Yahoo Finance Big business: Remember the Trump tax cuts when you vote
If you’re not sure what you think of the Trump tax cuts, it’s time to make up your mind.
That, at least, is what interest groups on both the left and right are hoping you’ll do, with both sides already airing ads meant to sway voters in the November midterm elections.
The US Chamber of Commerce, a big pro-business lobbying group, has begun airing ads in a handful of Congressional districts where Republican House seats could be in jeopardy. The ads remind taxpayers that Republicans cut their taxes last year. But references to the tax cuts are generally subtle—a tacit acknowledgement that the Trump tax law is generally unpopular and could cost Republicans votes in November.
A US Chamber ad supporting Republican Rep. Barbara Comstock of Virginia, for instance, first touts her support for transportation projects and the military, while pointing out that she’s “not with the partisan bomb-throwers.” The mention of her support for the Trump tax cuts comes 22 seconds into the 30-second ad. And there’s no mention of Trump himself.
A US Chamber ad for Republican Rep. Erik Paulsen of Minnesota mentions his opposition to a medical-device tax associated with the Affordable Care Act before touting his support of the Trump tax cuts. Again, there’s no mention of Trump. Both Comstock and Paulsen are defending seats in districts rated “toss-ups” by the University of Virginia’s Larry Sabato. So there are probably many Independents and some Republicans whose votes are up for grabs.
A US Chamber ad supporting Republican Rep. Martha Roby of Alabama—whose district Sabato rates as “safe Republican”—is more direct about the tax cuts. “Martha voted for President Trump’s tax cuts,” a narrators says early in the ad. “And that’ll bring new jobs to Alabama.” The betting seems to be that it’s safer to align the candidate with the Trump tax cuts in a deeply conservative district.
In an April NBC/Wall Street Journal poll, just 27% of respondents said the tax cuts are a good idea, while 36% disapproved. The rest weren’t sure. An April survey of Yahoo Finance readers found three main reasons for the law’s unpopularity: people think the tax cuts favor the wealthy over everybody else, they’re suspicious that the business tax cuts are permanent but the individual tax cuts are temporary, and they think the sharp increase in government debt needed to finance the cuts is irresponsible.
Ads praising and condemning the tax cuts are sure to bombard voters as the midterms approach. Republicans will claim the tax cuts are boosting economic growth, helping create jobs and putting more money in people’s pockets. Democrats will characterize the tax cuts as a giveaway to the rich and a sellout of future taxpayers.
Most economists expect the tax cuts to modestly boost growth this year and next. But they also worry that the added US debt could crowd out private investment and push interest rates a bit higher than they’d otherwise go. There’s also concern about the government’s ability to respond with fiscal stimulus during the next recession, given $1.8 trillion in new debt.
The Tax Policy Center has found that about 65% of households will get a tax cut under the law, with middle-income families saving about $1,050 per year. Savings for the top 5% of earners will average $12,130, while the top 1% will save more than $51,000. Those kinds of numbers make it easy to know how you feel about the tax cuts.
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Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman
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