Republicans Have a Middle Class Agenda. Now It’s Time to Sell It

President Obama begins almost every speech these days by reciting the economic indicators that work in his favor. The unemployment rate is falling, the manufacturing sector is adding jobs, the housing market is rebounding, and on and on it goes. But that’s far from the full story. For instance, you’ll never hear him brag about wages because they’ve been steadily falling under his administration.

Indeed, the wage figures from 2013 are startling: 40 percent of Americans made less than $28,031 and 39 percent of workers made less than $20,000, the equivalent of a full-time $10 an hour job. There’s little indication that 2014 will be much better. The most recent jobs report showed that wages actually declined by 5 cents an hour, pulling the annualized rate down to a measly 1.7 percent growth, below the rate of inflation.

To be fair, President Obama is far from the only president who has overseen a period of stagnant wages. Indeed, over the last five decades real wages (which take inflation into account) have been relatively flat, or even falling, for most workers. Of course, wages don’t tell the whole story; a lot of money that employers could have been pouring into wages has instead been eaten up by benefit costs—health insurance being the primary one—which have risen about 60 percent since 2001.

The question then is why President Obama is so keen on taxing the middle class, a group who has fared particularly poorly in the recession and subsequent “recovery.” Bloomberg’s Megan McCardle has an answer:

[T]he very fact that we are discussing taxation of educational savings — redistributing educational subsidies downward — indicates that the administration has started scraping the bottom of the barrel when seeking out money to fund new programs. Why target a tax benefit that goes to a lot of your supporters (and donors), that tickles one of the sweetest spots in American politics (subsidizing higher education), and that will hit a lot of people who make less than the $250,000 a year that has become the administration’s de facto definition of “rich”?

Presumably, because you’re running out of other places to get the money.

Sure, it may make much more political sense to tax the heck out of the exorbitantly wealthy. But, as McCardle notes, that group is already facing a marginal tax rate of around 45 to 50 percent. In other words, fifty cents out of every additional dollar of income they earn is going to the government. At some point there is no more money to squeeze because those earners will simply decide that the extra work just isn’t worth their time, literally or figuratively.

That requires President Obama to dig deeper into his bag of taxing tricks in order to fund his priorities. If the State of the Union was any indication he’s set his sights on investment vehicles for the middle class, although now that the public caught on he’s had to embarrassingly backtrack on his plans.

That Democrats are so tied to wealth redistribution schemes as a method of cobbling together some semblance of a middle class agenda presents a tremendous opportunity for Republicans to promote their ideas. Admittedly, the party has not done a great job to this point. As James Pethokoukis writes for The Week:

But weirdly, much of the GOP is reluctant to explicitly target the middle, either with rhetoric or ideas. It’s not necessarily that Republicans don’t care about the 99 percent. They just think their way is better than the Democrats’ way, even if it’s less obviously and directly helpful to the middle class. This is the party that believes “a rising tide lifts all boats,” that faster economic growth is the best path to shared prosperity.

That’s true so far as it goes, but recent years have seen economic mobility stalled and economic gains concentrating at the top. Fortunately, many Republicans are already hard at work to present realistic options to address problems facing the middle class. Representatives and Senators have offered up ideas on pro-growth, pro-family tax reform, health care transformation that really bends the cost curve, K-12 education improvements that expand opportunity, college cost and quality improvements, bipartisan ideas on energy, and a complete anti-poverty platform.

Republicans have the ideas and the opportunity. Now it’s time to get out there and let people know.