Tax Cuts for All States Will Save GOP House Majority, Poll Suggests

Image: Tax Cuts for All States Will Save GOP House Majority, Poll Suggests
Speaker of the House Paul Ryan, R-Wisc., stands in front of boxes of tax reform petitions during the press conference following the House Republican Conference meeting in the Capitol on Tuesday, Nov. 14, 2017. (Bill Clark/CQ Roll Call via AP Images)

By John and Jim McLaughlin
Wednesday, 15 Nov 2017 12:49 PMCurrent | Bio | Archive

Last month our poll showed that we needed a good pro-growth tax cut to keep our Republican majorities in Congress.

Our latest national poll of 1,000 likely voters just completed on November 14 shows that the majority still supports “President Trump’s plan to cut taxes” 56 percent to 35 percent. One month ago it was 57 percent to 28 percent. So while support is about the same and significantly higher than the president’s current job approval, 44 percent; higher than the generic vote for Republicans for Congress, 40 percent; and much higher than job approval for the Republican majority in Congress, 32 percent; the Democrats appear to be rallying some opposition with their class warfare arguments as disapproval rose 7 points. By party, Republicans approve of the Trump tax cut 89 percent to 6 percent. Independents approve 49 percent to 38 percent, and among Democrats 31 percent approve while 58 percent disapprove.

One key point of attack by the Democrats is the elimination or capping of the deduction for state and local income and property taxes. A provision which many middle class voters in high tax states need to use to reduce their overall tax burden.

Democratic leaders Chuck Schumer and Nancy Pelosi have made their main attack point against the GOP tax plan the elimination of the state and local tax deductions. The Democrats understand this is bad politics and bad policy for the Republicans and it is the tax plan’s Achilles Heel.

Last month when we asked voters do you approve or disapprove of “eliminating all federal income tax deductions for state and local taxes that taxpayers pay on property and income taxes,” they were split — 39 percent approved and 37 percent disapproved. Now the plurality of all voters, 45 percent, disapprove and only 36 percent approve. 54 percent of Democrats disapprove. 47 percent of independents disapprove and so do 33 percent of Republicans. Only 1 in 3 voters support the position of the Republican Senate plan and a growing number of voters disapprove of eliminating the state and local deduction. This is driving disapproval for the entire plan among previously undecided voters. Right now there are no Republican Senators from high tax blue states, and if they hold to their position to eliminate this deduction, there likely won’t be next year either.

However it is clearly a very valid concern for House Republicans. One member, Congressman Lee Zeldin, has floated a new compromise where the deduction remains as it is now for four years to give time for taxpayers to prepare or adjust while after that time it is capped at incomes of $400,000.

This makes political sense for Republicans. Likely voters are more likely to itemize their deductions. As an example in one district where we recently polled statistics said among all taxpayers only 30 percent itemized, but among likely voters 52 percent itemized their taxes. These likely voters are often the middle class homeowners who are the core of our Republican vote.

The current compromise position offered by House Republicans in their plan is growing in popularity. Last month when we specifically asked about “keeping the federal income tax deductions for state and local taxes for property and income taxes for households who earn less than $400,000 a year, but eliminating the deductions for those who have annual household incomes above $400,000,” 40 percent approved and 27 percent disapproved. But now the majority of all voters, 59 percent approve to only 26 percent disapprove. However, we have to wonder if the House position is being eclipsed by the Senate position and the double taxation attacks by Democrats in the media.

The policy side may have very logical arguments. Low tax states argue that they don’t want to subsidize high tax states. However high tax states correctly argue that they pay far more in taxes to Washington and don’t get a fair share back. Also proponents of elimination argue that to cut rates you need to eliminate deductions. So in a policy argument there may be reasons for change.

However, let’s put policy arguments aside. We’re coming into a critical midterm for control of Congress which means politics matters most. The congressional staffers that make these policies recommendations did not elect these members and often recommend ideas that can have a very high political cost. With a mere 24 seat Republican majority in a possibly difficult year, is it worth passing a tax reform plan that turns out to be a tax increase for the voters of about 10 percent or more of our Republican caucus? Why aren’t we uniting our caucus with a tax cut for the majority of voters in every Republican district and trying to attract bipartisan Democrats who will benefit from jobs created and attracted in their districts from the business tax cuts?

The majority of all voters last month supported “lowering the corporate tax rate for large and small businesses in the United States from 35 percent to 20 percent” by a margin of 51 percent to 34 percent. This month they support 50 percent to 37 percent. So business tax cuts that create jobs and better paying jobs are working. We need to use this as a wedge issue against Democratic opponents.

Most important when we asked all voters which they thought was the better way to pay for the tax cuts proposed by President Trump, the majority, 57 percent, said “grow the economy to provide more jobs, higher wages and more tax revenue.” Only 35 percent said “eliminating tax deductions and raising taxes on upper income taxpayers and businesses.” Those who are undecided for Congress favor the jobs growth argument 58 percent to 23 percent. Also 41 percent of those who currently oppose the Trump’s tax cut plan as well as 52 percent among those who disapprove of eliminating the state and local tax deduction agree with the growth argument as the best way to pay for the tax cuts. Although the overall number has narrowed from last month when the growth argument led 63 percent to 15 percent, Republicans need to go back to making their plan reflect a true tax cut for all that will create jobs and pay for itself through growth.

Proven tax cut plan authors like Larry Kudlow and Steve Forbes keep arguing that 3 percent growth would pay for the tax cut, but Republicans forecast growth at only 2.6 percent.

We have polled for 21 currently sitting House Republican members. 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.

The key to keeping our Republican majority remains passing a good tax cut, but a tax cut which cuts taxes for the majority of voters in all Republican districts. Then we can challenge Democrats who oppose the plan as job killers. Playing political offense and not being on the defense is the key to passing the tax cut and keeping Republican control of Congress. It’s time to give our members a plan that can attract unanimous Republican support and even attract some Democrats. Republicans are very close.

John McLaughlin has worked professionally as a strategic consultant and pollster for over 35 years. During this time he has earned a reputation for helping some of America’s most successful corporations and winning some of the toughest elections in the nation. His political clients have included former Presidential candidates Steve Forbes and Fred Thompson, former California Governor Arnold Schwarzenegger, former Florida Governor Jeb Bush, Georgia Governor Nathan Deal and 22 current and former U.S. Senators and 21 current Republican members of Congress. Last year John worked as an advisor and pollster for Donald Trump from the primaries through Election Day.

Jim McLaughlin is a nationally recognized public opinion expert, strategic consultant and political strategist who has helped to elect a U.S. President, Prime Ministers, a Senate Majority Leader, and a Speaker of the House. Jim has worked for over 70 members of Congress, 14 U.S. Senators, 10 governors, numerous mayors and scores of other elected officials. He also serves as a consultant and market research strategist to Fortune 500 companies. To read more of his reports — Click Here Now.

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