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Outsiders vs. Insiders: For the GOP Congress it’s pass tax cuts now or pay with defeats later

One week removed from the frustratingly humbling results of the 2017 elections, many conservatives and Republicans are still trying to figure out what happened in Virginia and whether the results constitute worrisome harbingers for what’s to come in 2018 – or if they’re merely an outlier in the transformational populist age of President Donald Trump.

There’s been plenty of blame to go around – some claim Trump’s low approval ratings dragged down the whole of the GOP; others argue the losses were due to the state party’s forcing of an establishment candidate on the Ryan and McConnellOld Dominion’s conservative and populist voters. Still others suggest there’s no one at fault for the drubbing -- instead, Virginia’s left-leaning demographic trends would’ve swamped anyone running against Democrat victor Ralph Northam.

Clearly the GOP’s identity crisis persists one way or another. For anyone who thought 2016 might have solved the question of who holds the power in the Republican Party, 2017 blew the matter wide open again.

Not even the Democrats can crack the mystery. Longtime Clinton pollster Mark Penn wrote in The Hill over the weekend, “Overall, Gillespie was a D.C. lobbyist and party chairman; he couldn’t battle ‘the swamp’ — he was ‘the swamp.’ It wasn’t Trump who lost those moderate men, but Gillespie, who was neither fish nor fowl to them; he wasn’t going to do a better job on the core issues than Northam, and the last-minute Hail Marys on the social issues probably just created more confusion about who he was.

“People want these elections to be about simple storylines and, yet, real events are more complex. This election was one-part moderate Democratic candidate, one-part anti-Trump reaction, especially among young women, one-part successful state Democratic administration that people wanted to continue, and one part ‘swamp’ establishment lobbyist from a disrespected Republican Party.”

I’m not a professional pollster – or a Democrat supporter -- but judging by the horrific results in my own Prince William County, last week’s election had just as much to do with disinformation and voter ignorance as anything else. In his article Penn provided statistics indicating healthcare was the number one concern among Virginians last Tuesday and young single women shifted even further away from the GOP than they did in 2016.

As I reported several weeks ago, the Democrats ran a number of TV ads claiming Ed Gillespie wanted to “ban” abortion, an action that’s not even possible at the state level and is certainly beyond the limited constitutional powers of Virginia’s governor. Perhaps because of the commonwealth’s leading role in declaring independence from Great Britain, Virginia’s forefathers purposely shackled the reach of the executive. The Founders (yes, many of the same ones who drew up the United States Constitution) didn’t trust a single individual to wield power over the elected members of the legislative bodies.

No governor of any state in the 21st century is truly “weak,” but if there are any in America that can’t do a whole lot of damage on their own, Virginia is such a place.

To begin with, Virginia governors cannot hold office for consecutive terms; they can serve more than one term if they so desire but to do so requires at least a four-year hiatus between successful elections. The one-term limit effectively makes every Virginia governor a lame duck the moment he sets foot in the governor’s mansion.

In the time I’ve lived in Virginia no one-term governor’s ever tried to run again four years later (if anything the office has served as a springboard for U.S. Senate campaigns). It’s one-and-done in government at its best. Maybe for that reason the legislature doesn’t really fear the executive around here.

As an example, current Virginia Governor Terry McAuliffe tried on several occasions to nudge the Republican-controlled state legislature into adopting Obamacare’s Medicaid expansion. Wisely, the commonwealth’s representatives and senators wouldn’t relent and because of their principled defiance Virginia was spared the same budget dilemmas that so many other states find themselves in with the coming reductions in federal funding under the law.

Northam could and probably will try to slip Obamacare through again – but it’s unlikely to pass even if the Democrats end up with a majority in the House of Delegates (there are still a few outstanding races). Republicans still hold a slim preponderance in the Virginia Senate and there will be enormous pressure now to hold the line.

Likewise it’s hard to see how the issue of abortion would be affected at all even if Gillespie had beaten Northam. Therefore, all of the Democrats’ “Republicans want to ban abortion” ads were simply intended to frighten those young single women rather than offering anything of substance. The same goes for the heinous “nightmare” ad where the George Soros-backed “Latino Victory Fund” depicted a white Gillespie supporter chasing after minority children in an ominous sounding pickup truck.

