Why is Trump considering increasing taxes to millionaires? | Alex Bronzini-Advender

“I I love the concept, ”said Donald Trump recently to Time Magazine of a proposal circulating in his cabinet to raise taxes on those who earn over $ 1 million.

Only a few presidential administrations have killed holy cows faster than that of Donald Trump. But really that Is Shocking: a session Republican President Praise a proposal to raise taxes on the rich, and only added the slight restriction that it would be shot by the people disadvantaged in the fake news. A tax increase, as Trump apparently believes, would be durable as policy But not as a policy.

Trump says something similar from almost every idea that is thrown in his way, and commentators have long observed that the safest way to change the opinion of the president is to be the last person who spoke to him. Perhaps more interesting than Trump's judgment on this topic is that leading members of his cabinet have approved a similar tax increase. Long-standing anti-tax activists are panicked. As a lever Recently there is every reason to assume that serious cracks occur in the Republican anti-tax coalition.

First: Why? The proposal itself is an idea of ​​the conservative American compass think tank, which suggested in a white book in June 2024 to increase taxes on the rich in order to pay off American government debt. “The constituency and the basis of the Republican Party are changing,” said Oren Cass, founder of American Compass, to The Atlantic in April. To extend the tax cuts of Trump in 2017 by simply adding $ 5 to American public debt, Cass' words would be “pitiful, embarrassing and completely cheating”.

Like Cass, Steve Bannon has long been annoyed about the contradiction between the populist attitude of the Maga movement and her government reigned. “This is a realignment of type 1932 if we do this right,” Bannon told Semafor in December. “You have to break this attitude that the share buyback is okay, that crony is in order and the tax breaks are in order for companies, then you will waste a unique moment in history.”

The origins of the proposal may be to the heterodox politics of movement of movement, but-confusion, are not only self-proclaimed economic populists such as JD Vance. According to reports, mainstream -conservative such as Russell Vought, Director of the Office for Management and Household and a Stalwart of the Heritage Foundation, and Scott Bessent, a former hedge fund manager and Trump's finance minister.

Their voices confuse the expectation that the “realignment” of the party is driving the collapse of the Republican consensus on tax cutting. Instead, it is something much more prose: The Trump government's business team has recognized that an unusually large amount of American debts has to be refinanced this year.

The Trump government officials hoped that Trump's announcement after Trump's tariff tariff tariff -tariff will obtain announcement by a staggering stock market by relocating the capital in US finance bonds. Such a step as they argued would increase bond prices and achieve the returns – since the bond returns decrease with increasing prices, since the fixed interest payments are less attractive compared to the purchase price. Lower yields, in turn, would make the government's credit costs easier.

And for a moment the plan seemed to work. The 10-year-old return sank and Trump observed her as confirmation of his tariff strategy. But the movement didn't last. Instead of transforming into bonds, investors fled both in stocks and government bonds, which were frightened by the inflation pressure by tariffs, fiscal instability and increasing geopolitical risk. The result was a severe decline in demand for state debts, an increase in income and the higher credit costs – exactly the result that the White House wanted to avoid.

The only strange trick of the Trump government for refinancing at lower costs than necessary has failed. Now the Republicans have two remaining options: lower the expenses or easily reduce the control cutters.

What does this mean for the future of American conservatism? Regardless of whether the Trump administration increases taxes to the rich -it will probably not -the fiscal compact, which underpins American conservatism, is at least not sustainable at short notice.

Since Ronald Reagan's presidency, conservatives have largely succeeded in reducing taxes on the rich without pursuing any correspondingly low austerity measures. The public's debt has had the difference. “Reagan has proven that deficits are not a role,” said Dick Cheney reported to the finance minister when the Bush government aimed for a second round of tax in 2003. At least next year, deficits will be very important. And the Republicans choose to solve their dead end, a critical flank of the Trump coalition-Entweder that have to be rich or the increasingly working base of the party numbers.

When the Republican fiscal bargains breaks apart, the GOP needs to need a different way to combine its increasingly different basis. The Democrats suffered from a similar problem for a long time: In 2007, the statistician Andrew found that the true secret of the American voice behavior did not make the voters of the working class drifted towards the GOP at this time overvalued effects, but that rich and poor equalized their lot with Democrats. The Democrats have solved this, but to mixed results. Instead of taking over the deeper structural issues of economic inequality, they focused on the defense of existing programs such as social security and medicar, promoted the measured reforms in the name of racial justice and the protection of rights to abortion and same -sex marriage.

Perhaps the division of the tax -cuting coalition leads the Republican Party to try this compromise A L'Envers. Just as the Democrats had implemented thorny economic issues by gathering for the defense of the widely recognized civil rights, the GOP could turn from its long -term economic bargain – the one who has defined his policy since Reagan – and instead double his campaign to undermine the same rights. When deepening his abuse against non -citizens, racist and sexual minorities and activists in the name of the Palestinian rights, the Trump government could perceive itself as a restoration of a party for a party that is painful.

It is too early to tell it. However, it is certain that the tax -cutting coalition, as we know, has not become deeply sustainable. Tax cutting edges once the Republicans uniformly. In order to force Trump to choose between the taxation of the upper or deeper austerity measures for the soil, it is now threatening to blow them apart.