Budget & Taxes

Tax Reform Becoming Less Popular

“It’s been six months since President Donald Trump signed into law the Republican tax cuts. During that time, the measure appears to have become less popular — not more. The GOP’s big 2018 midterms sales pitch isn’t working out exactly how party leaders thought it would,” Vox reports.

“According to a Monmouth University poll released this week, just 34 percent of Americans said they approve of the Republican tax reform package, compared to 41 percent who disapprove. That’s down from April, when 40 percent of Americans said they approved of the law and 44 percent did not. In January, respondents were evenly split, with 44 percent saying they approved and another 44 percent voicing disapproval of the plan.”

“Broadly, most polling shows the tax law is more disliked than liked by Americans. A recent Quinnipiac poll found 39 percent of respondents approve of the legislation and 46 percent disapprove of it. An Economist/YouGov poll found a smaller but still negative margin, with 38 percent approving and 40 percent not.”

New Tax Law Still Not Popular

A new Public Policy Polling survey finds that six months after the passage of tax reform, it’s still not really catching on with voters. Just 31% support it to 38% who are opposed, with 30% not sure one way or the other.

“The core problem for Republicans with tax reform is that voters continue to be skeptical it’s actually going to help them on a personal level. Just 30% say they think it will help their family’s finances, to 33% who think it will hurt, and 25% who don’t think it will have an impact either way.”

Also interesting: “51% think it will mostly benefit the rich to 30% for the middle class, and just 7% for the poor.”

Blue States Find Ways to Undercut New Tax Law

“Residents of some blue states may get a surprisingly big tax cut thanks to workarounds state lawmakers are crafting to subvert a controversial new cap on deductions for state and local taxes,” Politico reports.

“It’s a little noticed and unexpected dynamic in the partisan battle over the recent tax overhaul. The new SALT cap has been one of the biggest flashpoints, with Democrats from high-tax states complaining they were targeted by congressional Republicans.”

“Now, months after the law passed, Republicans are having trouble convincing voters that they’re really going to benefit from the cuts the law enacted. Meanwhile, lawmakers in blue states are magnifying the cuts with their workarounds.”

Republicans Seek Plan B on Midterm Messaging

“Republicans are working on a backup plan in case the GOP tax law does not turn out to be a strong selling point for their party in this year’s midterm elections,” The Hill reports.

“While the booming economy is expected to be a core pillar of the GOP’s midterm messaging, it’s unclear whether the party is going to get credit for the tax law, which has lagged in polls.”

“As a result, GOP leaders on both sides of the Capitol are emphasizing a breadth of legislative achievements as they seek to convince voters to keep them in charge and not deliver majorities to Democrats.”

GOP Staffers Who Wrote Tax Bill Cash In

“Top-level GOP aides who helped write the new tax law are now leaving the Hill in droves to cash in as lobbyists on K Street and other marquee private-sector destinations,” Politico reports.

“Powerhouse accounting firm PwC landed one of the biggest prizes, announcing Monday that Mark Prater, the Senate Finance Committee’s longtime GOP chief tax counsel, is the new managing director of its tax policy services group.”

Bannon Predicts Shutdown Before Midterms

Steve Bannon told CNN that he thinks President Trump will force another government shutdown this fall.

Said Bannon: “I believe that what he’s going to do is, as we come up on September 30, if that appropriations bill does not include spending to fully build his wall — not some $1.6 billion for prototypes, I mean to build the southern wall — I believe he will shut down the government.”

He added: “The wall is not just totemic. The wall is absolutely central to his program.”

CBO’s Deficit Forecast Dwarfs White House Estimate

“The Congressional Budget Office estimates the government will take in $1.9 trillion less in revenue and spend $300 billion more over the next decade than the White House estimated under its latest budget proposal if the plan were enacted,” the Wall Street Journal reports.

“Deficits would total $9.5 trillion over the coming decade, or $2.3 trillion more than the White House estimates.”

Gas Price Rise Erases Impact of Tax Cut for Most

Politico: “As Americans head out for traditional Memorial Day weekend road trips, they’ll confront gas prices of nearly $3 a gallon, the highest since 2014 and a 25 percent spike since last year. The increased cost of fuel is already wiping out a big chunk of the benefit Americans received from the GOP tax cuts. And things could get worse as summer approaches following the administration’s standoff with Iran and a move by oil-producing nations to tighten supplies.”

“The result: The economic and political benefits Trump and the GOP hoped to reap from cutting tax rates could be swamped by higher pump prices that Americans face every time they hit the road.”

Democrats Propose Swapping Tax Cut for Teacher Salaries

“Responding to teacher walkouts across the country, congressional Democrats on Tuesday proposed raising teachers’ salaries by canceling the tax cut for the nation’s top 1 percent of earners,” the AP reports.

“The Republican-controlled Congress was unlikely to support the idea of giving states and school districts $50 billion over a decade to fund the teacher raises at the expense of dismantling the hard-won tax bill.”

“But the proposal gives Democrats an issue they can use ahead of the November midterm elections. Teachers have won widespread support, even in conservative areas, as they complain about low pay.”

A Government Shutdown This Fall Is Very Possible

Stan Collender: “Even though the start of the next federal fiscal year is still four months away, Congress’s action…or, really, inaction…over the past week makes it virtually certain both that a continuing resolution will need to be enacted by October 1 to keep the government operating and that there will be a possible government shutdown this fall only six weeks before the midterm elections.”

GOP’s Big Fear Is Trump Will Shut Down the Government

Politico: “Senate Republicans didn’t put too many questions to President Donald Trump when he joined them for lunch on Tuesday, but the party’s most vulnerable incumbent did make one big ask: Please, Nevada Sen. Dean Heller pleaded, don’t shut down the government over funding for a border wall before the midterm elections.”

“Picking that fight during an election season would hurt Republicans at the ballot box, Heller told Trump… Though Heller prefaced his request by heaping praise on the president, Trump was noncommittal. ‘We’ll see what happens,’ he told the group.”

GOP Rebuffs Trump Push to Cut Spending

“Republican lawmakers are pushing back against President Trump’s request for Congress to cut $15 billion from programs including children’s health insurance and Ebola disaster relief, saying the vote could make them vulnerable to Democratic attacks in this year’s midterm campaign,” the Washington Post reports.

“A vote for the spending cuts could be helpful for House Republicans facing primary challenges from the right, but other Republicans, some facing tough midterm races, are balking, raising questions about whether the House will be able to pass the administration’s spending cut request at all.”

Some Top GOP Donors Upset Over Tax Law

“As national Republicans scramble their resources for a high-stakes midterm election year, some of the party’s biggest and most reliable donors have quietly withheld their support for Senate and House Republican groups out of frustration with the new tax law,” CNN reports.

“The donors who have boycotted… are leaders of prominent hedge funds… Collectively, they have bristled at what they view as favored treatment for corporations under the law. While the corporate tax rate was slashed from 35% to 21%, hedge funds are largely taxed at the top individual rate, which ticked down from 39.6% to 37%.”

Trump Wants Congress to Pull Back $15B In Spending

President Trump “is sending a plan to Congress that calls for stripping back more than $15 billion in previously approved spending, with the hope that it will temper conservative angst over ballooning budget deficits,” the Washington Post reports.

“Almost half of the proposed cuts would come from two accounts within the Children’s Health Insurance Program (CHIP) that White House officials said expired last year or are not expected to be drawn upon. An additional $800 million in cuts would come from money created by the Affordable Care Act in 2010 to test innovative payment and service delivery models.”