In 2010, Democratic California Congresswoman Nancy Pelosi famously said of the Affordable Care Act, “We have to pass the bill so that you can find out what’s in it away from the fog of the controversy.”
The statement was taken by Obamacare opponents as an indication of how Democrats crafted a complicated bill remaking the nation’s healthcare delivery system without a full understanding of its impact.
Now Republicans are passing, and President Trump will sign, the biggest tax reform plan since the Reagan tax cuts of 1981. Certainly more details are known about the tax bill than the ACA. There are numerous websites where you can enter your tax information and see how you will be affected.
However, that does not mean the tax bill is widely understood by Americans or, even if they understand it, they may not want it.
The New York Times did a survey of people that could expect a tax cut. It found that “even among people with more than 90 percent chance of getting a cut, about half said they did not expect to get one.”
That helps explain why the tax cuts are not popular. The statistical website FiveThirtyEight reports, “According to an average of nine surveys taken this month, 33 percent of Americans are in favor of it, and 52 percent are opposed.” Contrast that with the Reagan tax cuts when a Gallup Poll found 51 percent approved, while 26 percent were opposed.
These numbers and others put Republicans in a precarious position heading into 2018. The GOP is already bracing for losses often suffered by the party in power in midterm elections, especially when the President is of the same party and has low approval ratings.
West Virginia’s three Republican members of the House of Representatives—David McKinley (R-WV1), Alex Mooney (R-WV2) and Evan Jenkins (R-WV3)–along with Republican Senator Shelley Moore Capito all supported the tax bill.
Capito is not up for re-election until 2020. However, McKinley and Mooney have to defend their seats next year, and Jenkins is running for the Republican nomination to the U.S. Senate. They have to own the tax bill during the 2018 election cycle.
They are banking on that working out for them. Their best arguments are that more than 80 percent of West Virginia taxpayers use the standard deduction rather than itemizing and those folks all get a tax break. Additionally, small businesses, which dominate the state’s economy, will also see a lower tax liability.
But a lot of things could go wrong. There could be a massive correction in the stock market. The economy could hit one of its cyclical downturns. What if big corporations, which stand to benefit most from the tax bill, see profits surge, but wages do not follow? What if the deficit explodes?
The political fallout could be dramatic. Americans, who according to surveys never saw taxes as their top issue, will take out their frustrations on the party in power, giving Democrats in West Virginia and across the country a foothold to try to regain their majorities.
Republicans said they needed the tax bill; they and President Trump had to have a legislative victory to carry them through the midterms. We will know in a few months whether that was the correct calculus.
A Republican version of the Pelosi blunder might be, “Let’s pass the tax bill and see what happens.”