We think of campaigns in terms of people, but they’re often decided by circumstances. The American voters follow their wallets into the voting booth. The bigger the increase in real disposable income from the year before, the more likely voters are to vote for the incumbent party.
Changes in real disposable income correlate with seats gained and lost by the incumbent party going back to 1950. If disposable income when adjusted for inflation goes down, the incumbents lose seats. When it goes up, they gain. This is why the Democrats have fought the tax reform plan, and why they continue to try and paint it as being only for the rich. If real disposable income rises by more than 3 percent, the Republicans will likely keep their majority in the house, and if the growth in disposable income is greater than 6 percent, they will likely keep the Senate.
This is why Trump and the GOP wanted to get this bill done and signed as soon as possible. The IRS will need time to change the tax tables, and getting larger paychecks to employees is the key to the GOP winning the next election.
Categories: Uncategorized