Nine in 10 Americans saw bigger paychecks this year thanks to the Tax Cuts and Jobs Act, but last year’s tax cuts may have cost the Republican Party their last stronghold in California.
Orange County, the bedrock of California’s Republican Party and original supporter of the groundbreaking anti-tax law, Proposition 13, flipped entirely blue this year. The Orange Curtain fell, and all seven House seats representing Orange County now belong to Democrats.
Trump’s tone and tenor deserve some of the blame, as the well-manicured mothers of Newport Beach and successful immigrants of Irvine alike don’t take well to the president’s tendency to rage so publicly. However, the voting data points to a possible and greater truth: many in Orange County didn’t care quite as much about the orange man as they did the color green.
Included in last year’s tax reform law were a $10,000 cap on the state and local tax deduction and a cap on the mortgage interest deduction. It’s these stipulations that may have cost the GOP the entirety of Orange County.
Prior to tax reform, California’s wealthy paid just 60 percent of tax revenue collected for the state’s top marginal tax rate, 13.3 percent. Through SALT deductions, the federal government essentially paid for 40 percent of California’s ridiculous tax tiers, pushing the burden of fiscal irresponsibility onto Americans across the country. Given that 40 percent of Orange County residents claim the SALT deduction, enough residents were hurt by the tax bill to flip the county.
Similarly, tax reform capped the mortgage interest deduction at $750,000. The overall median home price in the county is more than $777,000, and 16 zip codes in the county have median home prices higher than $1 million.
Interestingly enough, Republican gubernatorial candidate John Cox still, albeit very narrowly, won Orange County. It’s not as though Orange County underwent an “awokening” overnight, but many merely followed their wallets to the polls. Sending Democrats to Washington but a Republican to Sacramento would hypothetically result in lower taxes.
It’s true that some Republicans, such as Rep. Dana Rohrabacher, had simply become so toxic that any moderate opponent with decent fundraising could flip a district. It’s also true that region’s relative social liberalism and vast immigrant community does not align well with current GOP leadership.
But to fully flip the county, California’s wealthy had to enact their revenge and send a clear signal to Washington that they want their subsidies back.
