Both the WaPo's James Hohmann and TPM's John Judis believe the Republican Party won't suffer as much as people hope after passing their massive giveaway to big corporations. Judis:
I am not a fan of the new tax bill that the Republican Congress passed. It will widen the gap between the wealthy and everyone else and increase the likelihood over a decade or so of another crash. And it contains all kinds of unpleasant ancillary provisions, such as the one killing the Affordable Care Act’s mandate. But I don’t buy the argument – voiced by Democratic pundits, political consultants, and even a few economists – that the bill will doom the Republicans to defeat in 2018 and even 2020. Like many things I read or hear these days from liberals, it’s wish fulfillment disguised as analysis.
Democrats argue that the bill will be unpopular because it increases inequality by giving huge tax breaks to the rich and corporations. But most American voters don’t object to inequality and to the rich per se. (I wrote a long essay for TPM arguing this two years ago, and it was borne out in the 2016 election.) They object to inequality when a policy is so skewed that everything goes to the rich – when there is nothing in it for them. And they object to inequality when, as in 1932 or 2008, they see it conveying favor on a group that is responsible for wrecking the economy. But neither condition is likely to hold in this case.
Hohmann, yesterday:
THE BIG IDEA: The best thing going for Republicans right now is low expectations.
[H]ere’s the truth: 8 in 10 Americans will pay lower taxes next year, according to the nonpartisan Tax Policy Center’s analysis of the final bill. Only 5 percent of people will pay more next year. Mostly, those are folks who earn six figures and own expensive houses in places with high local taxes, such as New York and California.
Bottom line: Nancy Pelosi says, “This is Armageddon.” But the sky will not fall. At least not next year.
To be sure, over the long-term, this bill may set in motion a fiscal disaster a la Kansas by exploding the national debt and forcing painful cuts to popular programs, including entitlements. The rich and corporations do get the vast majority of the benefits. The new code will cause confusion and uncertainty. It will also worsen income inequality. And there’s a chance that it gives the economy a sugar high that forces the Federal Reserve to raise rates faster than planned and hastens a recession.
Overnight, though, Hohmann got a lot of pushback from Democrats:
In the two-and-a-half years I’ve been writing the 202, I’ve never received so much pushback. Top operatives at all the relevant Democratic committees and outside groups, as well as the most prominent progressive pollsters in town and campaign managers in the states, argued passionately that the tax bill is not going to become a winner for the GOP. They shared a battery of private polling and reports on focus groups to make their case.
“Calling this thing a win because Republicans finally got something done is like saying the captain of the Titanic won when he successfully found that reclusive iceberg,” said Jesse Ferguson, the former director of the Democratic Congressional Campaign Committee’s independent expenditure arm.
1. Most folks who pay lower taxes will not save enough to care.
I noted yesterday that 8 in 10 Americans will pay lower taxes next year, according to the nonpartisan Tax Policy Center’s analysis of the final legislation. Only 5 percent of people will pay more next year, and mostly those are folks who earn six figures and own expensive houses in places with high local taxes.
Democratic pollster Geoff Garin of Hart Research replied that 80 percent of taxpayers will see an increase of less than 2 percent in their after-tax income, and it is not until you get to the 95th percentile that the after-tax income benefits are much greater. “There is no history of voters being grateful for tax cuts that small,” he said.
One thing is certain: Nobody knows nothing. But I'm pretty optimistic about November 6th.