In the wee hours of Saturday morning, Senate Republicans passed their version of tax "reform," and you could feel the relief flooding over the Capitol. Yes, they were joyful that at long last, corporations and the wealthy will find the terrible burden of taxation under which they struggle lightened considerably. But even more, Republicans knew that they had averted political disaster by finally accomplishing something, sparing themselves the wrath of their ever-wrathful base.
The fight isn't over—there still has to be a conference committee to reconcile the House and Senate versions, and once it comes up with a compromise, that bill will have to pass both houses. But if the conference committee fails, the House could merely pass the Senate's version and be done with it. In other words, the chance that Republicans won't get their tax cuts is not quite zero, but it's getting close.
After they failed to repeal and replace the Affordable Care Act, Republicans convinced themselves that without any real legislative accomplishments to show for their time in complete control of Washington, they had better pass a tax cut or all would be lost. If they couldn't manage it, "That will be the end of us as a party," said Senator Lindsay Graham, echoing the sentiments of many of his colleagues.
The risk of disappointing their base was certainly justified. But with this mess of a bill, they've actually made their political problem even worse.
With the 2018 midterm elections only 11 months away, Republicans are looking at the possibility of losing not just the House but even the Senate as well. While the latter is a longshot—Democrats are defending 25 seats, while Republicans only have to defend 9—it no longer looks as impossible as it once did. Even taking just the House would utterly transform Washington for the last two years of Donald Trump's term.
It's hard to call this tax bill a miscalculation, since it has always been the most important priority for Republicans. But with their single-minded focus on appeasing their base (and their donor class), they seem not to realize that what they should really be worried about is the Democratic base.
That's because midterm elections are decided almost entirely on turnout, since only about a third of voters make it to the polls in those off-years. And what matters most in determining turnout in a midterm is which side is angrier. Democrats were already angry, and this tax bill is only going to get them more fired up.
That's in large part because of the particular way Republicans wrote this bill. Unlike many of their previous tax cuts, which gave most of their benefits to the wealthy but also gave everyone else a little something so they could say that everyone's taxes were cut, this bill raises taxes on tens of millions of Americans. As The New York Times explained, "By 2027, people making $40,000 to $50,000 would pay a combined $5.3 billion more in taxes, while the group earning $1 million or more would get a $5.8 billion cut, according to the Joint Committee on Taxation and the Congressional Budget Office." And as Ryan Grim points out, while we're calling it a $1.5 trillion tax cut, in truth the bill cuts $6 trillion in taxes, but increases taxes elsewhere by $4.5 trillion, making it simultaneously the biggest tax cut and the biggest tax increase in history.
Which means that it creates both winners and losers. And the ways it hurts so many people—the elimination of the deduction for state and local taxes (a particular "Screw you" to blue states with higher taxes), the targeting of graduate students and people with high medical expenses, not to mention the elimination of the ACA's individual mandate, which will lead to millions more uninsured and higher premiums—are starting to sink in. And that's before Republicans start trying to slash the safety net, which is their next priority.
The tax bill will negatively affect Republican and Democratic voters alike, but as a political matter, it's really going to piss off Democrats. At the same time, Republicans may find that their own constituents are less than overjoyed with the coming express train to economic utopia they've been promised. The tax bill is already proving a hard sell to voters who thought Donald Trump was going to take on the special interests and help out the little guy.
Polls are showing that the public has largely assimilated the Democratic message on this tax bill, that it's just a giveaway to those at the top paid for by the rest of us. A majority of Americans oppose the bill and believe it primarily benefits the wealthy; one poll even showed most small business owners opposing the plan, despite the fact that business owners are a reliable Republican constituency. Republicans have managed to write the least-popular tax bill in polling history. It's even less popular than prior tax increases.
The Democratic message, furthermore, has the advantage of being easy to understand, right in line with what people were already inclined to believe about the GOP, and most important of all, completely true. As people see that the benefits aren't trickling down to them and hear more about who's getting hurt, many Republican voters—especially those who were newly brought to the polls by the prospect of electing Donald Trump—may feel less than excited about voting for their local congressman when this is all Republicans have to show for their time in power.
Republicans are hoping that their bill will quickly supercharge economic growth, which will wash away all that stuff about the benefits for the wealthy as grateful Americans flock to the polls to thank Republicans for our newfound prosperity. But not only are those spectacular economic effects unlikely to be realized, even if they were, it might not matter. Unlike in presidential years, the economy actually has very little effect on the outcome of midterm elections.
The result is that 2018 could well see an energized Democratic base and an enervated Republican one, which is exactly the precondition for a wave election. Should that happen, Republicans in Congress will no doubt put much of the blame on their incredibly unpopular president, and they won't be wrong about that. But they're also working very hard to make their eventual defeat more likely.