Dems eager to use tax bill against GOP in ’18
Democrats see Thursday’s passage of the House tax-reform bill as a potent weapon for the 2018 midterms.
Democrats plan to tie the GOP tax bill to the party’s failed attempts to repeal ObamaCare, a message they hope will portray Republicans as abandoning the working class in favor of businesses and the wealthy.
All income groups on average would see a short-term tax cut under the House bill. But some lower- and middle-income groups will see their taxes go up in the long term if the House GOP bill becomes law — a fact Democrats are eager to seize on.
Republicans are downplaying any political concerns. While tax reform still has to pass the Senate and be signed into law by President Trump, the GOP is excited by the prospect of finally passing a key agenda item into law after a year of legislative malaise — as well as by the potential for economic growth they say will boost them in the midterms.
But Democrats are betting that the political headwinds on tax reform will be stronger for their party, whether or not Republicans actually pass the bill into law.
“First and foremost we are trying to stop the damn thing, because it would be a disaster,” said Jesse Lehrich, the communications director for Organizing for America. “But I think there’s no doubt that this is going to be a massive problem for them in the political sense — much like with health care — whether or not they are able to finally pass something and enact it into law.”
“Either way, just like with the American Health Care Act and the Senate efforts to repeal ObamaCare, it’s still going to be a huge liability for them.”
The House’s tax overhaul reduces the number of individual tax brackets, cuts the corporate tax rate from 35 percent to 20 percent and curbs other tax breaks and deductions.
One of those was the state and local tax (SALT) deduction, which allows taxpayers to write off state and local property taxes in addition to either state income or sales tax. The House GOP’s plan repeals income and sales tax deductions and caps the property tax write-off at $10,000. That would particularly impact those in high-tax states like California, New Jersey and New York, as well as in many suburbs.
The plan in total would lower taxes on all income groups on average in 2019, but the Joint Committee on Taxation (JCT) estimated that some Americans would eventually see tax increases.
Republicans are pointing to estimates released by the House Ways and Means Committee that those making the median household income of $59,000 would see a tax savings of $1,182 in the first year of the plan. And while the JCT estimates future rises for some taxpayers, Republicans are confident that the changes to the business tax code will cause wholesale economic growth that will be felt by all.
“We will run on tax reform and we will win on tax reform. [Rep.] Nancy Pelosi [D-Calif.] and House Democrats have offered nothing that resembles a credible tax plan and have instead decided to protect the status quo,” National Republican Congressional Committee spokesman Jesse Hunt said in a memo on how the group plans to go on the offensive in 2018.
Democrats, meanwhile, framed the bill as a tax cut for wealthy Americans and corporations, with middle-class families footing the bill — an issue they say Republicans won’t be able to run away from on the campaign trail.
“Shamefully, this Republican Tax Scam victimizes the millions of middle-class Americans who deserve to keep more of their hard-earned paychecks,” Democratic Congressional Campaign Committee Chairman Rep. Ben Ray Luján (N.M.) said in a statement.
“Make no mistake, House Republicans are exposing how out-of-touch they really are, and it’s going to haunt them at the ballot box in 2018.”
A laundry list of liberal groups, including Organizing for Action, Not One Penny and American Bridge, announced plans to blanket airwaves with ads attacking the Republican tax plan.
The passage of the House bill comes a week after sweeping victories across the country for Democrats, who won two governor’s races and numerous of local elections. With consistent double-digit generic ballots for Democrats, nonpartisan election handicapper Cook Political Report predicted a wave Democratic victories in 2018.
Political analysts argue that voting for the House tax bill will further complicate campaigns for vulnerable Republican incumbents.
Thirteen Republicans joined House Democrats in voting against the bill. The majority of the GOP defectors represent New Jersey, New York and California, blue states where the elimination of SALT deductions will hit voters hard.
But a number of other vulnerable Republican lawmakers, including some who represent constituents who will be impacted by the elimination of SALT, joined their GOP colleagues to pass the legislation.
Rep. Barbara Comstock (R-Va.) is one top Democratic target who voted for the tax bill. According to analysis by the Tax Policy Center, almost 52 percent of tax returns from her district came from residents who take advantage of that deduction.
Comstock justified her vote for the bill by saying that it’s still a work in progress, and Republicans will continue to work on it as they address the differences between the House and Senate plans.
But Comstock’s vote for the bill likely complicates an already tough reelection fight. Hillary Clinton carried her district by 10 points in 2016, while Virginia Gov.-elect Ralph Northam won her Washington suburbs district by 20 points earlier this month.
Vulnerable lawmakers who voted against the bill hope their decision to break with the party can help them withstand the potential political blowback of the bill in swing districts. But Democrats argue that the narrative will help contribute to a potential wave in 2018 — whether or not individual Republicans voted for the bill.
“When there were wave elections in 2010 and 2014, the [Democrats] who were running against ObamaCare got swept up in the wave,” Lehrich said.
“If there’s going to be a wave, a lot of the people who even voted against the bill will get swept up too.”