While most of the attention on Congress was focused on then-Supreme Court nominee Judge Brett Kavanaugh in late September, House Republicans quietly passed yet another round of tax cuts, sending the bill to the Senate, which appears to have no intention of taking it up.
You probably aren’t hearing them talk much about it on the campaign trail — or about the tax bill they passed late last year, either.
Many in the GOP thought tax cuts would be a 2018 midterms winner. They’re not.
Sahil Kapur and John McCormick reported for Bloomberg this week that the Congressional Leadership Fund (CLF), the primary House Republican Super PAC and the highest-spending political group this election cycle, has not been talking about tax cuts in its television advertising nearly as much as anticipated, according to data from Kantar Media’s CMAG, which tracks political advertising.
Of the 31,200 broadcast ads the House Republican PAC put out in the first nine months of 2018, just 17.3 percent referred to the 2017 Tax Cuts and Jobs Act, the most significant piece of legislation this Congress has passed. And mentions of taxes have declined over time: In February, 72.8 percent of CLF’s ads were touting tax reform; in September, it was 16.8 percent.
That’s not to say the group isn’t paying any lip service to taxes — CNN reported that the group has spent more than $5.4 million on tax ads this election cycle, $2 million of which focused on tax reform. But given that many Republicans at the start of the year were convinced their tax bill was going to be the winning issue in 2018, the fact that it hasn’t turned out that way — and that some of their ad messaging signifies they’re well aware of it — is notable.
“The argument Republicans have been making is fundamentally hollow,” Andrew Bates, a spokesperson for liberal campaign group American Bridge, told me, referring to Republican efforts to sell the tax bill to voters. “You can’t say, ‘Hey, this is a game-changer,’ when the game isn’t changing for you.”
Democrats got out in front on messaging, and then the facts of the bill couldn’t reverse the narrative
Right after the tax bill took effect, House Republicans had their marching orders: Talk about it often.
“For members or anybody else who cares about keeping control of Congress, if you find yourself talking about anything but the middle class tax cut, shut up and stop talking,” Corry Bliss, who runs CLF, told the New York Times back in February. “Any time spent on TV talking about anything but how we’re helping the middle class is a waste of time and does nothing to help us win in 2018.”
But over time, Republicans appear to have determined that’s not the case. Polling shows that the American public hasn’t been particularly impressed with the tax bill.
According to a RealClearPolitics average, 39 percent of Americans approve of the legislation and 42.5 percent disapprove of it. An internal poll commissioned by the Republican National Committee and obtained by Bloomberg last month said that, by a two-to-one margin, Americans see the tax bill as benefiting large corporations and rich Americans over the middle class.
Most voters aren’t noticing a personal benefit to their finances, either. A recent Gallup poll found that 64 percent of Americans said they hadn’t seen an increase in their take-home pay, and 51 percent said the cuts hadn’t helped them financially.
Frank Clemente, executive director at progressive coalition Americans for Tax Fairness, said that in his view, the anti-tax bill message succeeded for two reasons: Democrats did a good job of casting it as overwhelmingly benefiting corporations and the wealthy. Republicans, on the substance of the bill, haven’t been able to take back the narrative.
“You can’t defeat something — which is our framing of the issue and people accepting our framing of the issue — with nothing, which is that people aren’t seeing a pay boost,” he said.
According to estimates from the Center on Budget and Policy Priorities, while most Americans will benefit at least somewhat, the top fifth of earners get 70 percent of the bill’s benefits, and the top 1 percent get 34 percent. The new tax treatment for “pass-through” entities — companies organized as sole proprietorships, partnerships, LLCs, or S corporations — will mean an estimated $17 billion in tax savings for millionaires in 2018. American corporations are showering their shareholders with stock buybacks this year thanks in part to their tax savings.
The conservative Heritage Foundation has estimated that taxpayers will save an average $1,400 this year. An Americans for Tax Fairness analysis found the Koch brothers could save up to $1.4 billion — 1 million times the amount.
The GOP appeared to realize quite early on their tax bill campaigning might not work out as planned. Ahead of the March special election in Pennsylvania’s 18th District, in which Democrat Conor Lamb narrowly defeated Republican state Rep. Rick Saccone, Republicans largely abandoned the tax message.
