Tax-Cut Pitches Land With Thud as Voters Fixate on Immigration

(Bloomberg) -- Republican leaders wanted to tout the six-month anniversary of their tax cuts this week. The rest of Washington was too busy to join the fanfare.

Instead, to GOP dismay, another issue dominated the headlines: immigration. It was the latest example of the struggle Republicans face in making the tax overhaul -- their signature legislative achievement -- resonate with voters.

“I haven’t had time to mark this important date,” Representative Carlos Curbelo, a vulnerable Florida Republican heavily involved in the negotiations over an immigration bill and a member of the tax-writing Ways and Means Committee, said Thursday.

With less than five months of campaigning to go until the November midterm elections that will determine control of Congress, taxes don’t rank among the top five most-pressing issues for voters, according to a recent Gallup poll. And some political consultants are even steering Republican candidates away from tax issues in their re-election campaigns.

Recent spats between President Donald Trump and GOP lawmakers -- over immigration policies that separate parents and children illegally crossing the border and additional tariffs on U.S. trading partners -- have deflated the legislative euphoria Republicans briefly felt after passing the tax cuts. It’s a common theme -- last year, indictments and guilty pleas in Special Counsel Robert Mueller’s investigation into the Trump campaign competed with the rollout of the tax legislation.

Immigration Questions

House Speaker Paul Ryan used events this week to showcase the tax cuts, calling them a “game-changer for people in this economy.” On Wednesday, he put forth other top Republicans, who also tried to highlight the positive effects of the tax cuts. Almost every question the lawmakers received was about immigration.

Just a day earlier, Senator Orrin Hatch, the Utah Republican who led the Senate’s tax cut charge, gave a speech praising the law. At that moment, every network was focused on Trump, who was about to sign an executive order that ended the policy of separating undocumented immigrant children from their parents.

“I run campaigns all over the country and in every poll we run -- in every district, no matter where it is -- the No. 1 issue for Republicans is immigration. It’s not even close,” said Harlan Hill, a GOP consultant and adviser to Trump’s 2020 re-election campaign.

Immigration issues have even crept into the tax cut messaging. As lawmakers debate changing the laws for immigrants to legally obtain jobs in the U.S., they also say the economy is demanding more workers.

“We’ve gone from a country that asks ’where are the jobs’ to one that asks ‘where are the workers’,” House Ways and Means Chairman Kevin Brady, a Texas Republican, said in an interview.

Approval Dips

Approval of the Republican tax law has slipped six points in the last two months, according to a Monmouth University poll released earlier this week. The survey found that 34 percent of Americans approve, while 41 percent disapprove.

Several surveys show approval of the law falling after increasing earlier in the year, following favorable coverage about companies using their corporate tax-cut windfalls to give raises and bonuses to workers. But those gains have since faded and Democrats have continued to hammer what they deride as a "Republican tax scam" that has disproportionately benefited executives and wealthy Americans.

Perceptions of the tax law aren’t positive even in Republican-dominated states -- a Quinnipiac poll of Texas voters taken in April found that 43 percent of voters there approved while 45 percent disapproved of the law.

‘Hurricane of Issues’

Republican strategists who had hoped to focus their fall campaigns on the tax law are having second thoughts. One firm seeking to protect the party’s congressional majorities has seen a drop-off in the effectiveness of its ads touting the overhaul and is mulling a pivot to other issues amid doubts in the tax law’s ability to persuade or mobilize voters to back GOP candidates, according to a person familiar with the matter who was granted anonymity to discuss it.

“It’s not hard to run on taxes so long as the economy is doing well,” said Jason Fichtner, senior research fellow at the Mercatus Center at George Mason University. “But it’s hard to go out and talk about tax law changes when it’s drowned out by trade, immigration, detainments, malfeasance and potential abuses of power by officials.”

After trying different messaging tactics -- such as the tax law leading to tax hikes -- Democrats are now focused on Congressional Budget Office projections showing the law’s provision to scrap the Obamacare individual mandate tax penalty is causing higher health-care costs.

While taxes ranks low on the issues motivating voters, several recent surveys have found that health care is the top issue for Americans nationally.

Debbie Mucarsel-Powell, the Democrat facing Curbelo in one of the most competitive races, released a statement Wednesday blasting the Republican for having voted for Trump’s "massive tax cut for corporations that will line the pockets of the wealthiest Americans, including his family and donors, and will raise health-care premiums for families everywhere."

Republicans are hoping to revitalize interest in taxes by introducing legislation that would extend the tax cuts for individuals and streamline tax-favored retirement and education savings accounts.

“There are a hurricane of issues right now in Washington, which makes it harder,” Brady said. “I know this, if tax reform weren’t working there would be plenty of coverage of it. Every indicator is better than before.’”

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