Republicans have a surprising task when it comes to selling their tax overhaul to the public: convincing voters they've gotten a tax cut.
It may be hard for some to realize because, rather than sending out big, flashy rebate checks — as former President George W. Bush did with his 2001 tax cuts — Republicans are doling out the cuts piecemeal over the course of the year, as bumps in people's paychecks.
The average person earning between $50,000 and $75,000 will see a roughly $30 increase in their checks, assuming they're paid biweekly.
Some may not notice the increase, especially when all sorts of other things can affect people's take-home pay, from pay increases to hikes in premiums for employer-sponsored health insurance.
Democrats, meanwhile, have made Republicans' sales job harder by highlighting those who will face tax increases under the GOP plan. A string of recent polls show one-third of voters believe they will pay more under the plan, though in reality, just 5 percent are expected to see tax hikes this year. About 15 percent of taxpayers will see essentially no change in their tax bills, according to the Tax Policy Center.
“For some people, this is going to be less visible than Republicans think,” said Howard
Gleckman, a senior fellow with the group. “It’s going to be really challenging to get people to notice that they got a tax cut.”
Many Republicans scoff at the idea that people may not realize their taxes have declined, saying they keep a close eye on their earnings, but it's happened before.
Former President Barack Obama had a similar tax cut in 2009 and 2010, offering up to $800 to couples that went largely unnoticed.
As with the new Republican plan, Obama's "Making Work Pay" cut was parceled out incrementally by changing how much was withheld from millions of workers' paychecks.
Many economists believed people were more likely to spend the money if it was distributed that way, rather than with a big, lump-sum payment, and the Obama administration was trying to stimulate the economy amid the Great Recession. But a 2010 New York Times/CBS poll found that fewer than 10 percent of voters had even realized their taxes had been cut.
“As a political matter, that was a terrible way to design a tax cut,” said Jason Furman, who was head of Obama’s Council of Economic Advisers.
When Bush cut taxes in 2001, he took the opposite approach, sending 95 million taxpayers lump-sum rebate checks. In case that wasn’t enough, he also had the IRS send out notices to taxpayers beforehand, alerting them to the coming payments.
Sen. Thom Tillis (R-N.C.), who once called Obama’s plan “the tax cut that fell in the woods — nobody heard it,” said Republicans must underscore for voters that their taxes are going down.
“It’s on us to go back and ask people at the end of the month or the end of the year, 'Do you have more or less money?'” he said.
The savings add up, even if they do come bit by bit, he said.
“Multiply that paycheck by the number of pay periods per year — then it becomes meaningful to people who are really struggling to get by,” Tillis said.
Taxpayers should begin seeing changes in their checks as soon as next month, after the Trump administration released last week the withholding tables payroll administrators use to compute how much to take from each worker's paycheck.
The coming increases are key to Republicans’ efforts to sell their tax plan because for many people, it will be the first time the law affects them personally.
Though the centerpiece of the plan was a big cut in the corporate tax rate, it also reduced individual rates, expanded the standard deduction and doubled a popular credit for having children. But the law also scaled back a long-standing deduction for state and local taxes, pared the mortgage interest deduction and junked personal exemptions.
The net result is that 80 percent of taxpayers will see tax cuts this year, according to the Tax Policy Center, though how much will vary widely by taxpayer.
An analysis the group released last month provides a rough gauge of how much people will get.
Those earning between $30,000 and $40,000 will see their taxes fall by $360, which, divided into 26 pay periods, equals about $14 per check. Those earning between $100,000 and $200,00 will get $2,260, or around $87 per pay period. The typical taxpayer earning between $200,000 and $500,000 will get $6,560, which translates to about $250 per check.
Those numbers are somewhat overstated because they assume people will benefit from the law's cuts in business taxes, even if that doesn't actually show up in their paychecks. Also, not all of the tax savings will be distributed this year in paychecks — some of the money won't come until people get their tax refunds next year.
They are also averages, and there will be wide variations among taxpayers, depending on individual circumstances. Some will get bigger tax cuts, and some will pay more.
It may not be obvious to some people, though, how the law affects them, because their take-home pay can change for other reasons — if they work more hours, or if they contribute more to 401(k), or if their local taxes change. What’s more, most people have direct deposit, another reason it may not be readily apparent to them why their pay changed.
“How many people do you know actually look at their pay stubs anymore?” Gleckman said.
Democrats have highlighted people who will pay more under the plan, though that’s mostly a long-term phenomenon because the individual tax cuts expire after 2025. Republicans say they expect those provisions to ultimately be renewed, just as Congress extended most of Bush’s tax cuts.
Just 29 percent think they will benefit from the new law, according to a survey released Wednesday by the nonpartisan Pew Research Center. Sixty percent said they expect it to have a “mostly negative” or “not much” effect on them personally.
That could conceivably help Republicans if people are pleasantly surprised to see their taxes fall instead, and many lawmakers say they are confident voters will appreciate any increase in take-home pay.
“Have you ever been unhappy with more money?” asked Sen. Tim Scott (R-S.C.). “I don’t know that anyone is going to sneeze at an increase in take-home pay.”
For many people, even “20 or 30 bucks a paycheck is significant,” he said.
Republicans are also pointing to the bonuses many companies are providing workers in the wake of the law's enactment. Just wait, they say, until taxpayers start getting those bigger paychecks.
“In March or April, let’s go back out and see what people think about it,” said Whit Ayres, a Republican pollster. “You better believe they’re going to know that something has happened.”