Believe it or not, the “limousine liberal” tag was first used by a Democrat to describe a Republican in a New York City mayoral campaign during the late 1960s. Back then, the Democratic Party was still largely cemented as America’s working-class party. Today, it’s an entirely different story. Few policies highlight that more right now than those of the SALT reform proposal now before Congress. Yes, the constant barrage of virtual signaling by the left is the clearest signal of all, but those antics are far too numerous to address in a single column.
SALT simply means state and local tax deductions for federal income taxes. Republicans and Donald Trump capped the deductions at $10,000 under their tax reform legislation in 2017.
Simply put, the deductions were a way for the wealthy in high-tax states and localities to dramatically lighten their federal tax burden. The region with the largest filers for the deduction is, predictably, in states such as California, as well as the more liberal and affluent areas of the Northeast.
Despite Alexandria Ocasio Cortez’s “Tax the rich” dress she donned for the MET Gala in September, House Democrats are going to the mat for a tax reform plan that, according to the nonpartisan Tax Policy Center, will be a boon for many of America’s highest earners. Contrary to TV appearances by the wealthy liberals demanding higher taxes, it turns out many aren’t so keen on the idea if it includes them.
The Tax Policy Center adds that 96% of the tax cut under SALT reform would go to those in the top 20% of household incomes. Predictably, Democrats have been calling it a middle-class tax cut in their news releases, yet it would only benefit about 3% of middle-class households.
It’s much easier to love one’s high tax haven if the taxes can be offset on the federal side. It’s a liberal dream: Limitless virtue signaling about the need for high taxes without bearing the total cost of those taxes.
Overall, Democrats in high tax blue states are unwilling to consider spending restraint and tax cuts that have proven so beneficial to states like North Carolina. Their answer to their own high tax climate is passing off the inconveniences to the feds. And then ask for a federal bailout when that gravy train is interrupted. Obviously, the real need is for a simpler and less burdensome federal tax code overall, but nobody’s holding their breath, given all the carveouts included in a tax code of more than 75,000 pages.
Still, an even bigger story is the transformation of the Democratic Party as an entity that protects the wealthy. Shifts and political realignment have almost entirely unmoored the Democratic Party from its working-class roots. Trump capitalized on that fact better than any other politician in his 2016 presidential campaign. White working-class voters who wouldn’t support John McCain or Mitt Romney came out in droves for Trump, particularly in America’s Rust Belt.
Biden’s no-new-taxes pledge for those under a whopping $400,000 household income signals the vast protection for wealthy Americans in regions with a high cost of living, places where their party thrives today. Obama pledged a considerably lower cap of $250,000 during his campaign. According to the left-leaning Institute for Taxation and Economic Policy, Biden’s capital gains tax reform plan, which aims to make the rich pay their fair share, impacts less than 1% of American taxpayers. That’s not a lot of revenue for a nation closing in on $30 trillion in debt.
The Democratic Party is comfortable counting as their base the super-wealthy, other countless leftwing special interest “victim” constituencies, and perpetually aggrieved groups. In the 1990s, Blue Dog Democrats were still a massive force in Congress. Today, they are virtually nonexistent.
Of course, the two-party system and Republican missteps and mistakes make Democrats even more viable. Whether one calls them limousine liberals or champagne socialists, they are now the dominant force in Democrat politics. Since the policies no longer even pretend to match the rhetoric, don’t be surprised to see even more virtue signaling going forward.
Ray Nothstine is Carolina Journal opinion editor.
This article first appeared in the October / November print edition of Carolina Journal.