Taxes

Democrats Are Fooling Themselves About Tax Reform's Unpopularity

There will always be arguments about the efficacy of tax cuts for corporations and the rich, but at some point people find out that they get one, too.

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According to political analysts, 2018 Democrats will use the just-passed tax reform as a way to argue that the Republican Party is the party of the plutocracy, which is another way of saying that Democrats are going to use the same argument they've been using for the past three decades with varying degrees of success. A number of liberals have claimed that the passage of "unpopular" tax reform is historically analogous to the passage of Obamacare, which triggered the loss of hundreds of Democrat seats and, perhaps, control of the presidency.

This is wishful thinking for a number of reasons.

Yes, the tax bill is unpopular. Then again, I'm not sure you've noticed that everything Washington, D.C., tries to do is unpopular. Nothing polls well. Not the president. Not Congress. Not Democrats. Not legislation. Not even erstwhile popular vote-winning candidates. Certainly, a bill being bombarded with hysterical end-of-the-world claims that are rarely debunked by the political media is not going to be popular. Republicans won't pass anything if they wait around for things to be popular.

However—apologies to House Minority Leader Nancy Pelosi—they can be somewhat content knowing that voters will probably like it once they find out what's in it.

Why do so many Americans believe that the middle class is getting a tax hike? Because outlets they trust are constantly lying to them. Both in framing and content, the coverage of the tax cuts has been impressively dishonest. "One-Third of Middle Class Families Could End up Paying More Under the GOP Tax Plan" writes Time Money (they won't). An Associated Press headline reads, "House Passes First Rewrite of Nation's Tax Laws in Three Decades, Providing Steep Tax Cuts for Businesses, the Wealthy." And so on.

There will always be ideological arguments regarding the efficacy of tax cuts for corporations and the wealthy, but at some point people are going to find out that they've gotten one, too. The nonpartisan liberals at the Tax Policy Center concede that 80 percent of Americans will see a tax cut in 2018, and that the average cut will be $2,140—which might be something to scoff at in D.C., but I imagine a bunch of voters surprised by these savings will be less cynical. Only 4.8 percent of Americans will see a tax increase.

Like Obamacare, people don't know what's in the bill. But unlike Obamacare, the repeal of the individual insurance mandate gives millions a choice. The passage of Obamacare, after all, upended lives. The Affordable Care Act became synonymous with "health care insurance," and voters attributed everything that went wrong with that insurance to the bill. And since Democrats offered a litany of fantastical promises about the future of health care, the disapproval was well-deserved. Millions began seeing their insurance plans discontinued as soon as Obamacare was implemented, despite assurances from the president and pliant Democrats that no such thing would happen. For many, premiums in the individual markets doubled over four years of Obamacare. Voters dealt with these tangible, real-life consequences.

Whatever valid concerns there are about debt or spending (and they are valid), it is unlikely that tax cuts will have similar long-term consequences on voting as those on health care. It is more likely that tax cuts will do little to change the dynamics of the coming years. But it is plausible that because of the overreaction from the left, millions of Americans who thought they were going pay more in taxes will find a new child credit and be thankful.
As an ideological matter, every time a Democrat claims that keeping more of your own money is tantamount to "stealing"—which happens often—voters should remember this is fundamentally a debate between people who believe the state should have first dibs on your property and people who don't. The only way to frame the bill as a tax hike is by using the 2025 expiration of individual rate cuts. And the only way they won't be extended is if Democrats decide to raise taxes again. These are debates Republicans should embrace.

That's not to say tax reform is a panacea for Republicans. It's far from it. Historically speaking, the party in power will likely lose a bunch of seats in the 2018 midterms. But the claim, as Democrats are sure to make, that those losses are unique or tied to the toxicity of an agenda item—particularly a tax cut, which is generally popular among Americans (when they know it exists)—is far-fetched.

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  1. I wouldn’t be so sure that people will notice the tax cuts. The Obama stimulus included a middle-class tax cut that benefited 5-digit earners (the vast majority of the country) to a greater extent than this bill and yet almost none of them noticed (see here for some discussion: http://www.taxpolicycenter.org…..s-tax-cuts). When I say “almost none,” I mean less than 10% of them in the first year of implementation. A few years later, if memory serves me correctly, polling found more than 10% but fewer than 20% knew they’d received a tax cut.

    1. They’ll notice, but probably not until April 2019 when their refunds are 2K higher than they expected. Might not help Repubs in Nov 2018.

