The following article by James Hohmann with Breanne Deppisch and Joanie Greve was posted on the Washington Post website December 20, 2017:
Republicans are forging ahead with their promise to overhaul the tax code, even with very little public support for their proposal. (Video: Jenny Starrs/Photo: Jabin Botsford/The Washington Post)
THE BIG IDEA: The best thing going for Republicans right now is low expectations.
— Just before 1 a.m., the Senate passed on a party-line vote the most significant overhaul of the tax code in three decades. The House, which advanced the bill yesterday, needs to vote on it again to deal with a few technical issues raised by the Senate’s parliamentarian, but that’s a mere formality. Donald Trump plans to hold a news conference later today and sign the first major legislative achievement of his presidency as soon as possible.
— As the measure gets across the finish line, a flurry of fresh polling shows the bill is historically unpopular and becoming more so:
- In an NBC-Wall Street Journal survey, 24 percent of Americans think the tax bill is a good idea versus 41 percent who believe it’s a bad idea. (That’s up from 35 percent in October.) A plurality — 37 percent — say the middle class will pay more.
- Opposition to the bill has popped 10 points in CNN’s polling since last month, with 55 percent now against the bill. Only 21 percent say they’ll be better off if the bill becomes law, and 37 percent say that their family will be worse off.
- A Monmouth University poll found that exactly half the country predicts that the federal taxes they pay will go up under the new law. Just 14 percent say their taxes will go down, and another 25 percent believe they’ll pay the same amount.
— But here’s the truth: 8 in 10 Americans will pay lower taxes next year, according to the nonpartisan Tax Policy Center’s analysis of the final bill. Only 5 percent of people will pay more next year. Mostly, those are folks who earn six figures and own expensive houses in places with high local taxes, such as New York and California.
— Paul Ryan says he has “no concerns whatsoever” about the bad polling because most people’s after-tax incomes will rise. “Results are going to make this popular,” he told reporters.Ryan, who sees this as the crowning achievement of his two decades in Congress, has already touted the bill this morning on CBS, ABC, NBC, Fox and with an op-ed in the Wall Street Journal.
— I interviewed a dozen GOP operatives yesterday about how they plan to deal with this issue in 2018. They said the numbers right now are so bad that they can only get better. They freely acknowledged the head winds, but they see an opening to sell the cuts and insist that perceptions are still not fully baked. They’ve conducted focus groups and commissioned polls to figure out the talking points that are most likely to move the needle, and they’re planning multimillion-dollar advertising campaigns to drive those messages.
“Our fate in 2018 is tied to the tax bill,” said Corry Bliss, the executive director of American Action Network, a group aligned with House GOP leadership. “There’s no faking it. You know what you paid in taxes this year. You will know next year whether it’s going up or going down. And that should be something that every Republican is excited about.”
AAN has spent more than $24 million promoting the tax bill across 64 congressional districts since the start of August, and the group will make it a centerpiece of all 2018 messaging. “One party cut middle-class taxes. Another party spends all their time trying to impeach the president. That’s a really nice contrast,” Bliss said. “We have no control of the national narrative. There’s no amount of money to buy it back. But I do think we can have control over the narrative to targeted people.” One data point he said you can expect to hear a lot in future ads is that families will get “an average tax cut of $2,000.”
— Republicans have a lot of upside potential with their own base. The NBC-WSJ poll finds that only 53 percent of Republicans and 57 percent of Trump general election voters currently back the tax bill. Even worse, just 28 percent of rural Americans and 29 percent of whites without a college degree think it is a good idea right now. Trump’s overall popularity may be at a record low in the survey, but these are constituencies he can persuade.
“You start with the base,” said Americans for Prosperity president Tim Phillips, a leader of the Koch political network. “We’re going to make sure the base understands that the Republican Congress has accomplished something [big]. They come in for criticism on occasion. Often they deserve it, but on this one they stepped up and delivered big for the country.”
Phillips said AFP will mobilize its grass-roots infrastructure across 36 states to lay out the benefits of the bill and spend on additional advertising in target states. “The Reagan 1981 tax cuts did not enjoy broad support when they were first passed into law,” he said. “It took time for people to see the change was good for them … and they are now seen as a historic accomplishment that ignited a decade of economic growth. So it is not unprecedented for major legislation to pass with poll numbers that are less than you’d hope for.”
The 45committee, a pro-Trump conservative nonprofit group that is primarily funded by casino magnate Sheldon Adelson and the family of TD Ameritrade founder Joe Ricketts, has spent about $15 million promoting a tax bill over the past few months. The group does not have a target number for how much it will spend in 2018 yet, but a holiday-themed thank-you ad is in the works.
“We know it’s the greatest Christmas present from Washington in a long time, and we’re going to tell people about it,” said Brian Baker, the chairman and president of 45committee. “We’ll spend whatever it takes to make sure the American people know how they benefit from a Trump-Pence administration and a Congress led by Paul Ryan and Mitch McConnell.”
