Dem 47
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GOP 53
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Republican Midterm Strategy: Talk about the Tax Cuts in the BBB

At a briefing yesterday morning on Capitol Hill, Republicans were told to push the BBB, but talk about tax cuts, not Medicaid cuts. The idea is to reframe the bill as the working families tax cut bill. At the meeting, White House staff discussed polling done by Tony Fabrizio, Donald Trump's longtime pollster, in 22 battleground districts. Although the bill as a whole is polling badly, the tax cuts are polling well.

The tax cuts are a complicated mix of provisions. Some just make permanent the ones that were in the 2017 tax bill. They will be a tough sell because people will see no difference with what they are paying now. A few changes are genuinely new, like no tax on tips. Of course, that applies only to tips that are reported and previously taxed. It is likely that many people who were tipped in cash never reported (or under reported) their tips anyway, so all the change does is make legal what they were doing anyway. One change that will be very noticeable is the increased itemized deduction to $40,000 for state and local taxes (SALT). This will mostly benefit well-off suburbanites in blue states. That it will be enough to get them to switch teams is doubtful because joint filers get an automatic deduction of $31,000 if they don't itemize and up to $40,000 if they do. It is not a huge difference.

The bottom line is that many people will not notice much of a change in their take-home pay now although some might have less tax due or get a bigger refund next spring. For people who will absorb the Medicaid and other cuts, the tax cuts are not going to make much difference since the result will still be negative for them. The number of people who might switch sides due to the tax cuts is probably fairly small. (V)



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