OUR ECONOMY IS AT A TURNING POINT

The U.S. economy in early 2026 stands at a fragile crossroads. Growth is slowing, inflation pressures are returning, and working families are feeling squeezed. At the center of this moment is one defining issue: affordability, the ability of Americans to pay for housing, food, healthcare, and energy.

Two competing economic visions offer very different paths forward.

Democratic Party Policies

Democrats argue that strong economic growth must be paired with economic security and fairness. Our approach is rooted in the belief that government plays a vital role in expanding opportunity and stabilizing the economy. That means investing in education and job training, strengthening infrastructure, supporting innovation, and protecting workers and consumers. It also means using progressive taxation to fund these priorities and reduce inequality.

This vision places working families at the center of economic policy. It recognizes that growth alone is not enough if the benefits are concentrated at the top. Affordability, lowering everyday costs and increasing financial stability, is also a primary goal.

Tax Policies

The Democratic Party believes that people and businesses with greater ability to pay should pay a larger share of taxes, while middle-class and lower-income families should receive tax relief or pay relatively less. Democrats refer to this as a progressive tax system.

Ref. State Income & Sales Tax Policies – Democrats typically prefer:

• Using income taxes rather than sales taxes when possible.
• Exemptions for necessities such as groceries, medicine, diapers, or school supplies.
• Targeted sales-tax holidays for families

Ref. Local Property Taxes – Democrats generally support:

• Maintaining adequate property tax revenues to support schools and local services.
•  Property tax relief for seniors and lower-income homeowners.
• Homestead exemptions.
• Programs that prevent residents from being taxed out of their homes due to rising property values.

WARNING NOTE: Florida Governor DeSantis and many of his GOP accomplices are favoring a proposal for a phased plan that would dramatically reduce or eventually eliminate property taxes on Florida homestead properties (primary residences). The stated goal is to ultimately eliminate  property taxes on primary residences regardless of value. The proposal would require voter approval through a constitutional amendment.

The Political Goal of the proposal is to divert attention from the Number 1 Voter Issue for many in SW Florida  – Tackling Housing Affordability due to exorbitant Homeowner’s Insurance Premiums. Homeowners Insurance Premiums in Florida are the highest in the nation. 

For Collier County and Southwest Florida, the biggest practical question is how local governments would replace billions of dollars currently used to fund sheriff’s offices, fire protection, EMS, parks, roads, libraries, and other local services if homestead property taxes are largely eliminated. Eliminating property taxes could create large funding gaps for local services.

Replacement revenue may require higher sales taxes, fees, or increased state funding. At minimum it would “weaken Local Government” and “increase the power of State Government.”  

Republican Party Policies

Republicans, by contrast, emphasize market-driven growth. Their approach focuses on lower taxes, deregulation, and limiting the role of government. In recent years, it has also included aggressive tariffs intended to boost domestic manufacturing but increasing costs to consumers.

In theory, these policies are designed to spur investment and job creation. In practice, the results have been mixed. Tax cuts have often benefited corporations and higher-income households disproportionately, with much of the savings flowing into stock buybacks and dividends rather than wages or new investment. At the same time, tariffs have raised costs for businesses and consumers, contributing to higher prices across the economy.

Local Property Taxes

In Florida, the GOP is currently aggressively promoting  a proposal to ultimately eliminate local property taxes. Advocates contend that forcing local governments to resize their programs and budgets will drive more efficiency in local governments. To help possibly compensate for critical revenue losses, a new state trust fund would be established to provide grants to local governments to help offset revenue losses and maintain essential services. This would signify a huge loss in power to local governments, especially if local mayors and commissions were of a political party different than the one in the governorship and the majority of the state legislature.

Recent Economic Data Underscores the Stakes

After several years of strong recovery, growth has slowed sharply. By late 2025, the economy was expanding at less than 1 percent. The labor market, long a source of strength, is beginning to weaken. Job losses have emerged, unemployment has ticked up, and hiring has slowed. Manufacturing, often cited as a focus of current policy, has lost about 100,000 jobs in the past year.

Inflation, which had been moderating, is now at risk of rising again. Energy prices are a major factor. A widening conflict in the Middle East has disrupted global oil supplies, pushing prices above $100 per barrel. Americans are already seeing the impact at the gas pump, a jump of 30% in March. Higher energy costs are starting to ripple through the entire economy, raising the price of food, transportation, and everyday goods.

Even though the United States produces significant amounts of oil, it is still deeply tied to global markets. When supply is disrupted abroad, prices rise at home. Historically, these kinds of energy shocks force consumers to cut back spending, slowing the economy further.

Consumer Confidence is Reaching New Lows

Not surprisingly, consumer confidence is falling. Many Americans feel that their wages are not keeping up with costs, and uncertainty about the future is growing.

This is the challenge facing policymakers: how to restore stability without deepening the strain on working families.

Republicans continue to prioritize tax cuts, deregulation and steep cuts in health and social programs, betting that market forces will drive recovery.

Democrats argue that restoring economic strength and affordability requires fiscal discipline paired with smart, targeted investment. That means asking the wealthiest Americans and large corporations to pay their fair tax share, while investing in the foundations of long-term growth such as modern infrastructure, semiconductor manufacturing, workforce development, and cutting-edge medical and technological innovation. It also means strengthening supply chains and accelerating the transition to clean, reliable energy.

Just as important, Democrats focus on lowering the costs that matter most to families. These include food, housing expenses, healthcare and energy, while protecting and improving essential programs like Medicaid, the Affordable Care Act, and SNAP. These are not abstract policies; they directly impact whether Americans can afford to live with dignity and security.

The evidence is clear: when these policies are in place, the economy grows stronger and more inclusive. Recent Democratic administrations have demonstrated that it is possible to drive robust growth while expanding opportunity and easing the financial burden on working families.

Conclusion and Call to Action

At this moment, the risks are clear. Slower growth, rising costs, and global instability are converging in ways that could undermine economic progress. For millions of Americans, the answer will be measured in something very real: whether they can afford to live, work, and build a secure future in today’s economy.

Vote by Mail and support Democrats and our economic and fiscal policies, these designed to protect our economic prosperity and the opportunities for ALL Americans. 

Talking Points to VIEW, SAVE, SHARE, PRINT:

The GOP’s Big Bamboozles (March 2026)

How GOP Policies Threaten SW Florida (January 2026)

Visit CollierDems.org/FYI for more issues and topics!