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.