John Loudon, VP of Public Affairs at ETS participated on an expert panel on tax reform 2.0 to the 2018 Mick Real Estate Symposium conference in Scottsdale including over 100 industry leading firms. Loudon shared several views including that the portion of the new bill dealing with loosening of 401k rules had the best chance of passing this year but that passage of other portions through the Senate is unlikely this year. He then explained that if Democrats took control of the House no tax reform would pass but gave his prediction that the GOP would hold the House. Loudon based this view on data he analyzed regarding midterm elections. While the average Midterm loss experienced by all Presidents is around 30 House seats, in the last 40 years Republicans lose an average of 18.5 seats to the Democrats 62.5 seats.
Loudon observed that voters only react strongly against sitting Presidents when the economy is bad and/or, when Democrat Presidents initiate hard left turn policies. Obama lost 76 seats (the second worst performance in history to FDR’s 117 seat loss) and Clinton lost 49. The worst Republican midterm loss in the last 40 years was George W. Bush who lost a net of 22 over 2 midterms losing 30 in 2006 during a tumbling economy.
What all this means is that Loudon predicts that considering the strong Trump economy, the GOP will retain control of the House, if even narrowly and will push hard for the rest of tax reform 2.0 in 2019.