“Democrats quite possibly have better bullets to shoot at us, and frankly, I think that our voters have moved on to other issues,” one Republican strategist, who asked to remain anonymous in order to speak freely about the matter, told me in July. “It’s not as big of an issue as we thought it might have been in January or February of this year.”
Other factors could be making matters worse
While many Republicans may not be over-eager to talk about the tax bill, some Democrats are pushing the issue — especially when they’re able to include it into a broader narrative about the deficit and entitlement spending.
The Treasury Department said this week that the federal budget deficit had increased to $779 billion in fiscal year 2018, a 17 percent increase from the prior year, in large part because of the tax cuts Republicans had claimed would pay for themselves.
And as Vox’s Dylan Scott explained, just like clockwork, Senate Majority Leader Mitch McConnell told Bloomberg Congress should target Social Security and Medicare cuts in an attempt to address the debt. Per Scott:
Democrats are trying to capitalize on it.
“There’s a whole new level of clear and present danger for these programs,” Tyler Law, a spokesperson for the Democratic Congressional Campaign Committee (DCCC), told me. “People are rightfully scared, and that’s resonating. In poll after poll, district by district, voters respond very strongly to a message that takes the tax bill head-on as a handout to the wealthy and large corporations that will lead to deep cuts to Social Security and Medicare.”
He said he thinks the tax bill has been a “political disaster” for Republicans.
Ryan Alexander, president of nonpartisan group Taxpayers for Common Sense, told me she thinks the timeline for Republicans to tout the tax bill has, to a certain extent, passed.
“To the extent that people saw an increase in their paychecks, which a lot of people did, it wasn’t that big, and now they’re used to it,” she said. “Any corporate announcements because of this tax bill, those are also remote in time, and they’ve had time to go through the news cycle.”
And taxes aren’t the main economic issue in the headlines right now, either. “Particularly in farm states, I think the trade story is the dominant economic story there,” Alexander said.
There are still groups betting on taxes. Conservative lobbying group Heritage Action for America is messaging exclusively around the tax bill for the 2018 midterms and is spending $2.5 million in 12 congressional districts on direct mail, digital advertisements, and television spots that are both positive and negative. The candidates they’re supporting include Dave Brat in Virginia, Yvette Herrell in New Mexico, and Rod Blum in Iowa.
The Senate Leadership Fund, a pro-Republican Super PAC dedicated to holding the majority in the Senate, has mentioned taxes in some of its ads, though its message appears to be tied more to threats that Democrats will raise taxes, not positive talk of the tax bill. One ad goes after North Dakota Democratic Sen. Heidi Heitkamp over her opposition to the estate tax, another attacks Tennessee Democratic Senate candidate Phil Bredesen over raising taxes when he was governor.
Jessica Anderson, vice president of Heritage Action, told me the group feels the tax bill is the “most compelling” of President Donald Trump’s and Congress’s policy accomplishments since he’s been in office. “We are finding that it’s working when the data is actually localized,” she said. “If [candidates] are saying the tax cuts help you, and there’s no evidence of how or why it helps them, then it totally falls flat.”
Republicans might have already gotten what they wanted out of the tax bill
But the tax bill did make one group very happy: the donors who are helping fund many Congressional Republicans’ reelection campaigns.
Before the tax bill was passed, South Carolina Republican Sen. Lindsey Graham said “financial contributions will stop” if the legislation failed. New York Republican Rep. Chris Collins, who was charged with insider trading in August, said last year his donors were telling him, “Get it done or don’t ever call me again.”
Republicans got it done, and they were rewarded.
Billionaire casino magnate Sheldon Adelson cut CLF a $30 million check after the tax bill passed and Speaker Ryan paid him a visit. He’s spending tens of millions of dollars this election cycle on helping Republicans.
CLF and the GOP can spend that money on whatever message they want. The tax bill is paying dividends to Republicans financially, even if it’s not playing particularly well with voters.
Democrats are continuing to try to seize on that part of the narrative, too. The DCCC is running one digital ad that shows a group of business executives talking about how much they’ve benefited from the tax bill, while others lower on the chain have obviously not.
“It’s complete payback [to donors], and payback in spades,” Clemente, from Americans for Tax Fairness, told me. “It’s a phenomenal return on investment.”