Democrats face an identity crisis over taxes: From the Politics Desk

Welcome to From the Politics Desk, a daily newsletter that brings you the NBC News Politics team’s latest reporting and analysis from the White House, Capitol Hill and the campaign trail.

Subscribe to read this story ad-free

Get unlimited access to ad-free articles and exclusive content.

In today’s edition, Sahil Kapur digs into an emerging debate among Democrats with big implications for the future of the party. Plus, we have the top lines from President Donald Trump’s news conference as the Iran war stretches into its sixth week.

Sign up to receive this newsletter in your inbox every weekday here.

— Adam Wollner

---

Democrats face an identity crisis over taxes

Analysis by Sahil Kapur

Tax cuts have become the hottest new policy idea among Democrats, with 2026 gubernatorial candidates and potential 2028 presidential hopefuls jumping on the bandwagon with new proposals.

Sen. Cory Booker, D-N.J., seeks to create a federal tax exemption for up to $75,000 in income for married couples. Sen. Chris Van Hollen, D-Md., wants to set that figure at $92,000.

In the California governor’s race, Katie Porter is proposing to wipe out state income taxes for families making up to $100,000 per year.

And in Georgia, gubernatorial candidate Keisha Lance Bottoms is campaigning on “eliminating state income taxes for teachers.”

The ideas are ultimately an attempt to address growing economic pain at a time of stubborn inflation and wages failing to keep pace with the rising costs. Of course, Democrats still support taxing the wealthy and large corporations, but they say the rest of America deserves a break.

The trend has sparked a backlash from both centrist and progressive policy experts with one calling it a “wonk revolt” and a “Democratic Cold War.”

These experts argue that the math cannot possibly add up if Democrats keep pursuing tax cuts while also calling for an expanded social safety net.

“It’s highly unlikely Democrats are going to get enough revenue from that group to do everything they want to do, whether it’s child care, paid leave, furthering the child tax credit, Medicare expansion,” said Zach Moller, senior director of economic policy at the center-left Third Way.

Others raise a more existential problem: How can Democrats make the case for government programs if they treat the taxes that fund them as punishments?

“It is a remarkably condescending attitude to take with the American people,” said Vanessa Williamson, a senior fellow at the Urban-Brookings Tax Policy Center and the author of “Read My Lips: Why Americans Are Proud To Pay Taxes.”

“How are you going to go to the American people and say, ‘Government is worthwhile,’ but then say, ‘Don’t worry, you don’t have to pay for it?’ That the democratic system is a good one, but not so good that it’s worth investing your own money in?” she said.

At the heart of the debate is a decision for Democrats about how they see the future of their electoral coalition. Ever since Donald Trump came on the scene in the 2016 election, Democrats have unintentionally inherited a slew of former Republican voters who loathe MAGA-style politics but tend to favor lower taxes — think well-educated suburbanites who liked the Bushes and Bob Dole.

Now those voters are part of the Democratic coalition, with many voting in the party’s primaries. And candidates looking to gain favor have an incentive to appeal to them.

It’s a high-stakes policy fight within the Democratic Party that’s likely to play out in the 2028 primaries when they chart a course for the post-Trump era.

At least one potential White House contender, Rep. Ro Khanna, D-Calif., is laying down a marker early against the growing antipathy toward taxes within his party.

“Democrats need to offer a vision of the state that provides health care, education and child care and asks each of us to do our patriotic duty in rebuilding our communities and nation,” Khanna told NBC News. “We should argue from an FDR frame that believes in the role of the state to provide essential services to Americans, not the Reagan frame that believes government is the problem and taxes are evil.”

---

Trump threatens to jail journalists in hunt to find leaker of Iran fighter jet story

By Jonathan Allen and Peter Nicholas

President Donald Trump threatened to jail journalists at the media outlet that first reported a second airman was missing following the shoot-down of an American fighter jet in Iran on Friday.

Both the pilot and the “back seater” were recovered by American forces in what the president, Defense Secretary Pete Hegseth and Joint Chiefs of Staff Chairman Dan Caine described as separate, daring operations during a White House news conference this afternoon.

The pilot was recovered within several hours, while the second airman was stranded in Iranian territory until early Sunday, when U.S. forces landed and rescued him.

Trump said that he would pursue whoever leaked information about the second airman — which the U.S. government had hoped to keep secret in order to prevent him from being captured or killed by Iran — and pressure the news media to assist in that investigation.

“We think we’ll be able to find it out,” Trump said. “Because we’re going to go to the media company that released it, and we’re going to say, ‘National security. Give it up or go to jail.’”

A White House official declined to name the news outlet in a text exchange with NBC News, citing a desire to avoid tipping off the journalists.

Strait of Hormuz: Trump also reiterated his threat to destroy Iran’s civilian infrastructure if Tehran does not reopen the Strait of Hormuz, a key shipping channel for the world’s supply of oil and other goods. Trump said that Iran has until 8 p.m. ET Tuesday to reach a deal acceptable to him or the U.S. military.

“The entire country could be taken out in one night, and that night might be tomorrow night,” Trump said.

The war with Iran is now entering its sixth week, and Trump indicated he is willing to end it — if he can strike a deal with Iran. If not, he said, he will target power plants and bridges in a withering attack that would hurl the country back into the “stone ages.”

“Very little is off-limits,” Trump said.

Read more →

Follow live Iran war updates →

---

---

That’s all From the Politics Desk for now. Today’s newsletter was compiled by Adam Wollner.

If you have feedback — likes or dislikes — email us at politicsnewsletter@nbcuni.com

And if you’re a fan, please share with everyone and anyone. They can sign up here.

---