Eberhart said the Trump administration wanted “an immediate reaction” so it reduced the amount the IRS withholds from regular paychecks starting in 2018.
‘Too Small’
The move backfired. “It was too small an amount for most to notice,” he said. Adding to voters’ frustration, their tax refunds were smaller than expected, down about 1.1 percent overall, but still noticeable to individual households.
White House economic adviser Kevin Hassett on Friday dismissed poor poll results, saying that they might be explained by general frustration with the tax system broadly. He cited other data, such as the Michigan survey of consumer sentiment, that “suggest that you should have a very optimistic outlook for economic growth this year."
The tax law, passed by Republicans without any Democratic support, lowered the corporate rate from 35 percent to 21 percent and cut individual taxes across income brackets for eight years. It doubled the standard deduction and enhanced the child tax credit. And it closed or tightened various tax breaks — most notably by capping the amount of state and local taxes that can be deducted — which had its biggest impact on residents of high-tax, largely Democratic-run states.
There’s “no question” that the advantages for businesses from the tax plan have just begun to kick in, Treasury Secretary Steven Mnuchin told Fox Business Monday. He said those benefits will become more apparent over the next few years.
2018 Campaign
Democrats spent their 2018 midterm campaigns hammering the law as a giveaway to wealthy Americans that would widen the deficit and put popular programs like Social Security and Medicare on shaky ground. A Republican-commissioned poll before the election found that message to be effective.
According to exit polls for House races published on Election Day 2018 by CNN, 29 percent said the new tax law helped their finances; that group overwhelmingly supported Republican candidates. But 45 percent said the law had no impact and 22 percent said it hurt their finances, and those categories overwhelmingly backed Democratic candidates.
Ryan Ellis, a conservative tax lobbyist, blamed negative news coverage for the unpopularity of the tax law. "People don’t know about their own taxes," he said, adding that they "get half baked ideas" from the way the law is portrayed.
Republicans didn’t understand what the broader public wanted from a tax bill, said Morris Pearl, a former managing director at BlackRock Inc., who now chairs Patriotic Millionaires, a group of wealthy individuals who advocate for higher taxes on the rich.
“They forgot that the people who show up at their $1,000-a-plate fundraisers are not representative of all people,” Pearl said. “They overreached with their tax bill and tilted the system in the favor of the very wealthy and large corporations.”