GOP messaging on tax reform has been interesting to say the least. Tax cuts for the wealthy are very unpopular, except among the GOP donor class. 'Trickle Down' economic theory, which asserts that low taxes on corporations and wealthy individuals spurs economic growth that ultimately benefits everyone in society, is also a tough sell. Empirical studies have shown that in reality, such cuts do the opposite of what trickle down theory says they should; they increase budget deficits (which Republicans supposedly care about), and even diminish economic growth. The abject failure of high tax cuts in Kansas serves as a recent warning of just how damaging these policies can be to the economy.
At the end of the day, the GOP donors want their tax cuts though, so it is up to the GOP to pitch them to the American people. They have set up a website fairandsimple.gop to make their case. Read the whole site if you have time, it is truly fascinating, and the way they talk about elimination of various tax deductions is particularly interesting. Elimination of certain itemized deductions are discussed under the heading: "Eliminates loopholes for the wealthy, protects bedrock provisions for middle class."
This clearly invokes some of the populist messaging that has been used by various candidates that appeals to the sense that many have that the wealthy in the country do not pay their fair share in taxes. Combine that with the fact that the GOP plan doubles the standard deduction, which lowers the tax liability for those who do not have very many itemized deductions, and it seems like perhaps the GOP is really making an honest effort to lower taxes for the middle class.Read More