How Badly Did the GOP Hurt Itself with the Tax Bill?

It’s well worth reading John Judis’s essay raising doubt about how certain it is that the Republicans will suffer in the midterm elections, or even in 2020, due to the passage of their plutocratic tax bill. Even if you don’t agree with many or most of his points, you should at least consider them. So, why are the Democrats overly optimistic about their assumed political windfall?

Judis begins by asserting that “most American voters don’t object to inequality” unless “there is nothing in it for them.” We can debate exactly how true that is, but he points out that however skewed toward corporations and the rich the bill might be, there are some things in it that less affluent people will notice and appreciate, including “the increase in the child credit and standard deduction and lower rates.”

Judis predicts, with some justification, that people don’t really care about the deficit and that banging on about it isn’t necessarily sensible anyway—neither on the merits nor politically. And while he predicts that the bill will cause the same kind of irresponsible and unregulated speculation that caused problems in the 1920s and in the lead-up to the Great Recession, he feels that in the short-term, the tax bill will boost consumer spending and corporate investment and, consequently, the economy.

Judis acknowledges that the changes in how state and local taxes and mortgage deductions are handled will alienate suburbanites in high-tax states, but he see the resulting fallout as limited to the possible loss of a few extra House seats, with little benefit in other parts of the country or in statewide races.

Judis sees it as an optical problem that the individual cuts sunset in 2025 but the corporate rates do not, but he expects this to manifest as a political liability in 2025, not in 2018 or 2020.

Judis concludes by expressing skepticism about polling that shows that the bill is unpopular, as he doesn’t think it is an expression of substantive opposition to the features of the legislation.

I’m inclined to concede most of these points, but the areas where I disagree could be important.

Given that Donald Trump was just elected president, taking the cynical view of the American electorate might seem like an appropriate default position, but I don’t think it’s fair or supportable to say that Americans’ simply don’t care about wealth inequality. I think a lot of people care about it, and I believe it can be politically activated with or without demagoguery. During the Great Recession, Americans were being taxed at an historically low rate, but it proved easy to mobilize an impassioned political reaction based on the idea that we’re “Taxed Enough Already.” Complaints about fair treatment can still gain traction, and it’s even easier when the underlying grievance happens to be true. Hammering the Republicans for favoring the wealthy and corporations is always at least somewhat effective, but I think it will be especially effective in this cycle.

As to the breadth of the Republicans’ vulnerability in the suburbs, even if it is true that it is going to be limited, if it adds a few House seats to the Democrats’ column it could be the decisive difference between winning control of the House of Representatives and failing to do so. In other words, Judis could be right in his analysis of the impact but wrong in assessing the consequences.

I think it’s important that the bill is already unpopular, and that people are regarding it with deep skepticism. It’s true that they aren’t really reacting to the the substance of the bill. How could they when no one was able to read it and the provisions kept changing to the last minute? Their dissatisfaction is more an expression of their distaste for the process and their distrust of the authors of the bill and of the president. It’s also a reflection of who they currently believe when they read or watch the news, and the condemnations of this bill have been widespread in the mainstream media.

We saw something similar with the Affordable Care Act, where the bill was unpopular and a political liability for the Democrats who had voted for it. This, too, had to do more with the process than the substance, and also with who won the media war and what news sources the people chose to believe. It took several election cycles for Obamacare to become popular, and by that time the Democrats across the country had been decimated. So, a bill that starts off in a big hole is not likely to climb out of it on short schedule, and I doubt very much that people’s perceptions of this legislation will improve much between now and next November. The surest way for the bill to become more popular is for Trump and congressional Republicans to become more popular, and that just doesn’t seem like a good bet to make.

If Judis is correct that the immediate impact of the bill will be beneficial to an already booming economy, that will mitigate the damage to the Republicans to some degree. On the other hand, if the economy unexpectedly contracts, there’s no telling how ugly things could get for the GOP.

Overall, I think Judis is providing a worthwhile set of cautionary statements, but my guess is that the abyss is real—the only question is how deep it will turn out to be.

Martin Longman

Martin Longman is the web editor for the Washington Monthly and the main blogger at Booman Tribune.