Republicans are relieved to finally be chalking up one legislative accomplishment, now that their tax cut’s success looks, if not certain, then at least probable. They should enjoy it while they can. In part because of that win, their party is about to become unrecognizable.
What will the tax overhaul mean for Republicans’ electoral chances and the future makeup of the party? Think back to what happened to Democrats in 2010 after the passage of the Affordable Care Act. Success on signature legislation is to some extent why parties exist, but it often changes parties and leads to electoral losses in the short run.
It’s now been over seven years since the passage of the Affordable Care Act, and with the benefit of hindsight we can say two things: Democrats remain overwhelmingly in support of its passage, and it probably contributed to their electoral problems ever since, as just about every Republican since 2010 has campaigned against Obamacare. That’s not a paradox: A party is made up of various coalitions, and by passing signature legislation it is prioritizing the interests of some over others.
For instance, one of the more unpopular parts of the Affordable Care Act is the individual mandate requiring people to buy coverage or pay a penalty. The reasoning for the mandate is to incentivize healthy people to join the system or pay a fee — either of which shores up the program’s finances. But as the New York Times showed, the individuals most likely to pay the penalty are those earning $25,000 to $50,000 per year, an income bracket with a lot of overlap to the coalition of working-class white voters who elected Donald Trump.
When the Affordable Care Act was passed, some might have thought that lower-middle-class Democratic-leaning voters who started voting Republican as a result of the individual mandate would bring Democratic Party values with them. Instead, what may have happened is they brought attitudes on trade, immigration and race with them, transforming the Republican Party into the more Trump-friendly version we see today. The Democrats who have remained are much more race-conscious and have elevated that concern within the Democratic Party since 2010.
Which brings us back to the Republicans’ current tax cuts. They will help some historically Republican voters, and hurt others. The Republicans most upset by the legislation are well-educated, high-earning families in blue states like New York, New Jersey and California — people who may see their taxes rise significantly because Congress eliminated or reduced the deductions on state and local income taxes. There may be others who support the tax bill (like beneficiaries of pass-through income) but aren’t fans of President Trump’s tweets and behavior. They may be to the 2018 midterm elections what angry working-class white voters were to the 2010 elections.
The epitome of this might be Arizona Republican Sen. Jeff Flake, who voted for the tax bill but also tweeted out a picture of a check he’s donating to Senate candidate Doug Jones, Democrat of Alabama. These “country over party” Republicans may be the decisive voters in the midterm elections, pushing the Democratic Party even more in the direction of cosmopolitanism, women’s rights, and a rejection of some cultural values espoused by rural and older Americans.
And the flipside of this is it will move the Republican Party even more in the direction of Donald Trump. The Republican Party is set to lose at least two senators in 2018, as Flake and Bob Corker retire. The chamber may well add a Sen. Roy Moore, pending the results of Tuesday’s election in Alabama. While the Republican Party is likely to remain the party of lower taxes, it’s unlikely that any major tax cut will be debated for the foreseeable future, elevating other issues of importance within the party — issues more likely to appeal to Trump and his cultural supporters rather than business-focused voters.
The GOP’s success on taxes this year may be the last hurrah for the party of Reagan and Bush. From now on, it’s all about Trump and his faithful.
Conor Sen is a Bloomberg View columnist. He is a portfolio manager for New River Investments in Atlanta and has been a contributor to the Atlantic and Business Insider. Readers may email him at [email protected]