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Today, the House and Senate are likely to approve a sweeping tax overhaul and provide Trump with his one and
of the year—and one that seems quite likely to be the last of his presidential term, given the Democratic wave that seems to be forming. But, as The New York Times notes, the bill that Trump is championing is a far cry from the populist rhetoric of his campaign.
- “But this week, the president hopes to sign with great fanfare a tax bill that would deliver its largest benefits, not only in dollar terms but also as a percentage increase in income, to corporations and the wealthiest Americans. His own family stands to gain from tax breaks maintained or extended for corporate real estate ventures, and his heirs have reason to celebrate the doubling of the exemption from estate taxes: Under the bill, the Trump children and grandchildren could inherit $22 million tax free, though they would have benefited more from a cut in the estate tax rate or an abolition of the tax altogether.”
- In addition: “In the coming weeks, the Education Department plans to roll back protections for college graduates saddled with student debt from sham for-profit universities. And in the opening months of his presidency, Mr. Trump signed congressional resolutions permanently reversing rules that would have required companies seeking significant federal contracts to disclose violations of labor standards, and would have required oil, gas and mining companies to disclose payments made to foreign governments in exchange for access to drilling or mining rights.”
- “While Mr. Trump’s insurgent populist message helped send him to the White House, he has yet to fulfill his promise to storm the castle of the establishment. In fact, in many
wayshe has helped prop it up.”
- Per WaPo: “The GOP bill would lower taxes for 95 percent of Americans in 2018, but on average the cuts for the highest earners far exceed those of people making less, according to the Tax Policy Center. In 2018, taxpayers earning less than $25,000 would receive an average tax cut of $60, the center found. Those earning between $49,000 and $86,000 would get an average cut of about $900; those earning between $308,000 and $733,000 would receive an average cut of $13,500
; andthose earning more than $733,000 would receive an average cut of $51,000.”
- “As written, the bill becomes less generous for individuals in later years, as many of the tax benefits for individuals have set expiration dates. By 2027, 53 percent of Americans would pay more in taxes, according to the TPC.”
- This version of the bill, the WaPo’s expert says, is less regressive than the ones that previously passed the House and Senate, thanks largely to the expanded child tax credit. But it still skews decidedly toward top earners—and, in fact, its benefits skew more to the rich than the earlier Senate version.
- Per Vox: “By 2027 … 82.8 percent of the bill’s benefit would go to the top 1 percent, up from 62.1 under the Senate bill. And even in the first years of the bill’s implementation, when it’s an across-the-board tax cut, the benefits of the law would be heavily concentrated among the upper-middle and upper-class Americans, with nearly two-thirds of the benefit going to the richest fifth of Americans in 2018.”
- NPR: “The average household would get a tax cut of $1,610 in 2018, a bump of about 2.2 percent in that average household’s income, according to a report released Monday by the Tax Policy Center, a nonpartisan think tank that has been critical of the tax overhaul plan. However, extremes make averages, and the benefits would be much larger for richer households. A household earning $1 million or more would get an average cut of $69,660, an income bump of 3.3 percent. Compare that to the average household earning $50,000 to $75,000, which would get a tax cut of $870, or 1.6 percent.”
WHAT IT MEANS: For any major legislation, the Tax Cuts and Jobs Act is historically unpopular. For a tax-cutting bill, it’s even more so. A recent PPP poll found that only 29 percent of Americans support it. From a new CNN poll: “Opposition to the bill has grown 10 points since early November, and 55% now oppose it. Just 33% say they favor the GOP’s proposals to reform the nation’s tax code.”
- Those aren’t good numbers for signature legislation, especially for low-hanging fruit like tax cuts. If you’re wondering why the GOP is so hellbent on delivering an unwanted tax cut for the wealthy, you’re not alone.
- From Ezra Klein at Vox: “This is not how politicians are supposed to act. Politicians are meant to have an instinct for self-preservation, a sense of the public will, a fear of electoral consequences. … Republicans were wiped out in
the Virginia, New Jersey, and Alabama elections. Overall, they’re running 9 points behind their 2016 performance this year. Generic ballot polling shows Democrats with a staggering 11-point lead in 2018—more than enough to take back the House. Congressional Republicans are facing annihilation in the midterms, and they know it. And yet Republicans are governing with an almost merry disregard for public opinion—and not just on taxes.”
- Indeed, in 2014, Senate Majority Leader Mitch McConnell criticized the Affordable Care Act—much more popular even at its passage than the tax cut bill is—because Democrats couldn’t land a Republican vote: “Without some meaningful buy-in, you guarantee a food fight. You guarantee instability and strife. It may very well have been the case that on Obamacare, the will of the country was not to pass the bill at all. That’s what I would have concluded if Republicans couldn’t get a single Democrat vote for legislation of this magnitude. I’d have thought, maybe this isn’t such a great idea.” Maybe McConnell should heed his own advice.
- Back to the question of why. MIT political scientist Andrea Campbell tells Klein: “Overall public opinion doesn’t matter. Instead, members of the House and Senate have to think about two groups when considering how to vote on legislation such as the Tax Cut and Jobs Act: their donors and their reelection constituency. To win reelection they need money and they need votes. But they only need votes from a subset of individuals in their districts or states; other voters’ preferences can safely be ignored. So how do donors and GOP reelection constituencies feel about the tax bill?”
- To reiterate, public opinion no longer matters, even in an administration that campaigned on being a champion of the forgotten little guy. Donors and the base are all that matter.