As Senate Republicans struggle to nail down the last couple of votes to enact the GOP’s tax bill, a large irony is unfolding. This whole politically perilous exercise is being undertaken to a large extent to satisfy hungry GOP donors. But there are growing reports that a significant subset of said donors, particularly those living in high-tax states like New York, really don’t like the bill at all. David Drucker of the Washington Examiner has the story:
Wealthy Republican donors in the Northeast are closing their wallets, livid with the party for supporting a federal tax overhaul that penalizes their lifestyle and, in their view, abandons core tenets of conservative fiscal policy.
In gruff phone calls and angry emails, loyal GOP financiers have declined invitations to fundraisers and refused meetings with prominent Republican officials. The rejection has been especially acute in New York, a liberal bastion, but a major source of the party’s campaign cash.
New York, as you may recall, is the high-tax state full of godless liberal elitists that the GOP was eager to punish with an assault on the tax deduction for state and local taxes. Now that disdain for wealthy people in places like California, New Jersey, Illinois, and New York is coming back to bite the people charged with financing Republican politics in a painful way.
“I think checkbooks stay closed until they see how it plays out,” said Eric R. Levine, a Manhattan attorney and Republican donor who bundled contributions for Sen. Marco Rubio, R-Fla., in 2016. “I’m not even trying to raise money in the fourth quarter.”
But, but, but … this bill’s for you, you can almost hear fundraisers thinking, if not saying. It turns out, though, that some donors insist on looking at their own bottom lines instead of mindlessly endorsing any tax-cut bill. And they aren’t liking what they see there:
They foresee higher personal taxes under a plan that axes deductions for state and local taxes without offering what they consider compensatory reductions in marginal income rates, even with the repeal of the Alternative Minimum Tax that hits many upper-middle-class Americans. They resent that the bill excludes their white-collar service professions — think law, finance, and consulting — from the bill’s lower small-business rate, even as it shrinks the corporate levy to 20 percent from 35 percent.
Maybe they will be partially assuaged if the SALT “compromise” in the House bill (continuing a limited property-tax deduction) makes it into the final version, as Susan Collins believes she has been promised. But it’s very late in the game for the kind of significant changes that will turn donor frowns upside down.