2017 simply wasn’t a triumph for identity politics or Democrats coming back after Crooked Hillary took a nose dive last year. Still the leftists claim it was all about Trump. Eddie Scarry wrote in the Washington Examiner, “Anyone with the thinnest knowledge about politics knew that Democrats would almost certainly win the governor races in New Jersey and Virginia and that they were likely to win the mayoral race in Charlotte, N.C.

“Both of Virginia’s U.S. senators are Democrats and the state voted for Hillary Clinton in 2016 and for Barack Obama in 2012 and 2008. The same goes for New Jersey, and though the state has had a Republican governor for two terms, it’s the long-obsolete Chris Christie, whose approval this summer was as low as 15 percent.”

Republicans prevailed in every special election to replace House members (moved on to the Trump administration) this year. The simplest way to break down 2017’s results is Republicans continue to hold GOP territory and the Democrats do the same on blue soil. Recent signs in Virginia appeared to point towards Gillespie making the race close, but in the end, it was the Democrats’ day by a wide margin.

Let them enjoy it for a while. If Democrats stew too long in their own celebratory pudding they may turn their attention away from the more pressing matters ahead, such as tax reform.

The recent introduction of the House Republicans’ plan generated its fair share of commentary from liberals and conservatives alike, with most contributors pointing out some hole or problem with the new formulation. Democrats aren’t going to back a GOP plan under any reasonable circumstances so it’s probably best to wholesale ignore what they’re saying.

But by the sound of the chatter from the right Republicans are going to have a difficult time keeping everyone together. And even if they do manage to pass a “reform” bill, some in the media claim it won’t ultimately help them solve their current political problems.

Josh Kraushaar wrote at the National Journal, “The political calendar is creating the urgency for tax reform, not economic conditions or pent-up demand from voters. The economy has been growing steadily without any legislative tinkering. Tax reform is an issue that gets the entrepreneurial wing of the Republican Party excited, but it isn’t as energizing among the blue-collar voters who make up a growing share of the GOP.

“In swing-state Virginia, which shares similar demographics to many House battlegrounds, voters ranked taxes third behind health care and gun policy among their top issues in last week’s gubernatorial race.”

The confusion appears to stem from the public’s uncertainty as to what the House plan really does. The media focuses on the deductions that would be eliminated under the proposal – such as for state income taxes – and doesn’t really mention the potential benefits to the overall economy from expected economic growth.

Naturally the White House touts the business tax reductions which could fuel an economic boom – but the concept is too nebulous for citizens to understand, especially when there are Democrats and some Republicans in high tax states (such as New York and California) complaining about their constituents potentially having to pay a higher tax bill.

There is some merit to the argument that Republicans should be singularly focusing on across-the-board rate reductions instead of completely reforming and simplifying the tax code, which admittedly few people care about when compared with how much they’re paying to the IRS every year.

Many a conservative commentator suggests the rate cuts need to come first – and once passed, the bigger “reform” issues can be tackled when the economy jolts into overdrive. This would seem to be the best strategy, which would eradicate the expected political snafus as well.

Will Republicans actually do it? It would be out of character for them…to do something smart that is. Derek Hunter wrote at Townhall, “The tax code is a complex monster, and taming it would be good. But people don’t care about loopholes; they care only about paying less. Republicans, since they don’t have the will required to scrap the code and replace it with a flat or fair tax, should simply lower rates across the board, no caveats. People understand that.

“When you’ve got members of Congress going on TV to tout lowering the corporate tax rate, you’ve lost.

“Cutting the corporate tax rate would be a boon to the economy, but that’s a secondary ripple a year or two out. It should be included; it shouldn’t be a selling point. People want more money in their pockets. Everything else, beneficial or not, is window-dressing.”

Establishment tax “experts” would counter that such an explanation is far too simple and polls on the matter are incomplete or wrong. Economic growth should be the number one priority for any Republican administration but it cannot be underestimated just how politically damaging “reform” would be if the business tax cuts aren’t coupled with easily recognizable nuggets for the middle class.

And then there’s the very real notion that statistically speaking, half the country already pays nothing in income taxes. With hundreds of millions of Americans not having a “stake in the game,” the Democrats garner gobs of votes by raining government goodies down on the masses.

There is no simple answer to the tax question or to why the GOP underperformed in last week’s elections. Debate will go on for some time, but the grassroots’ patience isn’t unlimited and the Republicans’ complete control of Congress is only guaranteed for another year. Decision-time is at hand.

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