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Defying the Odds

Defying the Odds
New book about the 2016 election.

Monday, December 11, 2017

The Bizarro Politics of the Tax Bill

In Defying the Odds, we discuss the tax issue in the 2016 campaign.  

Sahil Kapur at Bloomberg:
The 2009 economic-stimulus bill contained a one-year tax break worth $800 for married couples in 95 percent of working households -- a little over $15 a week. A February 2010 poll found that just 12 percent said their taxes had been reduced. More than half, 53 percent, said they saw no change. A remarkable 24 percent thought their taxes had increased.
“Virtually nobody believed they got a tax cut,” said Jared Bernstein, an economist who worked in former President Barack Obama’s White House. He called it a source of frustration at the time.

That 2009 tax cut contains warning signs for President Donald Trump and congressional Republicans. Their tax plans would deliver about the same level of initial relief to households with incomes between $40,000 and $100,000 -- roughly $800 on average -- according to data from Congress’s Joint Committee on Taxation. If those numbers hold, and if history’s any guide, Trump’s working-class voters may not feel the tax cut he has repeatedly promised them.
Alexander Bolton and Naomi Jagoda at The Hill:
Rubio on Friday warned there are “going to be problems” if Senate and House negotiators working on the final legislation reduce the bill’s child tax credit or increase the corporate rate without making the child tax credit refundable to help lower-income families.
“It makes a lot of sense in a tax reform bill to provide some relief to those on the lower end of the income scale as well as the upper end,” said Whit Ayres, a Republican pollster who does work for Rubio.
Ayres said Rubio is right that “it will help the overall perception of this bill if it’s perceived of helping everyone who’s working, not just those at the upper end of the income scale.”

Another Republican senator who commented on the condition of anonymity said that “lowering the corporate rate is never popular.”

“Forty-four percent of the country won’t see anything and then they see headlines about a big corporate rate cut,” said the lawmaker, explaining the weak public support for the bill.