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Trump is doing a lousy job selling tax cuts

Rick Newman
Columnist

Not everybody thinks taxes should be lower. But of all the things voters ought to favor, tax cuts are near the top of the list.

Yet President Trump and his fellow Republicans are failing to persuade the majority of Americans that the big package of tax cuts they’re poised to pass is good for the country. Their messaging is so lousy, in fact, that voters seem to think tax cuts will be more punishing than they’re likely to be.

The latest Quinnipiac poll, for instance, shows that 53% of Americans disapprove of the Republican tax plan, while just 29% approve. That’s a remarkably negative showing for something that ought to be marginally popular, at a minimum.

Here’s a more telling finding: Forty-one percent of respondents in the Quinnipiac poll think the GOP tax plan will raise their taxes, while just 20% think it will lower them. The rest anticipate no change or don’t know what will happen.

Source: Quinnipiac University poll released Dec. 5, 2017

Most of those people who think their taxes will go up are wrong. Third-party analysis by the Tax Policy Center shows that, under the House tax-cut plan, 76% of taxpayers would get a tax cut averaging $1,900 the first year the plan goes into effect. About 7% of taxpayers would face a tax increase, averaging $2,100. For the other 17% there’s likely to be no major change.

Under the Senate plan, 75% of taxpayers would get a tax cut in the first year, averaging $2,000, according to the Tax Policy Center. Seven percent of taxpayers would face tax hikes, averaging $3,100. The other 18% would see no major change.

So, under the best independent estimates, roughly three-quarters of taxpayers would enjoy an immediate tax cut, and only 7% would see a tax hike. Yet the public has a completely different impression, according to the Quinnipiac poll. The portion of people who think their taxes will rise is six times larger than those who will actually see a tax hike. And less than one-third of people likely to see a tax cut think it will actually happen.

If the GOP tax-cut plan were an ordinary product marketers had to convince consumers to buy, it would be a total bomb. Imagine Apple selling a phone consumers thought would be unable to place phone calls. Or Coke selling a beverage people expected to taste terrible. This is how bad the GOP’s sales pitch is for a tax-cut plan they’ve been developing for years.

The problem obviously isn’t a lack of advertising. Trump repeatedly insists the tax cuts will work miracles for the U.S. economy. Top Republican legislators, such as Paul Ryan in the House and Mitch McConnell in the Senate, claim their tax cuts will help millions of middle-class families.

One suspects—gasp!—that most Americans simply don’t believe Trump, Ryan, McConnell, et. al. It’s true that mainstream media coverage of the tax plans has focused largely on the negatives, such as the outsized amount of tax relief that will accrue to businesses rather than middle-class families and the $1.5 trillion the package will add to the national debt during the next decade. But that’s not fake news. That’s what the GOP tax cuts will actually do.

Who benefits from Trump’s tax cuts? Trump

Perhaps Republicans should consider the possibility that their tax plan is a turkey that Americans are interpreting more or less correctly. One GOP mistake, at least in terms of messaging, is a Senate plan that makes tax cuts for businesses permanent but tax cuts for individuals temporary. That looks like a bait-and-switch scheme to a lot of people. Legislators are still negotiating a final bill, which could rectify that and make the individual cuts permanent. But you only get one chance to make a first impression—and the business-first, people-last approach will likely hang over this bill no matter what changes occur.

Trump claims the tax cuts would raise his own tax bill, costing him a “fortune.” Ahem. Politifact has documented more than 40 lies Trump has told publicly since taking office last January, not including many other exaggerations. The storied Trump base may not care, but many others do, and in reality, it appears the real-estate industry where Trump built his fortune will be one of the biggest beneficiaries of the coming tax cuts. So the man who promised to drain the swamp appears, instead, to be lining his pockets through the one big legislative accomplishment he’ll probably be able to claim. Trump lacks credibility among people who aren’t part of his amen chorus and need persuading. They remain unpersuaded.

The Republicans are also playing with fire by threatening to eviscerate the deduction for state and local taxes, a popular tax break claimed by roughly one-third of taxpayers. Republicans seem gleeful to have found a tax break that benefits high-income taxpayers in Democratic states such as New York and California, assuming they can yank it away as if it will only harm the opposing party. But millions of taxpayers who don’t live in blue states claim state and local deductions as well, and they must surely wonder why Republicans are throwing them under the bus.

The Trump tax plan is likely to pass, which means voters will soon be able to judge the real effect it has on their family budgets, instead of guessing based on what they hear. But they’re starting out skeptical, and the burden is on Republicans to make them believers. Hint: Don’t mention that windfall for real-estate developers.

Confidential tip line: rickjnewman@yahoo.com. Encrypted communication available.

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Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman