The conventional wisdom for a long time in American politics has been that tax cuts are a surefire way to beef up support of whoever passes them, while tax hikes are a one-way ticket to unpopularity. Donald Trump’s tax cuts are apparently throwing a big wrench in that idea.
The signature policy passed by the last Congress and signed into law by the president has been unpopular from the beginning; a Real Clear Politics average of polls in the first two months after it was signed found it had a 45 percent disapproval rating as opposed to 40 percent approval at the time. But even now, as the tax cuts kick in, it appears the public is viewing it for the scam it is.
A recent Pew poll found that a mere 36 percent of respondents approved of the Trump law, with 49 percent disapproving. Last week, an NBC/Wall Street Journal poll showed that just 17 percent of people believed they were getting a tax cut due to the law, as opposed to 28 percent who thought their taxes would go up and 27 percent who thought they’d pay about the same.
The New York Times credits this disconnect with liberal criticism of the law, but the more likely reasoning is that for most people, the cut was so negligible that it barely made a dent; the middle fifth of earners, according to the Times, got a cut of less than $780, which mostly showed up throughout the year in the form of lower withholdings in each paycheck. The top 1 percent of earners, on the other hand, got an average tax cut of over $30,000, according to the Tax Policy Center.
Politico reports that the White House’s response to this sits between something between mild panic and general indignation. While the White House is calling this week “Tax Cut Week” and the law is supposedly going to be Trump’s focus in his public appearances this week (good luck with that), other White House officials don’t seem to be bothered at all by the fact that Trump’s biggest legislative achievement thus far is widely disliked. Per Politico:
They say slashing rates on corporations paved the way for stronger growth in 2018 and higher wages and will continue to do so in 2019, though many economists dispute the assertion that this year will be anywhere near as good as last. And they say Trump’s overall approval rating on the economy — 58 percent according to a recent Georgetown Institute of Politics and Public Service “Battleground Poll” — will overcome general voter antipathy to the tax-cut bill.
“There is a general principle that when the economy is strong, the incumbent tends to win,” said Kevin Hassett, chair of the White House Council of Economic Advisers. “And the sentiment indicators that matter are all looking great. People see the health of the economy clearly and their sentiment about it is super high.”
It remains to be seen how “strong” the economy is going to remain into 2020, especially considering that half of the country still hasn’t recovered from the last financial collapse and recession that followed. But given that Trump’s law to cut taxes is widely unpopular and plans to tax the ultra-rich aren’t, it might be time to rethink that conventional wisdom.