ANALYSIS: The Republican tax plan is a hard sell
It's unclear if the average middle-class American is on board.
— -- Republicans finally have an actual tax reform bill, and after disagreements over what to call it, the legislation has a name too.
But if the debacle over health care this summer was any lesson for the party, having a bill and a title does not mean Republicans have a messaging strategy.
In a lot of ways, Republicans seem to be playing from behind today. A rollout that should have been about putting more money in the pockets of average Americans (who doesn’t love that?) was shadowed by headlines about tough legislative battles ahead and continued intra-party disagreements.
The pitch from Republicans is that the average middle class American will take home almost $1,200 dollars more, but it is unclear if the average middle class American is on board.
The discussion over the last few days has centered around ways average Americans may pay more in taxes, not less.
Though it seems this bill leaves 401(k) retirement plans untouched, the back and forth about whether the cap for pre-tax savings would be changed brought close attention to how exactly Republicans would be trying to make up some revenue and lower the costs of this plan in the fine print.
Some of the so-called “pay fors” that did make it in –- changes to the tax code designed to bring in cash to the federal government to make up for other cuts -- are going to be hard political sells.
Scrapping the popular student loan interest deduction plays right into Democrats' hands. They have been messaging that the federal government needs to do more to offer relief from student loan debt, not less.
Reducing the available mortgage interest deduction down to $500,000 is another serious change to a widely used deduction.
The Republican bill does double the standard deduction, so it is possible for many people the loss of these specific itemizations may come out in the wash.
That said, the messaging could still be hard.
The fact that major lobbying groups in the estate realtor and home construction space are already opposing this version does not help Republicans, who normally work closely with those folks.
The bulk of this bill, in terms of numbers and costs, is the slash to the corporate tax rate.
Polling shows that it is also widely unpopular. While there is a sentiment among voters that Republicans and President Trump understand business and should be trusted to spur growth, polls show many Americans think corporations right now pay too little in taxes, not too much.
For example, according to an ABC News/Washington Post poll this fall, 65 percent of Americans say large business corporations pay too little in taxes. A CBS poll out this week found that a majority of Americans want to see tax increases for large corporations (56 percent) and for the wealthy (58 percent).
More than half of respondents think cutting taxes in general would help the economy, but most Americans are skeptical of the idea that corporate tax cuts would create jobs. “About two-thirds of Republicans (63 percent) say corporations would use any money from potential tax cuts to create jobs, while most Americans (57 percent) overall disagree,” the poll goes on.
The corporate tax cut and elimination of the estate tax makes this bill expensive and some fiscal hawks, especially those not seeking re-election, may put their foot down and keep this bill from moving in the Senate.
But perhaps the most glaring potential political pitfall, for the GOP, is the big man in the White House who still has not released his own tax returns.
Democrats are already pouncing on this low-hanging fruit.
How will Americans know if the president is not backing a tax break for himself?
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