Center for American Progress Action
The Tax Bill Will be an Albatross for House Republicans
The Tax Bill Will be an Albatross for House Republicans
Republicans can only blame themselves for their political misfortune when middle-class families see what their tax plan does.
Republicans have convinced themselves that they must pass a tax plan to maintain their political majority in Congress. As Heritage Foundation fellow and Trump administration tax policy advisor Stephen Moore said, “The Republicans are finally figuring out if they don’t pass this, the political consequences are going to be catastrophic.” Republican members of Congress, including Sen. Lindsey Graham (R-SC) have echoed similar statements. The truth is that passing a tax plan this bad—which now includes repeal of the Affordable Care Act’s (ACA) individual mandate—could be even worse for congressional Republicans’ political prospects.
Make no mistake, voting for this bill is likely to end a lot of political careers: Every single Republican member of the House will own this vote. The political ads against these members practically write themselves.
The robust string of Democratic victories in Virginia and New Jersey signal that the electorate has soured on both President Donald Trump and a congressional agenda that seeks to strip them of health care and raise their taxes, all while giving massive tax giveaways to millionaires, billionaires, and large corporations.
The electoral shift was particularly notable in suburban neighborhoods around major cities, which are increasingly diverse and educated. For example, in Rep. Barbara Comstock’s (R-VA) district, Republican gubernatorial candidate Ed Gillespie lost by approximately 13 points. Nearly two dozen Republicans find themselves in similarly racially diverse, educated districts won by Hillary Clinton in 2016. These members must be sweating the results from last Tuesday. They should keep these electoral shifts in mind when they cast a vote on this tax plan.
Reps. Mimi Walters (R-CA), Darrell Issa (R-CA), Ed Royce (R-CA), Steve Knight (R-CA), Dana Rohrabacher (R-CA), Jeff Denham (R-CA), Mike Coffman (R-CO), Carlos Curbelo (R-FL), Erik Paulsen (R-MN), Leonard Lance (R-NJ), John Katko (R-NY), Ryan Costello (R-PA), Patrick Meehan (R-PA), and Brian Fitzpatrick (R-PA) are just a sample of members who are directly under threat of seeing countless ads run against them in the upcoming election cycle highlighting all the disastrous elements hidden within this bill.
These members are committing political suicide just by supporting the tax bill’s goal. In order to fund tax cuts for millionaires, the bill throws many suburban middle-class families under the bus. But these are the very same middle-class families for which suburban Republican representatives, including those listed above, claim to be fighting. According to the Tax Policy Center (TPC), approximately 36 million working- and middle-class Americans—who make up the bottom 80 percent by income—will see their taxes increase under this plan; another 9 million Americans with higher incomes will see their taxes go up. Republicans counter this reality by saying their bill will double the standard deduction and expand some tax credits. But for many families, these policy changes don’t outweigh the additional loss of personal exemptions; indexing the tax code to the chained consumer price index (C-CPI); the stripping away of popular deductions; and the capping of the amount of mortgage interest that can be deducted.
The Republican tax package will specifically repeal, cap, or otherwise eliminate the following deductions:
- The medical expense deduction: A provision claimed by approximately 8 million middle-class families, this deduction is critical to the families that use it, specifically those with a family member who has long-term care needs.
- Student loan deduction: A provision that helps nearly 12 million Americans who are pursuing higher education. Moreover, its repeal makes it even harder for Americans to pay off their existing student loans.
- The home mortgage deduction: A report by the National Association of Realtors found that under one comprehensive tax reform option home pricing would fall 10.2 percent in the short run, devastating families’ financial security.
- The state and local tax (SALT) deduction: A report from TPC finds that 7 of the top 20 districts affected by a SALT repeal are currently represented by a Republican. These Republican members of Congress would see approximately half of their constituents lose their ability to reduce their tax burden.
These specific deductions and programs are custom-tailored to the same constituents that live in and vote in moderate, educated, and increasingly diverse districts like those highlighted above. When this tax package is so obviously bad for their constituents, and by extension their electoral success, it’s a wonder why Republican representatives from these districts will still vote for it.
Moreover, the legislation the House votes on this week will not be the final product, but congressional Republicans will own all the bad provisions all the same. The House and Senate are still resolving many of the differences between their two plans, but Republican House members are being asked to walk the plank on many deeply unpopular positions without any assurances that they would be protected in the final bill. This is acutely the case with the Senate’s option to repeal the individual mandate, which the Congressional Budget Office (CBO) estimates will result in premium increases of 10 percent in 2019. Premium increases of this magnitude would amount to an increase of $1,990 for a typical middle-class family of four. And that premium increase is on top of the 13 million fewer people with coverage by 2025. House members will soon have to own this provision too.
A similar political situation occurred during the health care fight, when the grumbling from House members was audible. Republican House members should stay crystal clear about what motivated voters in Virginia and how Americans are viewing their current proposal.
It’s hard to square the logic behind the Republicans’ fever to support a tax plan that so clearly harms their constitutes. That’s because, for many members, this support is a financial calculation. Rep. Chris Collins (R-NY) put it simply: “My donors are basically saying, ‘Get it done or don’t ever call me again.’” This statement is a far cry from President Trump’s chanted promises to “drain the swamp.” While Republicans have always paid lip-service to the middle-class workers and rural voters—a patchwork coalition that can forge a winning majority—their sole focus remains the millionaire and billionaire backers who have shelled out fortunes to elect them.
When big donors are still calling the shots in Washington, it is no wonder that the House Republican tax package most benefits the 1 percent. In the House plan, the richest Americans would see an average of $174,620 tax cut in 2018. The Center for American Progress has found that, under the House Republican tax plan, it will literally take a million years for a middle-class American to earn the amount that 11 of the Republican Party’s biggest donors will get from a single provision alone.
It is therefore no secret that House Speaker Paul Ryan (R-WI) and other Republican leaders are banking on donations to outweigh Americans’ disillusionment and frustration with the Republican Party. At least after 2018, with fewer Republican members holding seats in Congress, their money will go further.
Ryan Collins is a director of Government Affairs at American Progress.
The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.
Director, Government Affairs