      1. Maybe. It depends on whether and how employers adjust withholding. And then will people notice?

        You are right that the real data won’t be available until April 2019 when they see they don’t have to pay a penaltax. And they might see a comparison by TurboTax between 2018 and 2017 taxes. Who knows?

        1. If people’s paychecks get the withholding adjusted, people will definitely notice.

          1. I have direct deposit and never see what I’m getting. I probably wouldn’t notice until I have a check bounce.

            1. Seems like a good strategy.

        2. I’m certainly no expert, but from what I’ve been reading, the IRS (not employers!) will be adjusting withholding amounts, and people should see their take-home pay increase in February.

      2. That’s what I was thinking. They won’t see those tax reductions on a tax form or in their refund until after the election. I’d think most should see reduced payroll taxes, though, but how many will notice that?

    2. The Obama stimulus included a middle-class tax cut that benefited 5-digit earners (the vast majority of the country) to a greater extent than this bill and yet almost none of them noticed

      Because you’re not accurately describing what really happened. What really happened is that the rate cuts that were passed in the Bush administration were initially supposed to automatically sunset in the year 2010, but then Obama eventually agreed to make them permanent for everyone except the very highest earners (I think the threshold was set around $400,000 or something close to that).

      So the reason why almost nobody noticed Obama’s “tax cuts” as you describe them is because almost everyone’s rates actually stayed the same instead of going back up again like they were originally supposed to.

      1. But not raising taxes is the same as a tax cut because taxes would have been raised but for the benevolence of our glorious leaders.

    3. Barry and his democrats gave a few free dollars to welfare cheats but nothing to workers. They loaded up on the taxes including a tax he signed his first week squatting in the WH. Your memory is faulty. The Kenyan years were 8 years of poverty and suffering.

    4. Start earning $90/hourly for working online from your home for few hours each day… Get regular payment on a weekly basis… All you need is a computer, internet connection and a litte free time…
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  2. inb4 “You’re taking Nancy Pelosi out of context!”

  3. Comrades!!!

    Join all democrats and socialists as we oppose the terrible tax bill as it favors the evil KKKorporations!!!

    #WeWillPayMoreTaxesThenWeHaveTo2018!!!

    Let’s show the Evil GOP and their PuppetMasters the evil KKKorporations!!!

    We will pay more taxes than the IRS wants us to to show the Evil GOP and their PuppetMasters the evil KKKorporations!!!

    #WeWillPayMoreTaxesThenWeHaveTo2018!!!

  4. The “average” cut will be $2,140. That’s a meaningless number.

    You could give every American a $1 cut then give everyone at the top HUGE cuts until the “average cut” is $2000, and crow about how everyone is getting a tax cut.

    Also, only 80% are receiving tax cuts, 20% will pay the same or more. Is $2,140 the average ONLY for people receiving the cut or is that the average including losses and gains together?

    What’s the modal average? Median?

    1. I’m not accusing anyone of any shenanigans, just requesting that you either fully explain the number or omit it.

      1. fully explain the number

        here you go.

      2. I’LL PISTOL WHIP THE NEXT PERSON WHO SAYS SHENANGIANS

          1. NOBODY LIKES A WISENHEIMER

            1. I for one like a wiseheimer.

        1. What’s the place you like to go to, with the crazy crap on the wall and the mozzarella sticks?

    2. Most people are going to see a cut of $800, $1600 if they are married, due to the higher standard deduction and the removal of the personal exemption. If you itemize and live in a high cost, high tax state, you’ll probably break even or be among the 5 percent paying more.

      1. Iirc democrats in blue cities will see most of the increases. Hence the current outrage and also the likelihood it won’t matter.

        1. Right… b/c tens of millions living in NY, NJ, CA, etc are held hostage by the craphole red states.

          “won’t matter”? Maybe more like accelerate the increasingly inevitable dissolution of the union (which is what needs to happen) there is *no* common ground and each side despises the other far more than they do any outside force.

          How long do you think the states making the bulk of the money for the US will continue to subsidize rich GOP downers and rich white libertarian ahole hypocrites in red states just because the rabble you guys keep wallowing in poverty can be bought with a racist dog whistle, promise of a coal mining job and a wall, and $500?

          1. (deep bow of respect)
            UNLESS you defend the other side.
            Left – Right = Zero

          2. Right… b/c tens of millions living in NY, NJ, CA, etc are held hostage by the craphole red states.

            Move to the city and learn to code.