Baker’s group just paid for Republican pollsters Bill McInturff and Nicole McCleskey at Public Opinion Strategies to test various messages related to the tax bill. They reported back that the four most effective arguments to move public opinion are: 1) “Removes and eliminates many loopholes so special interests start paying their fair share.” 2) “Levels the playing field for American businesses to better compete against foreign competition.” 3) “It’s estimated that more than one million jobs would be created over the next 10 years with higher wages for workers.” 4) “Simplifies and reduces taxes for most Americans by doubling the standard deduction.”
On the generic ballot in their internal poll, an unnamed Republican initially trailed an unnamed Democrat by 12 points. But after hearing a list of messages about the bill, the gap closed to eight points. (That’s still a pretty bad place to be for a GOP incumbent at this point.)
— Brad Todd, a Republican ad-maker who will be involved in some of next year’s marquee contests, said outside groups need to spend real money to sell the bill as soon as possible. “In order for the benefit to not come too late in the election cycle, it’s pretty important for conservative and Republican groups to make the sale now and let people know what’s coming,” he said. “April 2019 will be a bad time for people to realize that Republicans gave them a tax cut …
“God created Republicans to cut taxes,” quipped Todd. “Big bills are always complicated, but in time the truth comes out when something costs them more or less money.”
— Every GOP senator wound up supporting final passage — John McCain is fighting cancer back home in Arizona but said he would have voted yes — and just 12 Republicans defected in the House. (Five were from New York, four from New Jersey and two from California.) This reflects a mind-set inside both chambers that the politics of this are not as bad as the conventional wisdom emanating from the mainstream media suggests.
“We will run on tax reform and win on tax reform in 2018,” said Matt Gorman, the NRCC’s communications director. “This bill will help ease the cost of living for millions of Americans who feel left behind.”
On the other hand, it’s equally remarkable that not a single Democrat in either chamber voted for this, including all 10 of the senators up for reelection next year in states Trump won. “Democratic obstruction of middle-class tax reform will be our No. 1 issue going into next year’s elections,” said Senate Leadership Fund President and CEO Steven Law, a former chief of staff to Mitch McConnell.
But Democrats say this bill is unpopular enough that they can oppose it even in places where Trump remains popular. “Democratic candidates are already running against this tax scam and winning the debate in their communities,” said Meredith Kelly, the DCCC’s communications director. She predicts that the bill will stay unpopular.
— Bottom line: Nancy Pelosi says, “This is Armageddon.” But the sky will not fall. At least not next year.
To be sure, over the long-term, this bill may set in motion a fiscal disaster a la Kansas by exploding the national debt and forcing painful cuts to popular programs, including entitlements. The rich and corporations do get the vast majority of the benefits. The new code will cause confusion and uncertainty. It will also worsen income inequality. And there’s a chance that it gives the economy a sugar high that forces the Federal Reserve to raise rates faster than planned and hastens a recession.
For at least the next eight years, though, the undeniable math is that most people are going to pay less. Republicans say the reason that economists say people’s taxes will go up after a decade is that they needed to make the income tax cuts temporary to comply with budget reconciliation rules. They believe it’s inevitable that a future Congress will vote to extend them, and that they will have a wedge issue against Democrats if that doesn’t happen.
HOW IT’S PLAYING:
- Todd C. Frankel: “The GOP tax plan has a nasty surprise for upper-middle-class parents with kids in college.”
- Reuben Fischer-Baum, Kim Soffen and Heather Long: “Republicans say it’s a tax cut for the middle class. The biggest winners are the rich.”
- Rachel Siegel: “In Maryland, a rush to pre-pay local property taxes before Republicans cap deductions.”
- Los Angeles Times: “A quick look at some of the biggest tax changes for Californians.”
- Newark Star-Ledger: “Senate passes Trump-backed bill shrinking your big tax break.”
- Philadelphia Inquirer: “Trump tax plan puts him on verge of big win — but not the kind he promised middle class.”
- Chicago Tribune: “Local Dems decry tax plan as failing middle class.”
- Politico: “Confusion and chaos ahead as new tax rules take immediate effect.”
- The Guardian: “World markets driven to record highs by Trump tax bill.”
- CNN: “Tax passage will be moment of vindication for Ryan.”
- The Wall Street Journal: “Tax Cuts to Test GOP’s Economic Pledges.”
- Washington Examiner: “With zero Democratic votes, GOP tax overhaul risks future challenges.”
- Jake Novak for CNBC: “Tax reform unleashes latest round of DC deficit hypocrisy.”
- Bruce Bartlett for USA Today: “After tax cuts, Republicans may suddenly find Trump is more trouble than he’s worth.”
- Matt Taylor for Vice: “The Craziest Part of the Tax Plan Is How We Got Here.”
- The Wall Street Journal editorial board: “The Tax Reform Promise.”
- Rebecca M. Kysar and Linda Sugin for the New York Times: “The Built-In Instability of the G.O.P.’s Tax Bill.”
- Robert Reed for the Chicago Tribune: “Tax plan a windfall for companies, but will anything trickle down to the rank and file?”
— Will your taxes go up or down in 2018 under the new tax bill? We made a calculator so you can try to figure it out. (Read the full legislation here.)