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Politics & Policy

Tax ‘Reform’: Motivating the Wrong Base

One of the reasons for the speed at which the Republican tax proposals are being pushed through has been the belief that the GOP needs to have a major legislative achievement to its credit before the midterms. There’s something to that, but, as I mentioned the other day that rather assumes that the ‘accomplishment’ will be positive – and popular.

Count me skeptical about how positive that accomplishment will turn out to be. The two bills are certainly not without their merits, but the urge to ‘just do something’ (and to do it on a largely arbitrary timetable – why ‘by Christmas’?) seems to me to have led to a wasted opportunity. A more modest, more carefully considered plan might, in the end, lead to better, more substantive reform and, more than that, reform with a better chance of withstanding a  reversal in the GOP’s  political fortunes.

As for popularity, well…

Ramesh writes:

A political drawback of the Republican tax bills is that they raise taxes on a significant number of voters by curbing the deduction for state and local taxes. A lot of these voters are in households that make between $100,000 and $500,000 in taxable income. About 40 million tax returns come from that group, and its members are disproportionately likely to face higher taxes as a result of Republican tax legislation.

In a recent post, I conceded (it’s obvious enough) that the upper middle class are, by definition, very, very far from the breadline, but the notion that, despite that happy state of affairs, they are incapable of feeling resentment towards those at the peak of the wealth pyramid is misguided.

Ramesh appears to agree, asking “whether Republicans make these households happier if they cut taxes more for households richer than they are?” Somehow I don’t think he believes so. He adds:

The editors of the Wall Street Journal would have congressional Republicans believe that the answer is yes. Once again, they are arguing that cutting the top income-tax rate will salve the pain of voters who are currently slated for tax increases.

I doubt it, and as I argued before, “the Republican leadership also ought to be thinking more carefully about the consequences of taking on the upper-middles, a productive, noisy and influential section of the electorate unlikely to overlook the fact that, so far as this tax plan is concerned, their interests have been clearly subordinated to the interests of the 1% or 0.1%.”

Their discontent could well be bad news for many of the remaining GOP office-holders in blue states (there are nearly 30 Republican Congresspeople in New York, New Jersey and California alone), and not, I reckon, just there.

Over at CNN , Chris Cillizza looks at the midterms (my emphasis added):

Midterm elections — like the one coming up in 2018 — are all about turning out base voters. Why? History tells us that only the most stalwart partisans turn out when the presidential race isn’t on the ballot. So if your side wants to pick up House and Senate seats in a non-presidential election, you need to find ways to excite its most committed members.

Which is where the Republican tax plan approved by the Senate last week comes in. And the fact that, according to a new CBS poll, lots more people hate the plan than love it.

Just 16% of people in the poll said they “strongly” approved of the GOP tax plan. That number pales in comparison to the 40% who said they “strongly” disapprove of it.

A similar question — “Which best describes how you would feel if the Republican tax plan was signed into law?” — produced equally concerning results for Republicans. Just 8% said they would be “excited” by the new tax law while 22% said they would be “angry.” (Another 28% said they would be “satisfied” and 31% said they would be “disappointed.”)

Dig into the numbers and the direness for Republicans becomes more apparent. While 46% of Republicans strongly approve of the tax plan, 71% of Democrats strongly disapprove.

Ditto the “angry” versus “excited” breakdown. Just 19% of Republicans said they were excited about the prospect of the tax bill becoming law as compared to 39% of Democrats who said they were angry.

What those numbers suggest is that the Republican tax bill is a major motivator for Democratic base voters and far less of one for the GOP base. Meaning that the tax bill looks far more likely to drive Democrats to the polls to show their anger and disapproval than it is to push Republicans to vote next November in support of it…

It is not (quite) too late for the GOP leadership to make substantial revisions to their tax package, especially if they can bring themselves to walk away from that unnecessary and  self-imposed Yuletide deadline. There are good economic and fiscal reasons why they should – and the political case for doing so seems close to unanswerable.

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