Inequality Watch: Why Democrats lose, how they can fix it, and what we’ll be watching

Last week, we attended a protest outside the US treasury to oppose Elon Musk’s takeover of the federal purse.

It was raucous and impassioned but also revealed something that we had not fully grasped until we tried to peek our cameras over the surging crowd: the current lethargy of the left is more than just a temporary illness.

Several key Democratic legislators, along with a federal workers union, called the demonstration to push back against Trump’s historic executive overreach. At issue was the seemingly unfettered access to sensitive data and financial records bestowed upon anonymous tech bros working at the behest of Trump and his co-president, Musk.

The attendees were crammed into a small sliver of sidewalk. An array of democrats blasted Trump while accusing Elon Musk of being an unelected illegal actor tearing down constitutional safeguards with the carelessness of a child.

Still, the event itself—despite several thousands of vocal supporters—felt more hollow than substantive. The rallying cries of “if we fight, we win” seemed almost laughable, given the recent election results, which conveyed the Republicans’ stranglehold on all three branches of government.

Part of the dilemma for Democrats was that, once again, Trump had maneuvered them into the posture of tragically ineffectual opposition. Liberals were playing defense, defending institutions that the public mistrusts, fighting back against often fictive waste and abuse, and being loud and angry about being loud and angry.

Constantly being on defense sucks. And the Democrats always seem to be playing it.

But liberals can’t exclusively blame Trump for forcing them to constantly fight uphill. The problems for Democrats actually begin far from the capital.

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As reporters, our coverage tends to be more thematic than geographic. This means we report on specific topics like criminal justice and economic inequality rather than the goings-on in a particular area of governance or geography.

This affords us the opportunity to observe party dynamics vertically, from top to bottom, from national to local. And in our opinion, backed by the facts we will recount, Democrats need to start playing offense at home. And that means enacting politics that actually work.

The Democratic playbook often eschews the policies that directly improve people’s lives. Instead, they have conjured neoliberal solutions frequently tied to corporate subsidies, public-private partnerships, and corporate welfare that only heighten our currently historic economic imbalance.

We recommend that instead of just fighting Trump’s fusillade of Constitution-wrecking executive orders, Democrats pivot to implementing progressive local policy as the true form of meaningful resistance.

That’s right: Start small. Fix the places you’ve broken. It would be a markedly better use of civic fortitude to advance effective initiatives in locations where they still have some say—namely, the bluest of blue states and cities.

It’s worth noting before we delve into the details of how this would work that the pushback against Trump has turned the Democratic party into a reactionary—and, often, regressive—entity that has been unable to even tout its occasional wins.

The years-long priority on pointing out how Trump is a norm breaker, de facto criminal, and just generally corrupt has rewired progressivism. Too angry to think about much else, progressives are in a constant state of outrage that not only distracts from focusing on better policies—even worse, it actually empowers the man they seek to contain.

I mean, why else would healthcare have been totally absent from the 2024 campaign?

Democrats wrongly bet on the power of Trump’s foibles to persuade—a mistake that became even more glaring after the murder of UnitedHealthCare CEO Brian Thompson, when Americans of all ideologic stripes let the world know how much they hated the particularly cruel way our country pays for healthcare.

What were they thinking?

It seems mostly about Trump. Simply put, good policy has become anathema to Democrats, who are measuring their own capabilities and accomplishments against the ineptitude of a malignant narcissist.

Not a good place to start if you want to improve people’s lives through governance.

This criticism does not diminish or deny the Biden administration’s legislative accomplishments. The Inflation Reduction Act and the Infrastructure Bill, among others, were bold initiatives that, in part, enacted solid progressive ideas.

But in enclaves where Democrats have no opposition and should technically be able to thrive, they often fail to proscribe effective government-backed solutions. Places that should be a laboratory for sound progressive policymaking have become fierce economic inequality machines.

We know this because we live in one of these so-called blue oases where establishment Democrats allow legislation for transparency and accountability to wither and fail. We have witnessed firsthand how bad governance leads to outcomes that are astounding—given liberals’ alleged allegiance with the working class.

All of this failure is due to a simple, uncomfortable fact: the Democratic playbook often eschews the policies that directly improve people’s lives. Instead, they have conjured neoliberal solutions frequently tied to corporate subsidies, public-private partnerships, and corporate welfare that only heighten our currently historic economic imbalance.

This is not a new argument, but it is worth examining in detail if the party and our country want to move past the left-right debate and genuinely start solving problems.

In fact, we have a detailed example to illustrate precisely how this works, a front-row seat in one of the bluest epicenters and most efficient purveyors of this bad policy admixture: Baltimore.

Places that should be a laboratory for sound progressive policymaking have become fierce economic inequality machines.

