Will Trump Turn to Bannon's Tax-the-Rich Faux Populism to Save a Sinking Ship?
One faint sound you can hear emanating from the imploding Trump White House is the whispering of senior adviser Steve Bannon in the ear of his embattled boss: Go left, old man, go left.
This advice, first reported by the leftist scribes of the Intercept and the venture capital mavens at Axios, is to raise taxes on the rich. The Intercept also reports that Bannon advocates regulating the behemoths of the new internet economy, like Facebook and Google, as public utilities.
This provocative, perhaps even progressive messaging has been drowned out by the tsunami of criticism that hit the White House over the last week about the possible firing of special counsel Robert Mueller; Trump's rant to the Boy Scouts; the Pentagon's refusal to make policy via Twitter; and the foul-mouthed (and now-departed) Anthony Scaramucci.
But as the latest waves of indignation subside, Bannon’s ideas are sure to return.
The well-sourced exclusives by Intercept reporter Ryan Grim reveal how Bannon, the former Goldman Sachs executive turned right-wing media strategist, thinks Trump should respond to his deepening predicament: by attacking the Republican establishment with populist policy proposals to energize Trump’s working-class supporters, while seeking to peel off congressional Democrats who favor redistributionist government.
According to the Intercept, Bannon is pushing for tax reform to include a new 44 percent top marginal tax rate, hitting people who earn more than $5 million a year, with the revenue paying for tax cuts for everybody who makes less. Axios reported that Bannon favors a marginal tax rate "beginning with a 4." The highest marginal tax rate is now 39.6 percent. If enacted in law, the proposal would result in the highest marginal tax rates on wealthy Americans since 1986.
Whether Trump actually favors the idea is anybody's guess. The president signaled possible support for Bannon’s proposal in an interview with the Wall Street Journal. “If there’s upward revision,” he said, “it’s going to be on high-income people."
Within the day, a Trump aide shot down the idea on Fox News.
Could It Work?
In theory, Bannon’s strategy has a certain political logic.
Democrats have long argued that the wealthiest taxpayers could pay more. Even Hillary Clinton proposed raising taxes on the wealthy in the 2016 campaign, calling for a 4 percent "fair share surcharge" on those making more than $5 million a year. And the left is taking renewed interest in antitrust laws, viewing the new monopolies as a threat to broad-based prosperity.
Because the Intercept story did not flesh out any details of Bannon's thinking, it is impossible to know if Bannon favors new regulations that would protect competing firms and the public interest, or whether he is merely advancing a lobbying scheme of telecommunication firms that object to the internet giants’ support for “net neutrality.”
The proposition seems to be that Trump could reset his presidency and revive his legislative agenda with a fresh new approach to taxes and regulation that could win support from populist Republicans and progressive Democrats.
Typically for Bannon, the strategy is more clever than realistic, raising certain obvious questions like: Is any Republican constituency in favor of more progressive taxation?
Breitbart News coverage has not been hostile, but otherwise, the Republican base seems distinctly unenthusiastic. Bannon is seeking to "punish the wealthy,” says Susan Wright at Red State. The conservative NTK network likened Bannon’s proposal to Clinton’s fair-share surcharge, a killer talking point that anti-tax Tea Party conservatives are sure to echo.
"Bannon’s proposal will surely inspire some chatter as Washington gets ready to debate tax reform," said NTK, which was created by Republican opposition research firm America Rising. "It’s unclear, though, if conservatives on Capitol Hill will be on board with a tax hike similar to one proposed by Hillary Clinton in 2016."
"Unclear" is Washington's way of saying, "virtually impossible."
In practice, Bannon and Trump have demonstrated zero ability to guide any kind of legislation through a friendly GOP Congress, much less elicit and maintain support from hostile Democrats.
Remember Bannon’s trillion-dollar infrastructure jobs program? In November, he predicted it would be the "foundation of a new political movement." Some Democrats were actually worried about the idea. In power, Bannon delivered a proverbial nothingburger.
When Trump finally got around to scheduling “infrastructure week” five months into his presidency, he proposed the privatization of the Federal Aviation Administration, a warmed-over Republican proposal that wouldn’t create any jobs and has less appeal every day. (Last week Captain Chesley Sullenberger, the commercial airline pilot whose calm heroics over Manhattan have come to personify aviation safety, announced his opposition to Trump’s plan.)
The conservative think tanks and lobbyists of Washington are well equipped to stifle populist economic policies that they oppose. When Trump backed an import tax to stimulate domestic manufacturing and create American jobs, the combined forces of the Koch brothers and Walmart killed the idea. Trump hasn’t mentioned it since.
From a conservative point of view, Bannon’s proposals are not a plausible gambit to wrongfoot Democrats; they are a unwelcome nuisance in an already troubled process. When pressed to comment by the Daily Caller, Paul Ryan made clear he doesn’t care for Bannon’s input.
“The last thing I’m going to do is negotiate tax reform in public," Ryan said. "... Our tax writers are the ones that are going to be writing this bill. We’re working to get a consensus as a framework, so that our tax writers, Ways and Means, and Senate Finance can actually go write this legislation.”
In other words, Ryan is negotiating privately with the White House with the goal of making sure Republican lawmakers, and not Bannon, determine the substance of the administration’s tax bill. Ryan’s reference to “our tax writers” was a telling indicator that he doesn't think Bannon is on the GOP team.
With White House chief of staff Reince Priebus gone, the growing fear among congressional Republicans, according to Politico’s Tim Alberta, “is that Trump will turn against the party, waging rhetorical warfare against a straw-man GOP whom he blames for the legislative failures and swamp-stained inertia that has bedeviled his young presidency.”
Bannon’s populist daydream is less a policy proposal than a proposal for rhetorical warfare. It is not a plan to redistribute income but a weapon to bludgeon globalists. It's not a sign of populism, but the sound of the Republican civil war now underway.