          3. The rest have been subsidizing NY CA IL NJ for decades through the Fed tax exemption for state taxes. This bill levels the playing field somewhat.

    3. I just spent $2200 fixing my car today. So $2140 is hardly meaningless.

      1. WHY DIDN’T YOU JUST USE THAT MONEY AS A DOWN PAYMENT FOR A NEW CAR YOU SILLY GOOSE

        1. Why are you yelling today?

          1. THE TAX CUT APOCALYPSE IS VERY LOUD

          2. You have to tell to drown out Hihn these days

            1. Yell*

    4. Well, if you want to see more statistics here you go.

  5. I like to think the election result was also a reaction to Obamacare. I haven’t seen too much discussion on how much of an impact O’care really had on election night.

    Obama. Not gone enough.

    1. Obama. Not gone enough.

      CANADIAN GRAMMAR IS WEIRD

    1. Crusty seems to have gotten himself into either a really bad batch of egg nog or a really good batch of egg nog, one.

      1. OR A DAD PATCH OF LEG HOG IF YOU KNOW WHAT I MEAN

            1. Do we need to call someone for you? Maybe you should stop by our emergency department, let us have a look at you; on the other hand…carry on.

              1. WHY DO YOU WANT TO LOOK AT ME ARE YOU A VOYEURISTIC FREAK

                MORE LIKE BOYEURISTIC AM I RIGHT

        1. And…we can pinpoint the exact moment at which Crusty had his stroke…

          1. Switch to present tense. It’s still running.

            1. Unfortunately, we’re still waiting for you to have yours.

      2. I was literally going to make that same joke above at the same time you did, but then the 80s called and I had to give them their joke back

          1. Crusty watches GLOW for the costumes.

        1. In all seriousness, I was going to say that Crusty was hitting the egg nog early and by egg nog I meant cocaine, which is technically way more 80s than your joke. But close enough

          1. WHAT DO DUCKS LIKE TO SMOKE?

            QUACK COCAINE

            1. I will have to remember that one

          2. And way better than egg nog.

        2. It’s not my fault i was born then.

  6. Try as I might, I can’t think of any tax cut that Democrats would approve of. They’d whine about “plutocrats” no matter how the tax code was restructured.

    1. Sales tax on feminine hygiene products.

  7. No way the hag is losing in ’16 to that doofus Trump, either!

  8. The group likely to be most dissatisfied with the new tax bill is higher-end wage earners in places with high state and local taxes who will run into the $10,000 deduction cap. Since these places are already Democrat strongholds, it stands to reason that their echo chamber tells them this is a decisive issue — in spite of the fact that increased Democrat turnout in such places will do them no good in a Presidential election, and little good in Congressional ones.

    1. Yep. Guys like Welchie Boy, who has been crying like a little bitch about it on Twitter for weeks and weeks on end now.

      1. WHAT A DISAPPOINTING NICKNAME

        1. It’s rather endearing.

          And Fat Squelch is just lying there on the sidewalk.

          1. Say what you will about Simple Mikey, he’s not a low-hanging-fruit kinda guy.

  9. Sure, people will like the tax cuts in vacuo.

    The question is whether they will like the tax cuts + the spending cuts that will be necessary to make the tax cuts fiscally viable.

    1. Yes, the proverbial “other shoe.”

    2. Sounds like a good reason not to cut spending.

    3. So you want spending cuts then?

    4. The question is whether they will like the tax cuts + the spending cuts that will be necessary to make the tax cuts fiscally viable.

      The people who benefit from the tax cut will likely also like the spending cuts.

      The people who will hate the spending cuts likely already hate the tax cut.

      1. The people who only benefit a little bit from the tax cuts won’t like the spending cuts either. The ones who don’t like the tax cuts plus the ones who won’t like the spending cuts (e.g. old people) end up being a lot of people. Ergo, spending cuts won’t be made, unless the GOP really cares about deficits (they don’t).

  10. oh no the gop lost the support of the blue states they’ll never get elected again!!!!

    It’s kind of funny when today’s progressive panic is faux concern about a faux crisis for the Republicans.

    1. You know there’s a whole house of representatives, right?

      1. It will be interesting to see what happens to Republican representatives from California and New York over the next four years.