The city hasn’t had a Republican mayor since Theodore McKeldin left office in 1967. But even with an absolute governing supermajority for decades, Baltimore’s political leaders have engaged in a myriad of ill-conceived, if not embarrassingly flawed, policy initiatives that have left the city depopulated, at times dysfunctional, and, worst of all, a generator of extreme economic inequality.

A recent report by the Baltimore Sun and some of our reporting illustrates this point. 

The Sun revealed that some 80% of all new apartment construction in the city since 2020 was deemed ‘higher-end’ or ‘luxury.’ That means the rent for most of the 6,700 units constructed since 2020 is simply unaffordable for residents of the city, which has a median household income of roughly $58,000.

It’s an astounding fact for a city that has one of the highest proportions of people living in poverty in Maryland. But it’s also mind-boggling because many of those same residents subsidized it.

As we outlined in our investigative documentary Tax Broke, the city has relied on an array of tax breaks to spur development and build those luxury apartments. There are so many incentives with acronyms like TIFs and PILOTs that it takes a glossary to define them all. 

Almost every new apartment complex built over the past 10 years has been constructed with a taxpayer subsidy. And it was a Democratic plan full of twisted policy prescriptions that made this questionable policy push possible. In Baltimore, Democrats have used the PILOT to engineer an entirely new form of corporate welfare.

PILOTs were originally designed to encourage tax-exempt organizations to contribute money to fund city services, hence the name: Payment in Lieu of Taxes. Johns Hopkins has a PILOT agreement with the city, though a recent analysis determined it is woefully inadequate to the tune of hundreds of millions of dollars which Hopkins would have paid if its property were taxed.

The city’s primary PILOT program, known as High-Performance Apartment, gives 10 years of tax breaks for building an apartment complex anywhere in the city. The taxes are eventually phased in, but the costs to the city over that time are substantial.

Consider the high-end luxury enclave known as Harbor East.

Our investigation found that the 20-acre high-end dining and apartment sanctuary collected at least seven PILOTs. Over the 10-year period for which we were able to obtain records, the city paid out over $110 million in subsidies. Among them was a 25-year PILOT for the towering luxury Marriott Waterfront Hotel. That deal netted developers $57 million over its lifetime. And the residents of this shining city subsidize all of it.

But it gets worse.

Baltimore has been at the forefront of using another tax break, known as a TIF, or Tax Increment Financing, to keep development humming. TIFs allow a property owner to invest future property taxes into the property itself.

Some cities, like Chicago, divert the money into special tax funds. Baltimore, however, turns it into a lucrative financing mechanism for wealthy developers. The city sells bonds to Wall Street to refund up to 30 years of future taxes to a developer upfront. The developer then pays off the bonds by simply remitting their normal property tax payment.

This type of tax incentive contributes mightily to economic inequality, first by exempting massive developments that use city services from paying for them, and second by funneling tens of millions of interest payments to Wall Street that would otherwise go into the city’s general fund.

Baltimore’s last annual financial report showed the extent of the city’s commitment. TIF deals have led to an excess of $660 million in future taxes and interest diverted from the general fund. That means a poor, struggling city mired in poverty is paying the interest on bonds used to fund luxury developments out of projected future revenues.

This is an extraordinarily regressive policy for a city that touts equity as its unifying philosophy. It has led to a variety of tax-exempt zones in the middle of a city whose residents shoulder the highest property tax burden in the state.

Excluding wealthy developments from paying for services is just the beginning of the public largesse doled out to the rich.

That’s because many city-financed projects have been sold for extraordinary sums. The aforementioned hotel commanded a $122 million asking price. Another property—the former Legg Mason building—in the Harbor East development sold for a record-breaking $468 per square foot.

The city had a profit-sharing agreement with the Legg Mason developers in exchange for a tax break. However, the building’s owners forced the city to forgo that profit-sharing in exchange for a one-time $1.5 million payment. The details of that deal remain secret.

On top of the extraordinary financial benefits granted to developers, the way Democrats have managed this policy is even more troubling.

Last year, State Senator Jill P. Carter introduced a modest piece of legislation that would have authorized a special Tax Break Transparency Task Force to study the effectiveness of these policies. That task force would have gathered a variety of stakeholders to obtain the data and then analyze whether the city had actually benefited from this type of tax break. 

But the bill died in the House Ways and Means committee. Not because a member objected to it—at least not publicly—but because committee Chair Vanessa Atterbeary would not bring it up for a vote.

Bear in mind that this bill did not have a fiscal note. In other words, it would not have cost taxpayers a single dime. However, the questions about tax breaks it was designed to answer—including their total cost to Baltimore City and its residents—remain a mystery.

