Democrats counting on an angry, anti-Trump vibe to propel them to victory in November’s congressional elections may be in for a surprise as voters begin to see the effects of last year’s tax overhaul in their paychecks.
In Homestead, Florida — a battleground city where Hillary Clinton trounced President Donald Trump by 16 points in 2016 — incumbent Representative Carlos Curbelo has been called “the most endangered Republican in Congress” by a hometown paper. But interviews with more than a dozen potential voters indicate that some are feeling more positive about the GOP thanks to their revamp of the tax code.
Isabel Valencia, 34, said she’s seeing about an extra $50 a month from the tax cuts — no small sum for a mother of two earning $25,000 a year in a local pediatrician’s office. Valencia’s husband lost his job recently, so her family moved in with her brother. She didn’t vote in the 2016 elections because she said she doubted that her vote mattered.
“Yes, absolutely, it does encourage me to vote, and, yes, it makes it more likely to vote Republican,” Valencia said, referring to the tax cuts.
The effects of the GOP tax overhaul are starting to trickle through the economy. Large employers changed withholding amounts in January and all were required to use the new tables by Feb. 15. An employee with taxable earnings of about $40,000 annually received a biweekly paycheck increase of about $28, said Pete Isberg, vice president of government relations for Automatic Data Processing, which handles paychecks for one in six workers in the U.S. An employee with taxable earnings of $75,000 got a boost of about $70, he said.
Trump and Republican lawmakers have highlighted the paycheck bumps as evidence that their cuts are working and middle-class Americans are benefiting. Democrats have called the changes “crumbs” relative to the billions of dollars in savings for corporate America under the new tax plan. And top Democrats have expressed concern that the new tables would underwithhold income taxes for 2018 to boost workers’ pay before the midterm elections but could leave them owing federal income tax when they file in 2019.
Still, some Homestead residents who previously voted for Democrats are starting to view the GOP more favorably following the tax code changes. Annette Padilla, a 37-year-old mother of six, voted for Clinton and President Barack Obama before her, but said she likes Trump’s emphasis on creating jobs even if he comes across as a bully. She recently lost her job, so her family is relying on her husband’s $40,000-a-year job fixing equipment for a swimming pool company.
“If we start seeing more in our checks, then yes, that’s a start,” she said regarding her inclination to vote Republican in future elections.
Outside of Florida, Republicans in high-income, high-tax states like New York, New Jersey, California and Illinois — where the new $10,000 cap on state and local tax deductions will be felt acutely starting next year — could face more pressure. Democrats in those states are trying to get voters to look beyond the immediate benefit of higher take-home pay.
A University of Michigan survey showed consumer sentiment rose unexpectedly in February to its second-highest level since 2004. The survey’s director cited consumers’ greater awareness of tax savings as companies start to use the new withholding tables. The Bloomberg Consumer Comfort Index also improved in February to the second-highest level since March 2002.
Voter sentiment about the tax overhaul itself has also been improving. Fifty-one percent of Americans said they approve of the new law while 46 percent disapprove, according to a New York Times poll taken between Feb. 5 and Feb. 11 by SurveyMonkey. Support for the change stood at just 37 percent when the law was passed in December, the Times reported. Polls that once showed huge likely gains for Democrats in the midterms have started to level off, too.
“If you are an average worker, you are getting paid more and there is less withholding,” said Joseph Lavorgna, chief Americas economist for Natixis. “Most people are going to notice the difference. A lot of people live paycheck to paycheck. If it’s $25 or $50 or $100, that’s important.” full story