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Wednesday, August 16, 2017

GOP thinks it has winning message on taxes

GOP thinks it has winning message on taxes
By Naomi Jagoda - 08-16-17 06:00 AM EDT

GOP lawmakers and strategists think they have a winning message on tax reform.

After a brutal fight over ObamaCare that included difficult votes and a painful loss on the Senate floor in July, Republicans are eager to move on to tax reform, which they argue will create jobs, simplify the tax code and put more money in people's wallets.

Voter enthusiasm for their legislation will be important.

Republicans desperately want to enact major legislation after the failure on ObamaCare, which was hastened by the dismal poll numbers of the GOP repeal bills.

Republicans can't afford to run into similar problems on their next top legislative goal.

The GOP thinks tax reform will be different, in part simply because tax cuts are an easier sell than the healthcare overhaul, which would have taken away benefits from millions of people.

"The focal point is this is about the American dream," Rep. Peter Roskam (R-Ill.), chairman of the House Ways and Means Subcommittee on Tax Policy, told The Hill on Tuesday.

Roskam, Ways and Means Committee Chairman Kevin Brady (R-Texas) and other members of the panel are pitching tax reform to the public on Wednesday at an event at former President Ronald Reagan's ranch in California.

Committee spokeswoman Emily Schillinger said that Brady "will speak directly to the American people about how members are working to deliver a new tax code - one that is fairer and simpler, creates more jobs, grows paychecks, and improves lives."

While Republicans think they have an easier argument to make on taxes than on healthcare, they still face significant challenges.

President Trump, who will need to be the salesman in chief for the proposal, has an anemic 38 percent approval rating in the RealClearPolitics average of polls. Those numbers will make Democrats less nervous about opposing him and could make it tougher for the White House to muscle any reluctant Republicans.

Republicans have been working over the August recess to get their constituents excited before the expected release of legislation in the fall.

In the past, tax cuts have been sold to the public through direct benefits.

In 2001, for example, President George W. Bush included rebate checks to taxpayers. Bush was also working with a budget surplus at a time when the nation's debt was not as great a concern as it has been in the last decade.

Rebate checks may not be in the cards this time, but GOP lawmakers are touting job creation, tax cuts for all individuals and simplification of the tax code as part of their pitch.

"What they need to be saying over and over is simple: that this is a jobs bill that is going to put money back in the pockets of Americans," said GOP strategist Ford O'Connell.

Speaker Paul Ryan (R-Wis.) stressed in an event last month at a New Balance factory in Massachusetts that "first and foremost, we're going to cut your taxes." His office also issued a news release on Tuesday that focused on why the tax code needs to be simpler.

These messages are part of the pitches for tax reform made by GOP senators and the White House as well.

"We believe everyday Americans know better how to spend their own money than the federal bureaucracy, and we want to help them keep as much of that hard-earned money as we can," Trump said in a weekly address in May.

But some strategists say the personalization of tax reform could be even more front-and-center in discussions.

GOP lawmakers and the Trump administration often spend a considerable amount of time discussing how tax reform will boost economic growth and business competitiveness.

Strategists suggested that it's important for Republicans to explain how more economic growth directly affects them, and some argued that lawmakers should cut to the chase and lead their tax-reform pitches with arguments about more jobs and more take-home income.

"The most important thing is to keep it on the day-to-day things that people are focused on, which in this case is jobs," said Jon McHenry, vice president of the GOP polling firm North Star Opinion Research.

Roskam agreed that it's important to keep the focus on what policies mean for constituents.

"Tax reform is not about charts and graphs," he said. "Tax reform is about changing the economic reality for everyday people for the better."

Experts suggested that lawmakers provide specifics, such as how much more money people will receive as a result of tax cuts and how many more jobs are likely to be created.

Conservative activists also said arguing for tax-code simplification is beneficial.

"Americans fear the IRS right now in part because the tax code is so complicated," Americans for Prosperity President Tim Phillips said.

Republicans talk about wanting to make the tax code so simple that most Americans would be able to file their taxes on a postcard, and lawmakers at events have held up a postcard based on the tax plan House Republicans released last year.

Jason Pye, vice president of legislative affairs at FreedomWorks, said that the postcard is an "effective visual."

Republicans will be vulnerable to attacks from Democrats that their tax plans amount to giveaways to wealthy individuals and corporations, since polls have shown that many voters believe rich people and corporations pay too little in taxes. Liberal groups and Democratic lawmakers are already organizing to push back against any proposed tax cuts for the rich.

Strategists said that a focus on jobs, across-the-board tax cuts and simplification could help Republicans' counter attacks from Democrats.

If Republicans make it clear that tax reform boosts jobs for everyone, they are "nullifying" Democrats' arguments about wealth inequality, O'Connell said.

Phillips said that if Republicans strip tax preferences for special interests out of the tax code as they intend to do, it will both make the tax code fairer and help to combat the arguments that legislation is benefiting the rich.

In addition to highlighting the tax breaks used by the wealthy that will be eliminated, some also suggested that GOP lawmakers point to aspects of their tax plans that specifically benefit the middle class, such as a larger standard deduction.

"I think you'll be able to cushion the blow considerably," said Rohit Kumar, a former aide to Senate Majority Leader Mitch McConnell (R-Ky.) who now leads the tax policy practice at PwC.

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