Republicans are hoping that tax reform will restore their flagging popularity,
For one thing, they need to appeal to struggling Americans, but most of the benefit of a tax bill will flow to the affluent. The top quintile accounts for more than three-quarters of federal income tax receipts.
Thanks in part to the Reagan tax reform, 44 percent of households -- mostly low-income -- owe no federal income tax. Unless the proposal provides for refundable tax credits, therefore, a large fraction of the public will not benefit. (And conservatives on the Hill tend to oppose such credits.)
Last month, Al Hunt reported at Bloomberg:
[T]ake a look at the latest Bloomberg poll. It suggests that a tax law is likely to be as tough to pass as the health-care bill that disintegrated this week in the Senate, and which Trump was calling a piece of cake just five months ago. The poll and other reporting indicates that taxes are no longer a galvanizing political issue, even for Republican voters.
The survey, conducted July 8-12, shows that only 4 percent of Americans see taxes as the most important issue facing the country. By contrast, 35 percent said they considered health care to be the No. 1 issue. Concerns about jobs, terrorism and climate change also ranked far ahead of taxes. A slight majority predicted that Trump would fail to achieve his promise to reform the tax code.
"There's a fury in the electorate about not getting things done, but there's no consensus on how to get tax reform done," said Ann Selzer of the Des Moines, Iowa-based public-opinion firm Selzer & Company Inc., which conducted the poll.
None of the Bloomberg poll numbers are encouraging for the White House. By a margin of 49 percent to 42 percent, respondents said they don't think cutting corporate taxes will create more jobs.
The focus of any tax initiative, Trump vows, will be on middle-class tax cuts. That sounds politically appealing, but 70 percent of those polled -- including two-thirds of Republicans -- said they'd oppose tax cuts that would increase the federal deficit. Only 18 percent disagreed.