        Will voters in their districts blame them for the tax hike and vote Democrat or will they blame Sacramento/Albany for the tax hike and become even more Republican?

        1. Well those reps generally don’t come from the high-cost cities, so it’s an open question how many R voters will notice the loss of SALT after the doubling of the standard deduction. I have no experience as a middle class familyman in upstate NY, so maybe it is a bigger deal than I imagine.

          1. The doubling of the standard deduction isn’t as big a benefit as you’d think as most of the increase in the standard deduction is offset by the elimination of the personal exemption.

          2. And those reps’ constituents are still paying California/New York high-cost state income/sales tax even if they don’t live in a high-cost city. Though again, they may blame the state democrats instead of the federal republicans for it.

        2. Will voters in their districts blame them for the tax hike and vote Democrat or will they blame Sacramento/Albany for the tax hike and become even more Republican?

          I doubt it. They will likely cheer on the Republicans and use it to demand lowering state taxes.

          Few people will see a tax hike to begin with anyway, since the tax cuts tend to make up for the SALT deduction limits. That is, overall, most of these people will simply not see much of a benefit from the tax cut, and they will blame Democrats and high state taxes for that.

          1. What people will see at some point is an expanding economy thanks to the corporate tax cut. No, they won’t get a refund check but since we all end up paying these taxes it functions as an across the board tax cut. More investment into the real economy and less into the black hole of the Treasury.

            1. “An expanding economy thanks to the corporate tax cut”.

              I’ll believe it when I see it. The 4-6% that the GOP predicts that is…, not the 2-3% rate it was already moving around before Trump was elected.

        3. As a resident of a California district with a GOP rep. I can almost assure you that fiscal conservatives in these districts are under no illusion that Democrats are a viable option. Interestingly, the only person I’ve heard whine about the SALT limit is a flaming liberal.

        4. As someone living in upstate NY, I can tell you I blame NYC for just about everything wrong with the state. I’ve been advocating for many years to kick them out.

  11. Also, think about what’s going to happen to the “mainstream” media’s already in the toilet, record low credibility when Joe Sixpack finds out that the scum in the JournoList have been lying to him yet again.

    1. He’ll have to sober up to notice. And some shiny new object will certainly distract him from noticing.

  12. Democrats are opposed to tax reform because both Republican and Democrat voters will be pleased with the lower tax rates putting more money in their wallets. Not a single Democrat voted for it so they can’t claim it was a bipartisan effort. Taxpayers can recalculate their tax withholding and submit a new W-4 form to their employer or other source of income or leave current deductions in place and enjoy a substantial refund in 2019.

    1. It’s been a hugely long time since I filled out a W-4. Isn’t it based on dependents rather than an actual withholding number? If so, wouldn’t you see an immediate change in your paychecks? Our company uses a payroll processing service, so presumably they would do this automagically…

      I guess I’ll know in three weeks.

      FWIW, there is a lot of joy over this tax bill at the 40 employee private business I work at.

  13. I didn’t get a tax cut at any time during the Obama years. And I suspect that even for those that did, it was awful hard to tell they got one when their insurance premiums more than doubled and their deductible went up to $10,000.

  14. The unpopularity of the tax cuts will wear off. Right now they are unpopular because … psychology. If you have $10 to split in a group of 10 people and you give $5 to one person and $1 to the other 5, the other 5 will be unhappy even though they are still getting a free $.

    However, when people see that they actually have received a tax cut, they may not be jumping up and down but they will not be as negative about it.

    What *would* be very unpopular is any resulting entitlement/benefit cuts that may be made in the future in order to (attempt) to offset the larger deficits. I don’t think spending cuts to Social Security or Medicare will actually be made by the GOP because they will be too unpopular with likely (older) voters. Cuts to food stamps, aid-to-poor families with dependent children, medicaid for disabled or mentally ill people etc. which are politically possible because the poor and disabled don’t have much political capital with the GOP, will hardly make a dent in the deficit. There just isn’t enough money spent in those areas to make a big difference. Deficits will keep rising.

  15. “Only 4.8 percent of Americans will see a tax increase.”

    Since many, perhaps most, of those tax increases will occur in blue states and cities that soak their citizens, the Republicans are on sure ground because the enormously high local taxes in Democrat controlled locales will disproportionately affect the Dems. How many of these increases are because of changes in SALT (State and Local Taxes) deductions?

    So where’s the problem? The blue states are already talking about reducing taxes and expenditures…

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