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Sunday Political Brunch:  Tax Reform - To Infinity And Beyond? - December 24, 2017

Sunday, December 24, 2017
Mark Curtis, GoLocalPDX Contributor

Republicans passed major tax reforms by Christmas, as promised. This has implications for all our pocketbooks, and it has political implications for everyone running in the 2018 midterm elections. It's a multi-faceted issue. Let's "brunch" on that this week:

"Rich Man; Poor Man" – The political debate in this country has not changed in my lifetime, and I doubt it ever will. "The Republican are the party of the rich; the Democrats are the party of the 'people,' the middle class and the poor," many say. But is that true? If it is, then why have the Republicans (and conservatism) been the top political philosophy since Ronald Reagan won in 1980? If you make the argument that the GOP only represents "the top one-percent" of income earners (a fallacy), then how do they get the votes to control Congress, and most statehouses in the nation? The math doesn't work. It's faulty political analysis. The electorate is more complex.

"Corporate Cuts" – Forget the personal income tax for a moment, (because most Americans will benefit from that, at least in the short term). The big deal may be the cuts in the corporate income tax rates from 35 to 21 percent. That's the train to watch. If cutting corporate taxes makes us more competitive internationally, and more economically viable within our borders, who will benefit? This will pour billions into U.S businesses, but will they pay workers more? Or will they give most of the benefits to stockholders and board members? Will they invest in research and development of new products, that grow their industry sectors? And even if worker pay raises don't happen, will they cover a greater share of benefits such as health care? Stay tuned.

"Election Fallout" – This will be the only major legislative victory of the Trump Administration and the Republican-led Congress in 2017, as we head into the critical 2018 midterm elections. As I've often said politics is a," What have you done for me lately?" business. But economics drives politics. When Ronald Reagans asked in 1980, "Are you better off than you were four years ago?" Most people said, "No!" Many see incremental benefits from the tax cuts beginning in early in 2018. It may be just 10 to 20 bucks a paycheck. Is that enough to sway an election?

"The Trump Factor" – Unlike the nine special elections we've had in 2017 (which were not referendums on President Trump), the collective 2018 elections - with the entire 435-member House of Representatives up for grabs, plus 33 seats in the Senate - is most certainly a referendum on the Trump Presidency and agenda.

"National Debt Argument" – One of the weird turn-of-events this week was basically a party role reversal. Republicans have always claimed to be the deficit hawks, trying to reign in the national debt. They often blamed President Obama for doubling the national debt from 10 to 20 trillion dollars. (In fairness, the national debt accelerated under most recent Presidents simply due to the staggering interest payments adding to the debt). Still, it was fascinating this week watching Republicans advocating for tax reforms that add another 1.5 billion dollars in debt; while Democrats argued against the debt hike. What a turnabout.

"Momentum" – In the short run, Republicans gained momentum this week. Tax reform is the GOP's first major legislative victory of the year. If voters like seeing more money in their paychecks in 2018, it could be a momentum booster. On the other hand, the GOP has won five special elections this year; the Democrats won four. What that likely indicates is a very competitive campaign trail in 2018. I predict GOP gains in the U.S. Senate; but big gains by Democrats in the U.S. House. It could also mean some state legislatures and governor's offices switching parties, too. 2018 looks to be a volatile political year.

"Prosperity and Peace" – On both of Hillary Clinton's White House bids, former President Bill Clinton often viewed it as a referendum on his own two terms. "What didn't you like, the peace or the prosperity?" Mr. Clinton often said on the campaign trail in 2008. Whether you like him or not, he has among the best political instincts I've ever seen on either side of the aisle. His point is well-taken. If the nation is at peace, and the economy is accelerating, you'll make a lot of fans. The last two big economic booms happened in the Reagan and Clinton years. And yes, while there were terrorist attacks and military strikes, the U.S. maintained an upper hand internationally. Could Trump gain the same stroke of luck and popularity surge? Watch!

"Reagan 1982" - A lot of people want to compare President Trump with President Reagan - which I think is a stretch - but there are some items worth noting. President Reagan had a rough first year with the economy worsening (not to mention the assassination attempt). He, like Trump, struggled to get any major legislation passed even though the GOP controlled the Senate and had at least a philosophical majority with conservative Democrats in the House. But it wasn't until Regan got major tax cuts passed in 1982, that the economy really got cooking, and Wall Street soared as it is doing now. We'll see if history repeats itself.

"Virginia" – The most fascinating political fight in the country right now is battle for control of the Virginia House of Delegates. Republicans had a huge majority, but lost many seats on election night. They held a one-seat lead, with one race in a recount. This week that recount gave a Democratic challenger a one-vote lead, only to have a Court of Appeals reinstate one Republican vote, making it a tie. If that holds, Republicans may control the House. If it doesn't they'll be in a 50-50 seat tie with Democrats and must find a power-sharing agreement. Political movements are built from the ground up, not from the top down. If Democrats are really on the rise again in this country, watch your state legislatures as an early indicator!

What are your political predictions for the 2018 elections? Just click the comment button at www.MarkCurtisMedia.com.

Mark Curtis is Chief Political Reporter for the five Nexstar Media TV stations in West Virginia.


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