One key thing is that the Republican party has very much now become the party of the working class. In 2024, Kamala won those making less than $30k, and more than $100k. She won the poor and the professional class, but Trump won the working class, (and I assume) the extremely wealthy.
The Democrat’s real base right now is the professional class. Those with college degrees working white collar jobs. The poor also vote more for Dems, but they vote in fewer numbers based both on their poverty and their lower than average age.
We always assumed it was the rich vs everyone else, but it need not be that way. It could easily turn out to be the rich and the working class vs. the professional class and the poor. When someone like Bannon suggests raising taxes on the “rich,” he may not mean the actual ultra-wealthy, but the professional class.
And there is a form of taxation that could be implemented to fall on the professional class the hardest - targeting the tax advantages of 401ks and IRAs. That seems the most obvious target. Just raising income taxes would have to also hit the rich, but taking away a lot of the tax benefits of retirement accounts would mostly hurt the professional class, the white collar workers with bachelors and graduate degrees. The doctors, the lawyers, the engineers, the college professors, etc. The truly wealthy don’t really rely on these accounts much, as they have limits on them that make them useless for storing tens of millions or more in. And the working class? Well if you have a household income of $60k, odds are pretty low you’re going to be maxing out your 401k contribution.
The retirement accounts seem the most likely targets of this. The poor and working class don’t usually make enough to put substantial money away in these accounts, while their asset protections are a rounding error to the wealthy. Raiding 401ks and IRAs would be a way for them to raise taxes in a way that zeros in on the Democratic electorate and hurts them the most.
We could even see a very weird political landscape where 401ks and IRAs were raided to pay for social programs like health insurance subsidies, expanded subsidies for new parents, subsidized daycare, and other social spending meant to increase birth rates. They would sell it as “raising taxes on the wealthy to give to the working class,” while they would really be raising taxes on the professional class to pay for subsidies for the working class and tax cuts for the wealthy.
The white collar college educated workers are the heart of the Democrat’s current power base. They are the most likely targets of any Republican tax increases “on the rich.” And the easiest way to raise taxes on the professional class without also taxing the wealthy is to come after the retirement accounts.
And while some might say, “that would never happen, people wouldn’t stand for it. It would be the government going back on its word, people would be infuriated!” Well, I just come back to the end of Roe v. Wade. Republicans stripped civil rights from half the country, and the electorate responded by giving them full control of government. If you can strip the civil rights from half the population, stripping retirement account benefits, which far fewer people are actually able to really take advantage of, is minor in comparison.
401k and IRA protections are just tax policy. They can be changed at any time. A law could be passed tomorrow that said, “401k accounts are being wound down. All 401k accounts must be liquidated within the next five years and transferred to regular taxable brokerage accounts. This liquidation will be taxed like any other 401k or IRA withdrawal.” Then, everyone has to liquidate their accounts, and the full balance would be taxed as regular income. Not only would this give the government more long term revenue, but it would represent a massive short-term windfall. The treasury would bring in trillions as the government effectively seizes 20-30% of every 401k account in the nation. It would be a temporary windfall, but in the years of this one-time liquidation, it would likely even allow Trump to claim he actually balanced the budget. Anyone with sense would know it was a short-term stunt, but his base isn’t known for having a lot of sense.
One key thing is that the Republican party has very much now become the party of the working class. In 2024, Kamala won those making less than $30k, and more than $100k. She won the poor and the professional class, but Trump won the working class, (and I assume) the extremely wealthy.
The Democrat’s real base right now is the professional class. Those with college degrees working white collar jobs. The poor also vote more for Dems, but they vote in fewer numbers based both on their poverty and their lower than average age.
We always assumed it was the rich vs everyone else, but it need not be that way. It could easily turn out to be the rich and the working class vs. the professional class and the poor. When someone like Bannon suggests raising taxes on the “rich,” he may not mean the actual ultra-wealthy, but the professional class.
And there is a form of taxation that could be implemented to fall on the professional class the hardest - targeting the tax advantages of 401ks and IRAs. That seems the most obvious target. Just raising income taxes would have to also hit the rich, but taking away a lot of the tax benefits of retirement accounts would mostly hurt the professional class, the white collar workers with bachelors and graduate degrees. The doctors, the lawyers, the engineers, the college professors, etc. The truly wealthy don’t really rely on these accounts much, as they have limits on them that make them useless for storing tens of millions or more in. And the working class? Well if you have a household income of $60k, odds are pretty low you’re going to be maxing out your 401k contribution.
The retirement accounts seem the most likely targets of this. The poor and working class don’t usually make enough to put substantial money away in these accounts, while their asset protections are a rounding error to the wealthy. Raiding 401ks and IRAs would be a way for them to raise taxes in a way that zeros in on the Democratic electorate and hurts them the most.
We could even see a very weird political landscape where 401ks and IRAs were raided to pay for social programs like health insurance subsidies, expanded subsidies for new parents, subsidized daycare, and other social spending meant to increase birth rates. They would sell it as “raising taxes on the wealthy to give to the working class,” while they would really be raising taxes on the professional class to pay for subsidies for the working class and tax cuts for the wealthy.
The white collar college educated workers are the heart of the Democrat’s current power base. They are the most likely targets of any Republican tax increases “on the rich.” And the easiest way to raise taxes on the professional class without also taxing the wealthy is to come after the retirement accounts.
And while some might say, “that would never happen, people wouldn’t stand for it. It would be the government going back on its word, people would be infuriated!” Well, I just come back to the end of Roe v. Wade. Republicans stripped civil rights from half the country, and the electorate responded by giving them full control of government. If you can strip the civil rights from half the population, stripping retirement account benefits, which far fewer people are actually able to really take advantage of, is minor in comparison.
401k and IRA protections are just tax policy. They can be changed at any time. A law could be passed tomorrow that said, “401k accounts are being wound down. All 401k accounts must be liquidated within the next five years and transferred to regular taxable brokerage accounts. This liquidation will be taxed like any other 401k or IRA withdrawal.” Then, everyone has to liquidate their accounts, and the full balance would be taxed as regular income. Not only would this give the government more long term revenue, but it would represent a massive short-term windfall. The treasury would bring in trillions as the government effectively seizes 20-30% of every 401k account in the nation. It would be a temporary windfall, but in the years of this one-time liquidation, it would likely even allow Trump to claim he actually balanced the budget. Anyone with sense would know it was a short-term stunt, but his base isn’t known for having a lot of sense.