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Tax Day Fight Previews Larger Political Battle Over New Law

Midterm messaging is likely to contain a heaping dose of tax rhetoric

Speaker Paul D. Ryan, R-Wis., holds a sample of a postcard-style tax filing during a news conference in the House studio after a meeting of the GOP Conference on Tuesday. (Tom Williams/CQ Roll Call)
Speaker Paul D. Ryan, R-Wis., holds a sample of a postcard-style tax filing during a news conference in the House studio after a meeting of the GOP Conference on Tuesday. (Tom Williams/CQ Roll Call)

As citizens across the country rush to submit their 2017 tax returns before the deadline, Republicans and Democrats in Congress on Tuesday amped up the messaging battle over last year’s tax law.

The dueling talking points presented by each party are a preview of the months to come as the midterm elections approach.

The GOP is trusting that the tax law — the party’s signature legislative accomplishment in 2017 — will bolster their chances to maintain control of the House and Senate next year.

Democrats, who were unified in both chambers in opposition to the measure, say it is yet another example of how Republicans are out of touch with middle-class Americans, many of whom helped elect President Donald Trump to office.

While much of the potential benefit of the law will likely be realized when Americans file their taxes next year for 2018, Republicans are hoping some of the more immediate changes will prove politically advantageous. But so far, support for the measure has been tepid, and GOP leadership is urging members to spend more time touting the law’s success in the run-up to November.

Watch: On Tax Day, Democrats Rally Against GOP Tax Law

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A recent Wall St. Journal/NBC News poll found that only 27 percent of respondents believed the law is a good idea, a decrease from 30 percent in January. Fifty-six percent of Republicans support it, the poll found.

“When people realize as they begin to file next year’s taxes that you’ve doubled the standard deduction, doubled the child tax credit, you’re paying lower rates, those are significant features about this … tax reform,” Senate Republican Conference Chairman John Thune of South Dakota said. “That may not be entirely reflected in polls today, but I think it will be, and it’s really a function of us getting the message out there.”

Democratic leaders say the benefits predominantly fall to the rich and have pledged to walk back parts of the law — which permanently decreased the corporate tax rate and temporarily lowered individual tax rates.

“What this bill is about is giving 83 percent of the tax breaks to the top 1 percent at the end of 10 years, and then coming back to the American people and saying, ‘The deficit is so high that we’ve got to cut Social Security, Medicare, Medicaid and education,’” Sen. Bernie Sanders, an independent from Vermont who caucuses with Democrats, said at a rally on the east lawn of the Capitol. “Our job is not only to repeal the tax breaks that went to the large corporations … our job is to transform our national priorities.”

Republicans believe Democrats will eventually have to support legislation to make the individual tax cuts permanent and have considered holding a vote on such a measure this year. When asked about timing of a vote, Thune said it was up to Senate Majority Leader Mitch McConnell.

“That’s something that we all support, obviously,” he told reporters.

Across the Capitol, Speaker Paul D. Ryan said on Tuesday his chamber would vote on such a measure this year

House Minority Whip Steny H. Hoyer said most Democrats would oppose making the individual tax rates permanent but said his party would take a wait-and-see approach. 

“Let’s see what they do,” he said. “But if they’re going to create more debt and they’re not going to pay for it, I think we can show the American people that’s a shell game.”

The GOP is likely to keep the pressure on their Democratic counterparts to extend the tax law’s benefits. 

“I would question why our friends on the other side find it so difficult to step up and say to families, to say to individuals that we support that too,” Republican Sen. Deb Fischer of Nebraska added. “Most of us realize that down the road, it’s going to happen, so to continue to be out there and bat this back-and-forth … and create more divisions in this country … is really theater.”

Since its passage, the results of the law have been something of a mixed bag for Republicans.

The federal withholding tables were changed in February, increasing the amount of take-home pay for many Americans. The GOP hoped this would bolster support for the law, but a recent CNBC All-America Economic Survey found that 52 percent of working adults say they have not seen a change in their paycheck.

“Ninety percent of Americans have received a notice saying [their] withholdings are going to be less or they’ve seen it on their paychecks. So they may not have noticed it, that doesn’t mean it hasn’t happened,” Sen. Rob Portman of Ohio said.

The nonpartisan Congressional Budget Office, which Republicans last year consistently criticized during their attempts to overhaul the 2010 health care law, estimated that gross domestic product would expand by 3.3 percent this year, largely as a result of the tax law.

Along with economic growth, however, the CBO estimates that the federal deficit will hit $804 billion this year and could top $1 trillion by 2020, an increase Republicans attribute to out-of-control federal spending on mandatory programs like Medicare and Medicaid.

“The deficit and the fiscal outlook for the country … is affected on the spending side of the equation, and it really comes down to mandatory programs. It’s entitlement programs that are growing at, in many cases, multiple [times] the rate of inflation and are on a trajectory that’s just not sustainable,” Thune said.

Republicans face mounting pressure from conservatives for the significant increase in federal spending under a GOP-controlled Congress and White House. A recent budget deal, for example, would hike spending by nearly $300 billion over two years.

Watch: GOP Leaders Consider Clawing Back Spending

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The White House and House Republicans are working on a measure to restrict some of the money included in the fiscal 2018 spending bill, though such an action is opposed by GOP lawmakers and Democrats in both the House and Senate.

The House also recently failed to pass a balanced-budget amendment, which both Republicans and Democrats labeled as a so-called messaging vote.

Lindsey McPherson contributed to this report.

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