Battle over tax cuts moves from Congress to the campaign trail 

  • President Donald Trump shows off the tax bill after signing it in the Oval Office of the White House, Friday, Dec. 22, 2017, in Washington. (AP Photo/Evan Vucci) Evan Vucci

  • Gov. Chris Sununu delivers remarks during the Veterans Day ceremony at the New Hampshire State Veterans Cemetery in Boscawen on Saturday, Nov. 11, 2017. (ELIZABETH FRANTZ / Monitor staff) Elizabeth Frantz

For the Monitor
Saturday, December 23, 2017

Republican Gov. Chris Sununu says that the congressional GOP tax bill signed into law by President Donald Trump on Friday “really helps everybody.”

But his predecessor in the governor’s office disagrees.

In an interview with the Monitor, Democratic Sen. Maggie Hassan highlighted how “damaging it (the law) will be to middle class families and small businesses.”

The opposite opinions from two of New Hampshire’s top politicians illustrates the fierce split over the measure between Republicans and Democrats, a divide that will play out during next year’s midterm elections.

“We will be making the case that the Republican Party is looking out for big corporations, special interests,” Hassan said.

New Hampshire races in 2018 stand to be fertile ground for competing Republican claims of delivering long promised tax relief versus Democratic accusations that the tax bill is a payoff to the rich, political experts say.

The landmark $1.5 trillion tax measure is the first major legislative achievement for Trump since he entered the White House nearly a year ago. And it’s the first major overhaul of the nation’s tax code since Ronald Reagan’s presidency three decades ago.

The legislation, crafted by House and Senate Republicans, achieves a longtime GOP goal, by permanently reducing the corporate tax rate from 35 percent to 21 percent. Republicans have long argued that such a move would make American businesses more competitive globally and would incentivize a return home for companies that fled overseas.

The new law lowers individual tax rates, including the top bracket, which drops from 39.6 percent to 37 percent. The standard deduction is doubled and the law allows for a $2,000 partly refundable child tax credit. But the measure scraps many personal exemptions and deductions and scales back the state and local tax deduction.

While the corporate tax cuts are permanent, the individual tax reductions expire in a decade, unless altered by Congress.

Democrats call the plan a giveaway to the rich and corporations, and say the cuts will explode the nation’s deficit. And they heavily criticize the provision in the law that abolishes the penalty for Americans who don’t purchase health care insurance through the Affordable Care Act, better known as Obamacare. They argue it will cause millions to go without health insurance and cause a jump in premiums for those who obtain their insurance in the individual marketplace.

Republicans counter, saying the new law is a boon to the middle class. They cite studies that indicate 80 percent of taxpayers will enjoy a tax cut under the new law.

“Take a single mother of two making $30,000 a year. Under this tax bill she puts another $1,600 in her pocket,” Sununu offered.

“This is the first major tax reform in 30 years in this country. Long overdue,” the governor added. “It’s a huge win not just for New Hampshire’s economy but for all of America.”

But Hassan lamented that Democrats were not included in the creation of the measure and that it was a “rushed bill that was written in secret without input from the public or from experts.”

Trump’s signing of the legislation into law Friday brought an end to the pitched battle over the bill. But the larger political war over the tax cuts will now play out on the campaign trail, as the 2018 elections heat up.

Most national polling over the past month indicated that the measure was unpopular. Democrats see similarities to their passage of Obamacare at the beginning of the decade. That measure was also very unpopular at the time, and in the 2010 elections the party suffered a massive defeat, losing their majorities in the House and Senate.

Next year Democrats will be defending both of New Hampshire’s U.S. House seats, while the GOP defends the governor’s office and their state House and Senate majorities. Both parties will hope to use the tax cuts to their advantage.

“The election year tax cut debate will be fought where it always is, over which party has the true economic interests of the middle class at heart,” explained political scientist Dean Spiliotes, a civic scholar at Southern New Hampshire University.

“We will see if the old adage about fiscally frugal Yankees remains true,” New England College political science professor Wayne Lesperance said. “Voters are likely to see some relief at tax time with the increased standard deduction and modestly reduced tax rates. Republicans will be able to point to a promise kept on tax reform.”

But working against the Republicans is the timing of the law. The majority of Americans won’t truly feel the effects of the tax cuts until they file their 2018 returns in 2019, months after the midterm elections.

Saint Anselm College associate professor of politics Chris Galdieri says the tax law may take center stage in the wide open race in New Hampshire’s First Congressional District, one of the best swing districts in the country. Six Democrats and two Republican candidates are running to try and succeed retiring Democratic Rep. Carol Shea-Porter.

“With such a large field of Democrats running, there may be a temptation for each candidate to try to out-do the rest in terms of opposition to the tax bill and plans to repeal, replace, or amend it,” Galdieri said.

The tax cuts may have less of an impact in the race for governor. Sununu currently enjoys high approval ratings in public opinion polling, thanks in part to seeing most of his agenda passed this year by the state legislature.

“In the governor’s race, whichever Democrat winds up with the nomination will try to use Governor Sununu’s support for the tax plan against him,” Galdieri said. “The question there is whether criticism about Sununu’s support for the Trump agenda on this and other issues is enough to make a dent in the governor’s high approval ratings.”