October 18, 2018

Lower Corporate Taxes, Higher Wages? Voters Are Skeptical

“There’s this widespread disbelief among Republicans, as there is among Democrats and independents, that tax cuts for employers will redound to their pockets books,” said Jon Cohen, vice president of survey research for SurveyMonkey.

Americans’ views of the tax plan in general are more divided. The Times survey, which was conducted in early November, found that 52 percent of respondents said they disapproved of the plan, compared with 44 percent who said they supported it. (The survey did not distinguish between the House and Senate versions of the plan.) That is generally in line with other polls, although some have put support for the plan significantly lower.

In general, opinions of the Republican plan split predictably along partisan lines. More than 80 percent of Republicans said they supported the plan, and more than 80 percent of Democrats said they opposed it. Most Republicans likewise said they believed that they would benefit personally from the plan, while few Democrats believed the same.

The strong overall support for the bill among Republicans masks significant disagreement beneath the surface, however. The survey showed that support for the plan was much stronger among Republicans who considered themselves “very conservative” than those who considered themselves conservative or moderate. And many moderate Republicans and independents said they were less interested in cutting taxes than in reducing the federal budget deficit, a potential trouble spot for a bill that most analyses suggest could add $1 trillion or more to the deficit.

Republicans still have time to win over skeptics. Only about a quarter of respondents to the Times survey said they were paying close attention to the tax plan. But in a potential sign of trouble for the bill, people who said they were watching the process closely were more likely to oppose it — and to oppose it strongly — than those paying less attention.

“A lot of voters still have only weak views, but the people who have formed strong opinions already are quite negative,” said Guy Molyneux, a partner at Hart Research, a Democratic polling firm.


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Mr. Molyneux said there were elements of the plan, such as doubling the standard deduction and increasing the child tax credit, that generally polled well with voters in various surveys. But other elements of the plan could face more opposition. Various analyses have found that both the House and Senate bills would raise taxes on millions of middle-class families, and the House plan, in particular, would eliminate many popular deductions and credits.

Cutting corporate taxes could be a particularly tough sell for many voters. Polls have repeatedly found that Americans think corporations, and especially big corporations, already pay too little in taxes. Douglas Holtz-Eakin, a prominent conservative economist who supports overhauling the corporate tax system, said it is easy to convince voters that they should support tax cuts for middle-class families. The case for cutting corporate tax rates is harder to explain.

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“If you have a complicated argument like that, you have to lay the groundwork months, years in advance,” Mr. Holtz-Eakin said. That work hasn’t been done in this case, he added.

The complexity of the argument for corporate taxes may help explain why backers of the Republican plan have leaned into a simple formulation of their argument case: Lower business taxes mean higher wages. But Vanessa Williamson, a researcher at the Brookings Institution who has studied public opinion on taxation, said voters were likely to be skeptical of that argument.

In general, Ms. Williamson said, voters tend to fall back on their partisan positions when forming opinions on complex subjects such as taxation. But they might depart from those partisan views when they directly contradict their own experience. Experience, Ms. Williamson said, might lead Americans to doubt that their employers will respond to lower taxes by raising pay.

“Once you get to people’s actual paychecks, you’re confronting them with a question where they actually have personal information,” Ms. Williamson said.

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Article source: https://www.nytimes.com/2017/11/14/business/economy/taxes-polls.html?partner=rss&emc=rss

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