HOLLIS, N.H. — For decades, the battle lines in New England's most politically conservative state were clear. Republicans ran on tax cuts. Democrats ran on targeted tax credits. Both parties kept New Hampshire free of a state income or sales tax, blurring some distinctions for suburban voters.
Then came the Republican tax plan in Congress.
“Do you think it’s right to raise taxes on millions of hard-working Americans?” asked Sen. Maggie Hassan (D-N.H.) at a Friday night Democratic fundraiser. “Do you want to risk a $25 billion yearly cut to Medicare to give the wealthiest few a tax cut?”
The crowd of about 600 Democrats bellowed “no,” still shocked by the party’s recent political gains. Coming off Election Day wins from Seattle to Long Island, Democrats are starting to see the shape of a new majority, built on a potential suburban backlash to changes in the tax code.
“It’s incredible,” said Rep. Ted Lieu (D-Calif.), a vice chair of the Democratic Congressional Campaign Committee who has helped the party recruit candidates in suburban districts on the West Coast. “I don’t understand why they think raising taxes on the middle class to benefit the rich would be better for them electorally than doing nothing at all.”
Republicans have accused the minority party in Congress of demagoguery and bad math. In New Hampshire, Gov. Chris Sununu (R) has praised the House tax plan for doubling the standard deduction and retaining a property-tax exemption, albeit with a $10,000 cap. Democrats have falsely claimed that the bill would raise taxes on “most working-class families” — only 6.5 percent of lower-income households would take a direct hit, though many taxpayers making less than $100,000 would get little.
Yet Democratic wins, and polling about the tax bill, has led the party to think that it can cleave millions of voters from the GOP.
In a column for the conservative news website Newsmax this past week, pollsters John and Jim McLaughlin wrote that voters generally approved of "President Trump's plan to cut taxes," but opposed the elimination of deductions for state and local taxes — an idea that was "driving disapproval" for whatever Republicans proposed.
“We have polled for 21 currently sitting House Republican members,” the McLaughlins wrote. “Many of these members are in hard-fought battleground districts which would see a tax increase if the state and local deduction was eliminated. We helped them get elected and want to make their re-election easier, not harder.”
Thursday’s tax vote in the House revealed who some of those members were, many from California, New Jersey and New York. In statements, they echoed Democrats in predicting that the bill would hurt the middle class.
“When my constituents who are very good with their numbers tell me that they are going to be [paying] $5,000 to $10,000 more in taxes, I’m supposed to represent their interests,” said Rep. Dana Rohrabacher (R-Calif.), who represents a prosperous stretch of the Southern California coastline.
Thirteen Republicans opposed the House bill — enough for easy passage, but a sea change in tax-cut politics. The 2001 Bush tax cuts, the closet comparison with the current bill, won unanimous support from House Republicans and 13 votes from Democrats. No Democrat voted for the Republicans’ tax bill last week.
Rep. Debbie Dingell (D-Mich.), who had warned in 2016 that Hillary Clinton would lose Michigan in the presidential election, said the tax bill would reverse Republicans’ gains. She compared the vote to Democrats’ 1993 passage of a tax hike package, which Republicans unanimously opposed while chanting “bye-bye” to Marjorie Margolies, a suburban Philadelphia Democrat who cast the bill’s deciding vote.
“The Republicans are going to pay a real price,” Dingell said. “Margie voted for that knowing she was going to lose. I don’t think they know they’re going to lose. I don’t think they realize this is going to cost them those seats in the suburbs.”
Democrats like Dingell paid close attention on Nov. 7. In even high-tax areas, such as New York’s Westchester County, Republican promises of tax relief fell flat. In New Jersey, where Gov.-elect Phil Murphy (D) won easily, his Republican opponent came out loudly against the GOP’s tax bill.
In Virginia, where the party’s bigger-than-expected wave swept out suburban Republican legislators, GOP gubernatorial nominee Ed Gillespie pitched a 10 percent “across-the-board” cut in state tax rates, with $1,285 in relief for the average family of four — $103 more than the cut promised by Republicans in Congress. But according to Geoff Garin, the pollster for Democratic Gov.-elect Ralph Northam’s campaign, the tax plan was “a flop in the suburbs,” which is why Gillespie pivoted — also ineffectively — to attacks on cultural issues.
“First, there simply were not that many suburban voters who felt aggrieved by the amount they are paying in state income taxes,” Garin said. “Second, suburban voters quickly saw Gillespie’s proposed cuts as a dangerous gimmick, and the first question they had about his plan was what programs would have to be cut to pay for it.”
In New Hampshire, Democrats saw the same Republican swoon. In 2017 special elections, Democrats won four state legislative races in Republican-held districts. Just as telling was where they did it — Republican-leaning suburbs of Manchester, and in the vacation area around Lake Winnipesaukee.
Those wins continued on Nov. 7, when Democrats took over Manchester’s city hall for the first time since George W. Bush’s presidency and made gains in large towns closer to high-tax Massachusetts. “In Nashua, sweet Nashua, we pulled off a clean sweep,” New Hampshire Democratic Party Chairman Ray Buckley said at the party’s dinner.
In an interview, Buckley said that many of the gains had come from ramped-up Democratic enthusiasm. The Manchester race had attracted 236 full-time volunteers, more than three times as many as Mayor-elect Joyce Craig’s first bid in 2015.
“There’ve been years where we’ve had to get volunteers from Massachusetts,” he said, laughing.
The tax cut, Buckley argued, would help Democrats more than the party that actually wanted to pass it. A University of New Hampshire poll released Nov. 14 found the tax plan already underwater, with just 39 percent of voters in favor of it. A majority of New Hampshire voters supported the proposal's expanded child tax credit, but just 35 percent favored its reduction in corporate taxes, which Republicans have described for months as a job creator. But the talk of changes to state tax deductions overwhelmed all.
“A lot of people here work in Massachusetts and pay some of those taxes,” said Chris Pappas, a member of the state’s Executive Council who’s now running for the Manchester-based 1st Congressional District. “They’re going to get whacked if they cut the state and local tax deduction.”
Democratic confidence about fighting the tax cuts has also been bolstered by experience in recent years. In 2009, the party passed a stimulus package with little Republican support, and it waited for voters to appreciate its payroll tax and alternative minimum tax cuts. In a sluggish 2010 economy, Democrats were blown away, with voters largely unaware of minor changes to their taxes.
The unpopularity of 2017’s tax cuts has sent Democrats back to a playbook that Republicans used effectively in 2010 — warnings that Washington was going to pile up debt to redistribute money away from the people who needed it. At the New Hampshire dinner, Rep. Tim Ryan (D-Ohio), who just months earlier had warned his party not to rule out a tax plan, described a Republican Party that would put suburban and working-class taxpayers in hock.
“They’re going to go to the Chinese banks, the Chinese government, borrow $2.5 trillion, and give it away to the wealthiest people in our country,” Ryan said.
Hassan hit on similar populist themes. The plan, she said, would not only cut health-care spending — the Senate’s version includes a repeal of the Affordable Care Act’s insurance mandate — but also penalize small businesses.
“Under this proposal there will be a real incentive to keep manufacturing overseas,” Hassan said. She was quoting a colleague, she explained: Sen. Ron Johnson (R-Wis.), one of the Republicans who was making the bill easy to oppose.