The city did pay for a firm called Municap to analyze TIFs.

Municap’s report was mostly laudatory, citing statistics about increased economic activity due to subsidies given to projects like Harbor Point and Baltimore Peninsula. The problem is that Municap profits from the same deals it analyzes. It makes money preparing applications for developers and also profits from the bonds that are used to finance them by, again, providing analysis.

Bad policy often results from good ideas being buried under an avalanche of self-interest and petty politics. This year, we promise to shine a light on all of it, for better or worse.

That city officials have touted this system as an unbiased check on the wisdom of forgoing hundreds of millions of dollars in future tax revenue is, again, bad policy. So bad that it makes one wonder why the Democratic Party continues to debate how it became estranged from the working class. It wasn’t pronouns that did in liberals; it was policies like Baltimore’s tax break bonanza and the arrogance that surrounds them.

One of the most frustrating aspects of this recipe is that Baltimore’s predicament was predicted almost three decades ago. Then, a former mayor of Albuquerque, New Mexico, an esteemed urban planner named David Rusk, wrote a book called Baltimore Unbound. In it, he argued that the city’s high tax rate and “inelastic boundaries” had doomed it to population loss and wealth extraction.

And that is exactly what has happened.

All of this is to say that if Democrats can’t fix Baltimore, how can they run a country? Because despite all the tax breaks and corporate welfare, the city’s population continues to shrink. People are voting with their feet.

The point is that the resistance to the Trump administration should be focused on fixing issues that have been ignored—improving people’s lives not by fighting ideological battles but by thinking like progressives. This means every policy move should be premised upon answering the following questions:

How do we solve the problems that people care about? How do we build affordable housing? How do we make a tax system fair and progressive? How do we create a process of governance that devises effective solutions instead of ideological cage matches?

This is an idea we plan to test in this purportedly blue state. That’s because a state delegate, Caylin Young, has decided to reintroduce the Tax Break Transparency Task Force. The bill is largely unchanged, but the political landscape is decidedly different. Still, Young says the issue needs to be addressed.

“I think that it’s a good issue,” Young said. “Transparency is always a positive thing. Sunlight is the best disinfectant.”

And that’s not the only bill we’re going to follow.

Maryland currently faces a $2 billion deficit. Gov. Wes Moore has said everything is on the table, including an ambitious school funding bill that sought to bolster education, particularly in poorer cities like Baltimore.

That’s why we’ll also monitor several other efforts to bring economic equality to the state in our reporting this year.

Delegate Gabriel Acevero will attempt to legislate a common-sense change to the tax code that seems like common sense but has proven quixotic: roll back a tax law that exempts country club golf courses from property taxes.

Maryland carves out a special tax exemption for country clubs with more than 100 members. The land used for golf courses is specifically included in a statute that exempts “open space” from being taxable.

Acevero says it cost the state tens of millions of dollars over the years and is misguided, given that the assembly will soon be considering cuts to public education to reduce the deficit.

“I think first we have to take a look at Maryland’s tax code as a whole, which is very regressive,” Acevero told TRNN. “I think that’s really the overarching issue, it’s not necessarily only the issue of the country clubs that are manipulating a tax incentive.”

Another piece of legislation we will be watching is even more quixotic than attempting to make country clubs pay taxes.

The Maryland Prescription Affordability Board is another Democratic artifice that has done very little to fix the problem its name invokes.

The board was chartered by the general assembly in 2019. Since then, it has only issued reports that advise the state to tamp down high drug prices. The lack of actual results may be in part due to the fact the first chair of the hoard was a drug company lobbyist. But it also was the victim of last-minute changes to the enabling legislation that turned it into little more than a glorified “study group,” according to STAT, a healthcare journalism site.

In this legislative session, new powers have been proposed for the board that might actually allow it to fulfill its titular purpose.

At a press conference in Annapolis this week, supporters of the bill said it would expand the board’s reach beyond patients covered by government plans and include private insurers.  Vincent DeMarco, who heads the advocacy group Maryland Healthcare for All, said it had approved “upper limit” prices for two drugs: Jardiance and Farxiga.

But if that price range is purely advisory or actually a cap remains to be seen.

That’s why we will be watching to see what happens with the proposed change as well, to see if Maryland can create a new blue wall to stand up to the pharmaceutical lobby.

Stay tuned for that.

All of this is an effort to shed light on the often obscure and unseen process of passing legislation. Bad policy often results from good ideas being buried under an avalanche of self-interest and petty politics. This year, we promise to shine a light on all of it, for better or worse.

We will report regularly on progress, or lack thereof. This time, at least, we hope the closed doors will not have the deciding vote.

This content originally appeared on The Real News Network and was authored by Taya Graham and Stephen Janis.