As Republicans release their tax bill Thursday, there's a lot going against it.
The driving principle behind it — cutting taxes for corporations to grow the economy — is unpopular right now. While people like their own taxes cut, there doesn't seem to be an overriding energy for this bill. A new Wall Street Journal-NBC News poll finds that just 25 percent of Americans think a blueprint of the plan Republicans released in September is a “good idea.”
— Amber Phillips (@byamberphillips) November 2, 2017
Their party is as fractious as it's ever been, and just as with their attempt to repeal the Affordable Care Act, Republicans have very little room for error within their own ranks.
External forces are lining up to make it even more challenging to pass: A powerful home builder industry group just pulled its support for the bill over not getting a new homeownership tax credit, promising to defeat the bill. And Republicans have an unpopular, often distracted and frequently distracting leader they can't count on to pull them over the line.
Similar dynamics felled partial Obamacare overhaul bills earlier this year. But there's one big thing Republicans have going for them this time that they didn't during a health-care debate: They need a win even more urgently.
In a way, the Republicans' failure to repeal Obamacare is what's driving them to pass a tax bill. Republicans are entering their 10th month in control of all of Washington without a major legislative victory. Republican operatives warn that many GOP lawmakers' jobs are on the line in next year's midterm elections if they can't do something before the end of the year. And a tax bill that benefits the middle class is one of the best somethings you can sell.
“Politically this is, always has been, and always will be the most important issue,” said Corry Bliss, head of a House GOP super PAC, told The Fix this fall. “There's nothing more important than having a good-paying job and being able to provide for your family.”
The next question is whether this tax bill actually does cut net taxes for the middle class. It's clear the bill would create huge tax cuts for the wealthy and corporations: lowering the corporate tax rate from 35 percent to 20 percent and eliminating the estate tax.
It's impact on middle-class families is less clear, write The Post's Damian Paletta and Mike DeBonis. The rest of the bill is a mishmash of tax credits for families. It would leave 401(k) plans alone, but it proposes ending popular tax deductions for state income taxes or medical expenses. Most notably, it would lower the cap on the mortgage interest deduction to $500,000 loans, as home prices have spiked over the past year.
And what's unpopular with broad swaths of the public is unpopular with lawmakers who represent them. The end of the deduction for state income tax could repel lawmakers from such high-tax states as New Jersey and New York. Many of them didn't vote for a budget blueprint this October that paved the way for tax reform. Already, some lawmakers are expressing their opposition to how the tax bill affects their own slice of the country.
— Rachael Bade (@rachaelmbade) November 2, 2017
— Marco Rubio (@marcorubio) November 2, 2017
On the other end of the spectrum, some top conservative House lawmakers are on edge about any new restrictions the bill puts on corporations.
“I’m on ‘alert level four’ right now,” Rep. Mark Meadows (R-N.C.), chairman of the Freedom Caucus, told The Post's DeBonis.
We're focusing on Republicans so much right now because leaders are trying to get this bill passed without relying on Democratic votes. In the House, that means they can only afford to lose about two dozen Republicans. In the Senate, they can only afford to lose two votes. (Though if red-state Senate Democrats support the bill, their margin of error could be wider.)
A day before the bill's release, President Trump flung in a curveball, when he said he wanted Republicans to try to repeal parts of Obamacare with this tax bill, too. This tweet came shortly after Sen. Rand Paul (R-Ky.) suggested the same thing on Fox News.
Wouldn't it be great to Repeal the very unfair and unpopular Individual Mandate in ObamaCare and use those savings for further Tax Cuts.....
— Donald J. Trump (@realDonaldTrump) November 1, 2017
Passing a comprehensive tax bill for the first time in three decades is difficult in the best of times. At this time, when Republicans need unity, they have division. Where they need support from outside the Capitol, they don't necessarily have it.
The open-ended question is whether Republicans' universal desire for a legislative victory is enough to rise above all those head winds.