Republican donors, who collectively donated $50 million in the 2016 election cycle, seem to be holding back this year.
Why? They’re upset they didn’t get as big a tax cut as corporations did in the tax law President Donald Trump signed into law late last year.
A new report in CNN found that a number of top GOP donors — namely those who lead major hedge funds — haven’t been as generous with the official Republican House and Senate campaign arms this year, and it all comes down to some testiness over the tax bill:
Collectively, they have bristled at what they view as favored treatment for corporations under the law. While the corporate tax rate was slashed from 35% to 21%, hedge funds are largely taxed at the top individual rate, which ticked down from 39.6% to 37%.
Well-known Republican donors like Paul Singer of Elliott Management, who is among the top 10 GOP donors, and Warren Stephens of Stephens Inc. and Citadel’s Ken Griffin, who are among the top 20 donors, have yet to make major contributions to the National Republican Congressional Committee (NRCC) and National Republican Senate Committee (NRSC).
To be sure, as CNN pointed out, these top donors haven’t held back from contributing altogether (Singer gave six figures to the Republican National Committee, and others are donating to campaigns in their states). Not to mention that Republicans just won a massive $30 million contribution from billionaire casino mogul Sheldon Adelson to the GOP-tied Congressional Leadership Fund — a Super PAC that will be crucial to boosting Republican candidates in House races this year. But it’s notable many are withholding donations to the NRSC and NRCC.
Needless to say, there’s some comedic value to this boycott. The tax bill, if anything, is a boon for the wealthiest Americans. While it’s true the massive corporate tax cut is a centerpiece of the reforms, the law also lowers the top individual rate, maintains the charitable deduction and the preferred rate for capital gains, and rolls back the estate tax. By 2027, 82.8 percent of the bill’s windfall would go to the top 1 percent, according to a Tax Policy Center analysis.
Nevertheless, these hedge fund managers appear upset that they didn’t get a bigger piece of the tax cuts. In a year when Democrats look poised to mount a significant challenge to the Republican-controlled Congress and Republicans are being pushed to pour millions into races once seen as easy wins, this development could prove to be a vulnerability.
The tax bill is at the center of Republicans’ campaign message
Republicans see the tax bill as a “centerpiece” of their messaging strategy for 2018, a spokesperson for the NRCC, the official campaign arm for House Republicans, told the Washington Post. “The law is getting more popular both in public and internal polls. Voters don’t need to take our word for it; they can see the companies announcing bonuses and perks for themselves,” the spokesperson, Matt Gorman, said.
The bill hasn’t been able to bring in too many electoral wins yet. Instead, the tax bill proved to be a failing message in a Trump +20 district in Pennsylvania, and many Republicans are worried that may become a trend across the country.
Washington Rep. Cathy McMorris Rodgers, who leads the House Republican conference, and other GOP leaders argued the country hadn’t yet experienced the “full momentum of tax reform” after Republicans lost the special election in Pennsylvania. But it’s not a good sign that Republican donors also have gripes about the tax overhaul.
The whole saga invites the question: Is the tax bill failing with both Republican donors and voters?