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Donald Trump won a majority of voters without college degrees last November in part by promising a presidency that would bring “economic relief to our citizens.”
Now comes the hard part.
Trump’s arrival in office comes at a tipping point for a Republican Party he’s reshaped in his image. He’s outlined a number of populist economic goals, vowing to get rid of taxes on tips and overtime pay while weighing a “significant expansion” of the child tax credit and new tariffs that he sees as a boon to US manufacturing. His populist allies have gone further: Steve Bannon told Semafor last month that it was time to raise taxes on the wealthy and corporations.
But Trump is now avidly pursuing new corporate partners and investments that line up with a fiercely pro-business — and conventional — Republican agenda, hosting tech industry chiefs at Mar-a-Lago as he forges a close alliance with Elon Musk and rolls out a $100 billion SoftBank investment. The contrast between Trump’s pro-working class talk and his pro-business actions has some of his own supporters asking whether any of his more populist ideas will end up becoming real administration policies.
The choice between those visions is “the million-dollar question, and in my opinion the top story,” one person in Trump’s orbit told Semafor. “Because, to answer anything else, we’ve got to know the answer to that.”
On Capitol Hill, generations of Republicans have seen a vote for any tax increases as politically perilous. A few of them are still open to taking the risk as they craft a bill extending Trump’s first-term tax cuts.
“We’re legitimately looking at, should we adjust the corporate rate from, say, 21% to 23%,” Rep. Clay Higgins, R-La., told Semafor.
But most GOP lawmakers sound like Rep. Andrew Clyde, R-Ga., who said simply: “No, no, no. Negative. I don’t believe in raising taxes.”
One of Clyde’s fellow conservatives, Rep. Tim Burchett, R-Tenn., said he’s never “supported raising taxes on anybody” and would have to look closely at any bid to raise the corporate rate.
Burchett also aired a sentiment that’s somewhat common among Hill Republicans: Simply making good on their bigger promises as a party, as opposed to any specific populist agenda, will be enough to keep working-class voters in their corner.
“If the Republicans will just keep their word — reduce the size of government, fix the wall, reduce our spending, do all those things we said we were going to, decentralize government, close down some of these worthless departments and make some cuts at the Pentagon — I think, if we just do all those things, I think we’ll be okay,” Burchett said.
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Early tension is already high between self-styled America-First populists and more tech-friendly conservatives, key camps of Trump’s base that are broadly led within the MAGA ranks by Bannon and Musk, respectively.
The first schism came at the end of last month over H-1B visas for highly skilled workers. More immigration-skeptical opponents like Bannon and right-wing agitator Laura Loomer argued that wealthy tech magnates like Musk support the visas because they can bring in foreign workers who cost less, while H-1B backers like Musk and Vivek Ramaswamy touted the benefits to the US from admitting immigrants with higher education.
After that Bannon-Musk clash, Trump said he’s “a big believer” in H-1B visas — a switch from his stance in 2016. That didn’t settle things down; more recently, Bannon told an Italian newspaper he would fight to limit the “evil” Musk’s access to the Trump White House.
Beyond the duo’s personal animus, however, are other opportunities for the broader party to embrace or downplay Bannon’s call for a more working class-friendly GOP.
One of those chances comes in the form of Trump’s campaign plan to abolish taxes on tips, which some Republican lawmakers seem open to embracing so long as guardrails are installed to ensure lower-income taxpayers see a benefit.
“You have to define what is a tipped worker, or else we’ll have all of these hotshot lawyers taking tips instead of retainers,” Rep. Nicole Malliotakis, R-N.Y., told Semafor.
Other Republicans see a successful extension of Trump’s 2017 tax cuts, which lowered rates for individuals as well as corporations, as a potential boost to working-class taxpayers that’s bigger than any of Trump’s specific pre-election rhetoric.
Rep. Buddy Carter, R-Ga., noted that “The average Georgia family makes $75,000 a year. If we do not [extend] the Tax Cuts and Jobs Act, they’re going to have an increase of $1,500 a year.”
Asked about higher taxes on the wealthy, Carter said: “I don’t think that’s a good idea, but, you know, perhaps in some kind of context, it might be.”
The View From Sen. Josh Hawley
Both Republicans and Democrats in Congress have championed extending the child tax credit, which the Trump tax cuts hiked in 2017 and outgoing President Joe Biden later extended. During the 2024 campaign, the parties jostled again to court working-class voters by touting the credit; at the time, Vice President-elect JD Vance said he’d like to raise it to $5,000.
For Sen. Josh Hawley, R-Mo. — who’s found common ground with progressive Elizabeth Warren on plans to rein in the pharmaceutical industry and curb bank CEO pay — a bigger child credit is his party’s best chance to help the working class.
Raising taxes on the wealthy would be “pretty hard” to get into a party-line tax bill, Hawley told Semafor, and his support for that idea “would depend on what it is.
“What I’m more interested in is getting very significant tax relief for working people and working families with the child tax credit, right?” he added. “And I’ve said to my colleagues, like, I’m open to other ideas, if they’ve got other better ideas about how to deliver real tax relief to people who are not paying a bunch of income taxes.”
Kadia and Shelby’s View
Most tax proposals Republicans are considering will be expensive, and (as is typical) it’s going to be hard to get any bill through Congress. It’s even tougher to see the party passing one that violates its unofficial code against raising taxes, even on the wealthy and corporations.
Which, in turn, will put the onus on Democrats to brand the future GOP tax plan as unfriendly to the working class.
But beyond specific tax clashes, the H-1B visa battle shows that the larger divide between anti-elite populists like Bannon and the Musk wing of the party could end up defining Trump’s second term.
Burgess Everett contributed.
Correction: Due to an editing error, this story initially included the wrong title for Vice President-elect JD Vance.