History suggests the GOP tax reform celebration will be short-lived

by Patrick Murray

Bookmark that photo of Republican lawmakers gathering at the White House today to celebrate their first major legislative victory of the Trump era. If history is any guide, many of them may be on their way out this time next year.

As others have documented, including Harry Enten at 538, the just-passed tax reform bill starts out life as the least popular tax legislation going back to at least 1981. Tax HIKES in 1990 and 1993 got better reviews. For the record, the Monmouth University Poll puts public opinion of the current package at 26% approve and 47% disapprove.

Polling shows that the public feels the package was mainly designed to benefit the wealthy rather than the middle class. Republicans, and Pres. Trump in particular, currently suffer a credibility deficit with the middle class. Based on Trump’s rhetoric that he would put average Americans first, fully 66% of the public believed when he took office that the middle class would benefit from a Trump administration. That opinion has flipped. Currently, a majority of 53% say that middle class families have seen no benefit at all from the president’s policies to date.

Importantly, fully half of the American public believes that their own federal taxes will increase because of this new tax reform package. Only 14% expect that their taxes will go down. In reality, many more than 1-in-7 taxpayers will see at least a nominal decrease. This reality is what GOP lawmakers are banking on when they face the voters next year.

But politics – and voters’ decision-making process – isn’t always based on reality. It is, however, always based on perception. And based on historical perception metrics, the short-term future doesn’t look quite so bright for the bill’s proponents.

Even though voters won’t feel the full impact of this tax cut until they file their returns in early 2019, they should get a small increase in their net take-home pay when the IRS adjusts the withholding tables in the next few months. Will this be enough to turn around public opinion? History says no.

For example, the 2009 stimulus package included tax cuts for nearly all taxpayers that was reflected in an increase in net take-home pay. Most Americans didn’t notice. A University of Maryland/Knowledge Networks survey conducted in November 2010 found that a majority of the public (52%) did not think the stimulus bill included any tax cuts at all. In fact, 39% said their own federal income taxes had gone up and 48% said they hadn’t changed. Just 9% said their taxes had gone down – a perception that was far from the “reality” of nearly 95% of Americans whose taxes were decreased.

The Tax Policy Center estimates that the mid-point increase in net income for the current package will be about 1.6%. My rough back of envelope calculations suggest that this might amount to anywhere from $25 to $50 extra in the biweekly paycheck of someone earning $60,000. I’m not convinced this amount will be perceived as significant by many voters.

Of course, the IRS could always release new payroll tables that significantly under-withhold federal taxes. This would mean taxpayers end up owing money to DC when they file their 2018 returns – but that would happen months after the midterm elections. Barring that type of manipulation, though, the net increase is unlikely to be seen as significant if at all.

In the end, we have a tax package that starts out in a very deep negative public opinion hole. Couple this with the prospect that the net take-home pay impact is likely to be perceived as immaterial. It does not look very likely that public opinion on this legislation will turn around in the next 10 months or so.

P.S. The 12 House Republicans who voted against the tax bill should not get too confident that they’ve inoculated themselves from any fallout in the upcoming midterms. In 2010, the ACA was the hot button issue and nearly three dozen Democrats decided to buck their party and vote against it. Of the 30 who ran for reelection that year, 17 lost. By 2013, only 6 of the original 34 Democratic nay votes remained in the House.

Monmouth University Poll Accurately Depicts Alabama Senate Race

            West Long Branch, NJ – The MonmouthUniversity Poll accurately described the potential outcome in the Alabama Senate race, both in terms of the margin of victory and in the level of turnout.  Monmouth’s midpoint model showed a razor thin race that Democrat Doug Jones eventually won by 1.5 percentage points.

This unique special election involved a high degree of uncertainty and Monmouth used this opportunity to provide a realistic range of outcomes. Different turnout models were based both on individual voting history as recorded in the voter rolls and self-reported interest and enthusiasm in this election. Monmouth’s high turnout model (about 55-60% of registered voters) with a light screen based on presidential-electorate demographics showed Jones leading Republican Roy Moore by 3 points. A lower turnout model (about 30-35%) based on typical midterm demographics, including only voters who participated in at least two recent elections or expressed a very high level of interest, had Moore up by 4 points.

Monmouth also created an adjusted midterm model based on patterns seen in recent special elections as well as last month’s Virginia gubernatorial contest. This model projected a slight increase in typical midterm turnout (about 35-40%) driven by Democratic voters in Democratic areas of the state.

This model assumed that, regardless of overall turnout, Democratic strongholds would command a larger than normal share of the electorate. For example, in last month’s Virginia election, the region Monmouth defined as Northern Virginia accounted for 31% of the total vote whereas this area would normally contribute about 28-29% of the final tally, with nearly all that increase coming from Democratic voters. The model based on this turnout pattern produced a tied outcome for the Alabama race.

In the actual results, overall turnout came in at about 45% of registered voters, with relatively higher turnout among Democratic voters in Democratic parts of the state. For instance, Jefferson County – home to Birmingham, the state’s largest city – comprised 16% of the final electorate whereas it usually contributes 14% of the total vote.  This result put the actual turnout somewhere between Monmouth’s adjusted midterm model and high turnout model. The final margin of victory – Jones by 1.5 points – was also midway between the estimates provided by these two models.

“The 2016 presidential contest as well as the Virginia gubernatorial race last month showed that slight deviations from typical turnout can have a huge impact on election outcomes,” said Patrick Murray, director of the independent Monmouth University Polling Institute. “I don’t think pollsters should present every possible model under the sun, but the current era of electoral instability suggests it may be a good idea to show a realistic range of outcomes in states where pollsters have little track record or where the nature of the campaign itself invites uncertainty.”

            Monmouth’s only other polls in Alabama were conducted during the 2016 presidential primaries. Monmouth’s Republican poll showed Donald Trump with a 23 point lead over his nearest opponent – a race he won by 22 points. That poll was within one percentage point of the actual vote share for 4 of the 5 candidates on that ballot, underestimating only Ted Cruz’s total by 5 points. Monmouth also showed Hillary Clinton ahead by 48 points in a Democratic primary race that other polls suggested would be much tighter. She won that contest by 59 points.

The Monmouth University Polling Institute was established in 2005 to be a leading center for the study of public opinion on critical national and state issues. The Polling Institute's mission is to foster greater public accountability by ensuring that the public’s voice is heard in the policy discourse. The Monmouth University Poll, which is conducted nationally and in 27 states, received an A+ rating from the polling website FiveThirtyEight.com.

For more information: www.monmouth.edu/polling