In order to understand the impact of left-leaning American politics, this report looks at how American politics has moved more left-leaning over the past decades and how the trend may continue in the future. With evidence suggesting that Americans are becoming more left-leaning, this report also looks at how this will impact tax policy, specifically tax burdens on the wealthy. And finally, this report also provides a broad analysis of how this left-leaning trend will impact American public policy in general.
American Politics Moving Left
- In recent years, American politics has become more polarized with studies suggesting that both parties are move away from the center. Despite more Americans identifying as conservative (37%) than moderate (35%) and liberal (24%), the Democratic presidential candidate Joe Biden received 51.3% of the votes in the 2020 election while incumbent Donald Trump received 46.8%. This suggests that a larger share of those identifying as moderate might have voted Democratic in the 2020 election. Thus, this raises the question of how moderate are self-identified moderates.
- The share of party identification used to split evenly (45%) between the two parties in 2011. By 2019, Democratic leaners accounted for 47% while the share of Republican leaners dropped to 42%. Note that the shares have fluctuated over the past decades, however. But overall, the Democratic Party has held a lead over the Republican Party. The figures for self-identify political ideology presented above may be misleading as despite the fact that there are more self-identified conservatives than self-identified liberals or moderates, there have been more Democratic voters than Republican voters. Therefore, in order to understand how American voters are moving, it is important to look at how their two parties are moving. Figure 1 shows that, while the Republican Party has moved to the right since 2000, the movement is smaller than that of the Democratic Party for the same period.
- According to an analysis of political parties’ positions by Manifesto Project, the Democratic Party used to hold positions similar to those of center-right parties in other rich democracies in 2000, 2004 and 2008. However, the party began shifting left starting from 2012. In the 2020 Democratic presidential primary, front-runners presented policy proposals that were more left-leaning than the party’s positions in 2016.
- The figure below, which tracks the positions of parties’ manifestos, shows that the Democratic Party had moved to the left by 2016, resembling left-leaning parties in Europe. Note that as Europe has been historically more left-leaning than the United States, the median party is skewed to the left. Even with that benchmark, the Democratic Party has crossed into the line, resembling the British Labour Party.
- Although Biden has been known as a moderate, his policy positions in 2020 election were not–at least in comparison to the previous Democratic presidential candidate Hillary Clinton. An analysis by McClatchy suggests that “[o]n nearly every major issue, Biden has either exponentially increased the scope of what Clinton proposed or advocated for new ideas that most Democrats would have up until recently considered fringe.” For example, Clinton proposed a $60 billion plan to fund clean energy in order to make the United States 80% carbon free by 2050. Biden, on the other hand, proposed spending of $1.7 trillion to achieve net zero carbon emissions by 2050.
- While this seems to suggest that Biden has turned from a mainstream politician into a radical left, he in fact is moving with his party. According to Pew Research, the share of Democratic voters who consider themselves liberal (including liberal and very liberal) has increased since 2000 while the share of Democratic voters identifying as moderate has declined from 45% in 2000 to 38% in 2019. Most noticeably are white Democrats with college degrees who are more likely to describe their views as liberal.
- According to a YouGov poll in 2019, 70% of millennials and 64% of Gen Z are somewhat or extremely likely to vote for a socialist. The same poll finds that 50% of millennials and 51% of Generation Z have a somewhat or very unfavorable view of capitalism, increases of 8 and 6 percentage points, respectively, from 2018. Some argue that young people’s left-leaning views reflect their age and tend to change as they grow older. However, this view often ignores the fact that millennials are defined as those born between 1981 and 1996, meaning the youngest of the group are 24 and the oldest are approaching 40. These are grown-up adults, many of whom already have children. This suggests by the time they are already well into their adulthood, the vast majority of millennials are still leaning towards socialism. With millennials and Gen Z projected to outnumber older voters in 2028, this trend means that American politics will likely continue to move to the left in the future.
