Tax law failed to save GOP majority

The biggest accomplishment for congressional Republicans — passing a sweeping new tax law at the end of 2017 — didn’t end up saving the GOP majority in the House.

The economy wasn’t the biggest issue of the midterm elections, according to exit polls, which found that a plurality of voters think the new tax law has not had any impact on their personal finances.

Democrats claimed victory on the issue.

ADVERTISEMENT

“For 30 years, the powerful wealthy few ... have dictated tax policy on the Republican side. Cut the taxes of the rich, and that’s a great thing for America,” Senate Minority Leader Charles SchumerCharles (Chuck) Ellis SchumerMake Trump own the shutdown over his ill-advised border wall More than a tantrum McConnell’s marijuana conundrum: Cory Gardner MORE (D-N.Y.) told reporters Wednesday. “That’s over. I think our message, our focus, has put a knife through the heart of that argument.”

Republicans are divided.

Some say the law helped prevent the GOP from losing even more seats because it boosted the economy. They blame losses in the House on separate issues and factors.

“Can you imagine the outcome if we didn’t have a booming economy? It made a huge difference across this country, and I think was key in a number of our Republican races,” said House Ways and Means Committee Chairman Kevin BradyKevin Patrick BradyPaul Ryan releases ‘teaser trailer’ about series on push for tax reform Dems aim to punt vote on ObamaCare taxes House Democrats poised to set a dangerous precedent with president’s tax returns MORE (R-Texas).

Other GOP lawmakers, however, expressed concerns that a provision in the law hurt Republicans in high-tax states such as New York and New Jersey — where the GOP ended up losing a total of six seats, with two races still uncalled.

The law, which cut tax rates across-the-board for individuals and businesses, was unpopular at the time it was signed, but Republicans thought it would become a political winner as people started seeing more money in their paychecks.

The law’s popularity increased in the weeks following its enactment, when many companies announced that they were giving their employees bonuses. But the tax law never got widespread support, and polls ahead of the election tended to show voters divided on the measure.

While Republicans spent some time on the campaign trail touting the tax cuts and arguing that Democrats would raise taxes if elected, other issues, such as immigration, often featured more prominently in their campaigns.

“To properly message the tax law, it takes a lot of time and effort, and you have to stay on the same page,” said GOP strategist Ford O’Connell.

He said that didn’t happen, particularly in the wake of the Brett KavanaughBrett Michael KavanaughDemocrats will fail if they portray William Barr as controversial pick ‘Justice’ selected as Merriam-Webster’s 2018 word of the year Chief justice of California Supreme Court leaves GOP over Kavanaugh confirmation MORE Supreme Court confirmation hearings, when both Republicans and Democrats decided to focus more on issues designed to mobilize their bases.

Democrats campaigned against the law and say their message that it primarily benefited wealthy individuals and corporations resonated with voters. An internal Republican National Committee poll in September found that most people thought the law helped the wealthy and corporations more than the middle class.

Health care was a bigger part of Democratic campaigns, though the two issues were linked to some extent, with Democrats often arguing that the tax law’s increase in the debt would lead Republicans to pursue cuts in social safety net programs like Medicare.

Democrats ended up gaining more than 30 House seats. These gains involved defeating four Republicans on the Ways and Means Committee and flipping a number of seats in high-tax states such as New York, New Jersey, California and Illinois that were particularly affected by the tax law’s $10,000 cap on the state and local tax (SALT) deduction.

Of the 11 House Republicans who voted against the tax law because of concerns about the SALT deduction cap, four lost and another three retired and will have Democratic successors.

Some Republicans in suburban districts in high-tax states said that the SALT deduction cap was a factor in GOP losses.

“Certainly, I think it would have been better if we had complete deductibility of SALT,” said Rep. Leonard LanceLeonard LanceIncoming Dem lawmaker: Trump 'sympathizes' with leaders 'accused of moral transgressions' On The Money: Why the tax law failed to save the GOP majority | Grassley opts for Finance gavel, setting Graham up for Judiciary | Trump says China eager for trade deal | Facebook reeling after damning NYT report Tax law failed to save GOP majority MORE (R-N.J.), who voted against the tax law and lost his reelection race.

Rep. Pete KingPeter (Pete) Thomas KingGOP rep on Comey: 'I never recall him not being able to answer a question' House Dems to introduce bill for background checks on all gun purchases or transfers: report Democrats take Bloomberg run seriously, but with skepticism about his chances MORE (R-N.Y.) said that he told his colleagues in a House Republican Conference meeting Tuesday that the SALT deduction cap was a key reason for the GOP losing seats in certain areas.

“It was the main cause in the Northeast and the suburbs around the country,” said King, who voted against the tax law and won reelection.

But other GOP lawmakers in high-tax areas said they think other factors, such as the large sums of money raised by Democrats, played a bigger role.

Rep. John FasoJohn James FasoTax law failed to save GOP majority New York New Members 2019 McCarthy defeats Jordan for minority leader in 159-to-43 vote MORE (R-N.Y.), a "no" vote on the tax law who lost reelection, said that “Democratic enthusiasm around the country” created an environment where his opponent was able to raise millions of dollars.

And in some competitive races outside of the Northeast and California, Republicans think that the tax law helped them win.

“The tax bill helped me. Absolutely. My constituents benefited from the tax cuts,” said Rep. Andy BarrGarland (Andy) Hale BarrElection Countdown: Florida fight ends with Scott, DeSantis wins | Dems see Sunbelt in play for 2020 | Trump to campaign in Mississippi ahead of runoff | GOP wipeout in Orange County | Ortiz Jones concedes in Texas House race The Memo: Trump seethes, two weeks after midterms Dem gains put Sunbelt in play for 2020 MORE (R-Ky.), who won his competitive race.

The affluent districts that contain many voters who claim the SALT deduction also are areas where Trump was unpopular, and some strategists see the overall displeasure at the president as a bigger reason why these districts went for Democrats.

“Republicans suffered big losses in high-tax states where the SALT cap affected a lot of voters,” said Dave Wasserman, House editor for the nonpartisan Cook Political Report.

Still, he said it’s difficult to completely assess blame since other factors also could have contributed to GOP losses in those areas.

Wasserman said “it’s difficult to discern the impact because those are places where Trump did worse in 2016.”

Some political observers think GOP efforts to repeal and replace ObamaCare, which were ultimately unsuccessful, ended up playing a bigger role. Exit-poll data found that a plurality of voters saw health care as the most important issue.

But Patrick Murray, director of the Monmouth University Polling Institute, said that the fact that the tax law wasn’t a prominent issue in and of itself was a problem for Republicans, because it meant that Republicans felt like they couldn’t focus on their biggest piece of legislation.

“They couldn’t really run on their signature issue because the public was really divided,” he said.