have torn their hair out trying to discern Sinema’s motives. In all likelihood, she has simply been persuaded by the arguments made by the rich people and lobbyists she is hanging around with constantly. But unless either the reports are wrong or she changes her mind, she is setting Democrats on a course for an utter debacle.