Impact on Taxes
- The majority of American adults (59%) believe that the government should do more to solve problems, according to Pew Research. This suggests that more Americans are demanding bigger roles of the government. Consequently, this would require more taxes.
- This view is particularly pronounced among Democrats and Democratic leaners, 82% of whom say the government do more to solve problems, an increase from 68% in 2015. The increase, however, is not only among Democrats. The research finds that 32% of Republicans believe the government should do more, also an increase from 23% in 2015. This is consistent with the trend presented in the previous section indicating that Americans are moving to the left.
- In terms of government size, the majority (52%) say they want bigger government providing more services. The overwhelming majority of Democrats (76%) also prefer bigger government providing more services. The support for bigger government among Democratic voters are very high, even those self-identified as moderate or conservative (70%). As the Democratic Party has been holding a lead recent elections (both for the House of Representatives and the White House), this could suggest a country leading towards a bigger government and hence higher taxes.
Tax Burdens on the Wealthy
- According to Pew Research, 58% Americans say that tax rates on household income of more than $250,000 should be raised either a lot or a little. About 22% say tax rates on income over $250,000 should be kept the same as they are now, while just 16% think rates should be lowered either a lot or a little. Of all Democrats, 71% say tax rates for this income bracket should be raised.
- During his presidential campaign, Biden proposed the federal tax rate for top earners from 37% to 39.6%. His proposal also included subjecting earnings over $400,000 to the Social Security payroll tax, which is currently limited to $137,700 of earnings. According to the Urban-Brookings Tax Policy Center, the top 1% earners could see an estimated average 15.9% reduction in after-tax income.
- In addition, Biden also proposed an increase in the capital gains rate to 39.6% for taxpayers with income over $1 million. Currently, the highest long-term capital gains rate is 20%.
- Whether these plans turn into reality or not will largely depend on who will take control of the Senate, which will be determined by the two runoff race in Georgia. But one thing is clear: raising taxes on the wealthy is on the agenda of the Democratic Party. Since the majority of American public continues to move to the left, this suggests sooner or later such tax policy will likely be implemented. As mentioned with the previous section, Biden moves with his party, which continues to hold a lead. His tax proposals reflect the movement to the left by the Democratic voters and Americans as a whole.
How Far-Left Politics Will Impact Public Policy
- As mentioned in previous sections, Biden, previously known as moderate, as adopted more left-leaning policy platform. The main reason is his party voters, and the American voters overall, are moving to the left. This impact will go beyond tax policy. As support for left-leaning ideas grow, politicians will likely adapt more left-leaning policy platform to win elections. For example, Biden wants to abolish death penalty–while Clinton wanted to preserve it for certain circumstances.
- With millennials and Gen Z overtaking older generations, the shift to the left will also mean higher pressure for free university tuition. Currently, 81% of Democratic voters support making tuition at public colleges and universities free. The majority (55%) of them are also skeptical of the link between hard work and success, suggesting that there will likely be less support for merit-based policies.
- The shift to the left has also influenced corporations, who will in turn influence public policy. For example, Netflix employees have sent 98% of their political contributions to Democrats. Big tech not only support Democrats more, but they also tend to support more left-leaning Democrats as data from their political donations show that they sent more money to Bernie Sanders and Elizabeth Warren than Joe Biden. The support from large corporations may also cement the Democratic Party’s lead, allowing it to neglect more moderate voters while catering to their left-leaning voters.
As data over the last decade shows, the American public has been moving to the left. While polarization is seen in both parties, data on policy positions show that the Democratic Party has moved much farther to the left. Consequently, public support for higher taxes, particularly on top earners and the wealthy, has increased in the last decade. Evidently, such a shift has also reflected in the policy proposals of Democratic presidential candidates, including Joe Biden, who is generally considered a moderate. As far-left ideas go mainstream, the impact will go beyond tax policy. Increasing support for social programs, especially among younger generations who will outnumber their older counterparts in the near future, means that the United States will likely see even moderate and mainstream politicians advocating and adopting far-left public policy.Sources