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Businessweek
Businessweek
Business
John McCormick

Slammed Doors Just Part of the Job as Koch Group Sells Tax Cuts

(Bloomberg Businessweek) -- Landon Porter has barely uttered the words “tax reform” before the door slams in his face. He stands on the front steps of the colonial-style home for a second. Then he checks his smartphone, finds the next address, and knocks on another door in this middle-class neighborhood in Fort Wayne, Ind.

Porter, 25, is the grass-roots director of the Indiana branch of Americans for Prosperity (AFP), a conservative public-advocacy group that’s part of the political network built and partly financed by billionaires Charles and David Koch. Although he makes no mention of the Koch brothers in his pitch, Porter’s door-knocking campaign is part of a $20 million effort by Koch-affiliated groups to boost support for the $1.5 trillion in tax cuts Congress approved last year. Republicans have so far struggled to make the party’s signature achievement this cycle a winning campaign issue. Only 39 percent of respondents viewed the tax law favorably in an April Gallup poll.

“We have the unique ability to bring the message about the benefits of tax reform to people’s doorsteps”

For Republicans hoping to stave off Democratic victories in November’s elections, the party will have to do a better job of selling the overhaul to the public. It won’t be easy. Tax policy is notoriously complicated. And if the responses to Porter’s efforts on a recent Saturday are any indication, people are skeptical. “I don’t think my check has changed,” says Linda Meredith, a 52-year-old bartender who was among those visited. Meredith says she supported the tax changes. Then she adds: “They’re going to benefit the rich.”

The bulk of the $20 million the Koch network is spending to promote the tax cut—roughly equal to what it spent on getting it passed—will be for television ads such as those AFP has run in Indiana, Missouri, and North Dakota targeting Democratic senators in states won by President Trump. But a key component will be door-to-door canvass campaigns. People are rarely eager to talk about their finances with a stranger, though as the midterms creep closer, and the odds of Democrats taking back the House of Representatives rise, Republican groups are beginning to mobilize around the tax cuts. “We knew how important it would be to ensure Americans understood what this meant for them and the economy,” says Tim Phillips, AFP’s president. “With our permanent grass-roots infrastructure, we have the unique ability to bring the message about the benefits of tax reform to people’s doorsteps.”

Armed with smartphones or AFP-provided iPad minis, team members use the i360 voter database the Koch network built. A few taps allow them to pull up a detailed map of each neighborhood, showing addresses, names, and ages of voters. On this day, they’re targeting independent and conservative-leaning people. “We’re calling it the American pay raise,” Porter tells Abe Schwab, a self-described independent, as children play noisily in the background. “The child deduction has doubled,” Porter points out eagerly. Schwab, an ethics professor, stops him right there. “It’s far more complicated than that,” he says. Schwab and his wife have three kids, and they earned about $100,000 last year. Under the new law, they’ll lose their personal exemptions—and a new, larger standard deduction won’t cover the loss of that benefit, he says.

Schwab, 41, tells Porter that his rough estimates suggest he’ll see a slight tax increase under the law. In a follow-up interview with Bloomberg, Schwab goes through the numbers in detail—applying its new rates and expanded child tax credits—and finds that the legislation would have actually lowered his 2017 taxes by at least $1,300. Schwab’s experience echoes the results of the April Gallup poll, which found that 56 percent of Americans weren’t sure whether they’d get an increase or decrease, though a recent independent study found that 65 percent will see their 2018 taxes shrink. Still, that doesn’t mean Schwab is sold on the changes. “It’s in my narrowly defined self-interest,” he says. “But within the broader context, I don’t think it’s in the public interest.”

An important target for Porter and his crew is Democratic Senator Joe Donnelly, viewed as one of his party’s most vulnerable senators. Three well-funded Republicans are running in a May 8 primary to win the right to challenge him in November. AFP has already run more than 4,460 TV spots this year in Indiana criticizing Donnelly’s vote against the tax overhaul, according to data from Kantar Media’s CMAG, which tracks political advertising. The group has run 2,465 spots against Senator Claire McCaskill in Missouri and 1,235 criticizing Senator Heidi Heitkamp in North Dakota.

After each visit, AFP workers log answers from voters to three questions: Were they aware of the tax legislation? Do they support it? And do they think Donnelly’s vote against it hurt Hoosiers? At unanswered doors, workers leave literature highlighting Donnelly’s vote against the legislation and urging voters to “tell him to make the tax relief permanent.”

There are occasional hiccups—an intimidating dog and a woman who tells one volunteer that the 91-year-old man who appeared in the voter database, her husband, couldn’t come to the door because he passed away. Ultimately, though, the AFP door-knockers do find some supporters. “More money in my pocket is always a good thing,” says Ryan Waldroup, 38, an electrical engineer. Asked later whether he’s noticed a larger paycheck, he says no. “It went up, but not a significant amount.”

To contact the author of this story: John McCormick in Chicago at jmccormick16@bloomberg.net.

To contact the editor responsible for this story: Matthew Philips at mphilips3@bloomberg.net, John Voskuhl

©2018 Bloomberg L.P.

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