A Taxing Time for the GOP
Connecticut Incumbent Struggles to Make Economy a Winning Issue

By Lori Montgomery
Washington Post Staff Writer
Thursday, November 2, 2006

NEW BRITAIN, Conn. -- In the waning days before Tuesday's election, Republican leaders are holding the issue of taxes out like a life raft to struggling congressional candidates. Few have grabbed it with greater enthusiasm than Rep. Nancy L. Johnson.

A 24-year incumbent from Connecticut who sits on the tax-writing House Ways and Means Committee, Johnson has run at least three television ads on fees and taxes, accusing her Democratic challenger, Chris Murphy, of raising "our taxes 27 times." She presses the point in speeches, telling voters that while Murphy was hiking taxes as a state lawmaker in Hartford, she was helping President Bush cut taxes on Capitol Hill.

But it's not clear the tax boat is going to float in this western Connecticut district, where Johnson, like Republicans nationally, is having trouble turning the economy into a winning issue. Murphy, 33, a lawyer and state senator, has opened a narrow margin in the polls by painting Johnson as a pawn of big business and attacking administration policies -- including the tax cuts -- as giveaways to millionaires.

Across the nation, taxes have become a battleground in competitive House races, as Republican candidates charge their Democratic opponents with voting for more taxes, voting against tax cuts or harboring plans to raise taxes. Political analysts say the tactic is designed to turn attention toward tax relief, which Republicans credit with spurring an economic recovery, and away from the Democrats' favorite topic, the unpopular war in Iraq..

President Bush talks about taxes nearly as much as terrorism these days, a message intended to rally the Republican faithful and assuage conservatives upset about the expanding cost of government. On Saturday, he devoted his weekly radio address to the topic. And at a fundraiser Tuesday in Georgia, Bush called taxes "a fundamental issue in this campaign," declaring that "if the Democrats take the House, your taxes are going up."

Ed Patru, a spokesman for the National Republican Congressional Committee, said Republicans are "pounding Democrats all across the country" on taxes because it is "always a winning issue."

"To the extent that there's a sour mood among the electorate because of issues like the war, that sour mood has dampened" the political value of a record Dow Jones industrial average, falling gas prices and low unemployment, Patru said. Focusing on taxes turns the tables and puts Democrats on the defensive, he said, adding, "People do appreciate the good economy, so they're upset when they hear Democrat proposals that threaten economic growth."

Democrats argue that economic growth is not benefiting many ordinary Americans, whose wages are barely keeping pace with the costs of fuel and health care. The Bush tax cuts haven't offered much relief, they contend. The richest 1 percent of Americans are assuming a slightly greater share of the overall tax burden thanks to cuts enacted from 2001 to 2005, but Democrats like to point out that the wealthy are doing far better in absolute dollars under Bush's tax policies than the working class.

A new analysis by the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, shows that more than 60 percent of savings from the Bush tax cuts are going to families that earn more than $100,000 a year. Put another way, a working-class family earning between $30,000 and $40,000 will save an average of $747 this year thanks to the cuts, while a family earning between $200,000 and $500,000 will save an average of $7,609.

"Financial pressure on the middle class is a big issue," said Stanley Greenberg, a Democratic pollster who has encouraged Democratic candidates to run on the economy. "What you talk about is middle-class squeeze and the fact that Republicans have done nothing for the middle class."

Republicans note that middle-class families are getting more relief in percentage terms. According to the Tax Policy Center, that $747 represents a 12.8 percent tax cut for the working-class family, while $7,609 represents a 9.4 percent cut for the wealthier family. Still, some Republican strategists acknowledge that Democrats are gaining traction on the issue.

"We've been screaming for months that we need to talk about the economy and we need to make it meaningful to the guy who drives the F-150 pickup in Indiana," said Greg Casey, president and chief executive of the Business Industry Political Action Committee, which supports mainly Republican candidates. "Despite the good story Republicans have to tell about the economy, if you look at people's perceptions right now, the Democrats have the upper hand."

In Connecticut, a relatively affluent state where unemployment is running about even with the national average of 4.6 percent, three veteran Republican lawmakers are fighting for their seats. Polls show Rep. Christopher Shays and Rep. Rob Simmons tied with Democratic challengers. This week, a poll by the Hartford Courant and the University of Connecticut found Murphy with 46 percent support and Johnson with 42 percent among likely voters.

As Murphy knocked on doors last week in Cheshire, a prosperous town about 25 miles south of Hartford, no one asked about the 27 tax hikes, a figure Murphy contends is exaggerated. But voters did express frustration with Republicans in Washington, saying the positive economic indicators have meant little in their lives.

"Good economy for whom? It's a good economy for people who already have a lot of money," said Kathleen Viereg, a family physician who was tending her lawn. Viereg said she has patients who postpone treatment because they can't afford rising deductibles and co-payments -- and those are the ones with insurance.

A political independent and undecided voter, Viereg said talk of tax relief leaves her cold when so many people are struggling financially. "The voodoo economics of these tax cuts doesn't add up," she said.

A block away, Joe Norcross, an assistant school principal, said Murphy has his vote because Republicans "want to take care of the wealthy." As for the tax cuts, Norcross remembered getting a check for $300 a few years ago, but "we sent it right into the credit card company."

Murphy attacks Johnson on a range of economic issues, from Social Security to a new drug benefit for Medicare recipients. If elected, Murphy says he will "absolutely" work to repeal cuts in the dividend and capital gains tax rates, calling them "tax breaks for the richest 1 or 2 percent of Americans."

Johnson seems to sense a shift in public sentiment. At a Rotary Club luncheon last week, she spent most of a 15-minute speech explaining how the tax cuts have created jobs and helped poor people.

"You can increase revenue by increasing taxes, and that gives you more money, at least for a while," she said. "Or you can increase revenue by growing the economy. That gives you more taxpayers."

Johnson said dozens of small businesses in her district hired extra workers thanks to a tax credit for equipment purchases. And she challenged the claim that the cuts benefit only the rich, noting that the rate for the lowest tax bracket was cut from 15 percent to 10 percent.

Many Rotarians said they planned to support Johnson. Several praised her long record of constituent service, saying she had increased government payments to their nursing homes and won money to redevelop New Britain's Polish business district. Rotary president Ken Slater, a Democrat, said he was voting for Johnson because "her heart's in the right place and she works very, very hard."

No one mentioned taxes.

Later, Johnson said there was "some truth" to the notion that she wins support from voters who like her personally, while Murphy wins among voters motivated by broad themes such as the economy.

"People know me, trust me and they're behind me," she said. "I feel very upbeat."