Tax Cut Poll and Analysis

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Tax Cut Poll and Analysis

• Prepared By
• Penn, Schoen Berland Associates, Inc.
• March 7, 2001

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Background and Conclusions

• While most voters support Bush when they hear the
  specifics of the tax cut (most voters generally
  support any kind of tax cut), Bush loses on
  larger issues.
• Americans want a government that is in order
  fiscally and is promoting economic growth.
• But the Bush tax cut steps over the line on these
  two fundamental elements.
• It reverses a successful formula that has kept
  interest rates low and economic growth high
•  
• To the extent Bush goes too far and acts
  unilaterally to pass a nearly 2 trillion tax
  cut, he takes on his shoulders at that moment
  responsibility for the economic performance of
  the nation.

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Key Findings

• The top priorities for the budget surplus are
  paying down the debt, strengthening Social
  Security and Medicare, and investing in
  education, training and technology.
• Tax cuts fall behind all of these.
• Most Americans do believe we have a budget
  surplus, but think the surplus will not be as
  large as it is estimated.
• While the Bush tax cut plan draws support, it is
  vulnerable to the charge that it benefits the
  haves over the have-nots, especially on the
  estate tax elimination.

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Key Findings

• A different approach to tax cutting has
  substantial appeal over the Bush approach.
  
• A majority of Americans would prefer to reduce
  the estate tax so it applies only to the wealthy,
  rather than eliminating it.
• Voters want a more fiscally responsible approach
  to tax-cutting
• Over two-thirds support a trigger that stops the
  cut if the projected surpluses dont occur.
• Three-fourths think we should pass part of the
  cut now, and part later.
• A majority prefer payroll tax cuts to across the
  board tax cuts.

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Tax Cuts Remain Low in Importance to Voters

• Cutting taxes is popular (few would turn down a
  tax cut) but falls in importance when compared to
  several other key issues.
• Education remains the most important issue facing
  the country at 21.

Which of the following issues is the most
important issue facing the country?
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Voters Find Cutting Taxes a Low Priority for the
Estimated 5.6 Billion Budget Surplus

• The top choice priority was set aside money to
  strengthen Social Security and Medicare, (29),
  followed closely by paying down the national
  debt (28), with tax cuts third at 21
• When the top two choices are combined, tax cuts
  dropped to the bottom.

There is a debate in Washington over what to do
with a projected budget surplus that could add up
to 5.6 trillion over the next decade. What
should be the main/ 2nd priority for the budget
surplus?
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Key Voting Group Data Underscores the Importance
of Using the Surplus to meet Americas Key Issue
Priorities

• Among those who invest in the stock market, those
  who are more likely to pay more in taxes, they
  support paying down the debt and strengthening
  Social Security and Medicare more than tax cuts.
  
• Among the middle class, the target of Bushs
  rhetoric, the same dynamic holds truethe tax cut
  is the least priority.

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Voters Doubt the Foundation on Which the Bush Tax
Cut is Based

• The very foundation on which President Bush has
  built his tax cuta federal budget surplus of at
  least 5.6 trillionis far from being taken as a
  given by the American public

Do you think the actual surplus will be?
SUPPORT BUSH TAX PLAN
ALL
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Tax Cuts and the Recession Argument

• Only a quarter (26) primarily agree with one of
  the administrations top rationales for a tax
  cutthat it is needed to stimulate the economy
  and prevent a recession.

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Tax Cuts and the Recession Argument

• A narrow majority of voters believe we do need a
  tax cut to prevent a recession
• Many key swing groups are evenly divided on this
  issue

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The Politics Behind the Bush Tax Cut
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Two-Thirds Support Bushs Tax Plan
President Bushs tax cut would repeal the estate
and gift tax, reduce the marriage penalty, and
raise the child tax credit from 500 to 1,000
for many families with kids. It would also lower
income tax rates for most tax brackets. The tax
reductions would total 1.6 trillion over ten
years. Given this do you strongly support,
somewhat support, somewhat oppose or strongly
oppose President George W. Bushs tax cut plan?
These two concerns are essentially the same
that there will not be enough money left.
Combined, this trumps the wealthiest argument
43 to 24
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Reasons to Oppose Bush Tax Plan
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A Majority of Americans Find the Bush Plan Unfair

• A majority (54) think the tax cut plan will
  benefit the upper class the most, while only a
  quarter think it will benefit the middle class.
• However, only 14 describe themselves as upper
  class, 46 middle class.
• Therefore, most recognize that the plan will not
  benefit them and see through the claim that
  Bushs tax cut is a middle class tax cut.

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Fiscally Responsible Alternatives
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Voters Do Not Think Estate Tax Should Be
Eliminated Completely

• When given more information on the estate tax, a
  majority (56) support exempting small family
  farms and small businesses over eliminating it
  completely (23)

A key feature of President Bushs tax cut
proposal is the elimination of the estate tax.
The estate tax is now levied against estates of
more than 600,000. That exemption will soon
rise to 1 million. Only the top two percent of
estates are now subject to the tax. Which is
closer to your view?
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Voters Support Fiscally Responsible Alternative
Approaches to Tax Cuts

• In light of their concerns over the proposed tax
  cut, Americans show a solid level of support for
  alternative ideas to tax cuts that are fiscally
  responsible.

Some people say there ought to be a trigger on
the tax cut that stops the tax cut if the
surpluses dont actually occur. Do you support or
oppose this?
The actual estimated cost to the government of
the Bush tax cut, including additional interest
payments, is 2 trillion over ten years. Given
this, which is closer to your view?
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Payroll Tax Cut

• A majority support giving middle and working
  class Americans more money to take home each week
  by cutting payroll taxesan idea that cuts across
  class lines.

Eight in ten Americans pay more in payroll taxes
for Social Security and Medicare than they pay in
income taxes. Given this, which would you prefer?
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A New Democratic Tax Proposal

• Combining the principles of fiscal responsibility
  and economic fairness into one tax cut package,
  we tested an alternative tax cut package to
  President Bushs.
• The proposal includes
• A work tax credit of 300 for every full-time
  worker
• Doubles the 500 child tax credit to 1,000 and
  makes it refundable so low-income families with
  no federal income tax liability would get a
  refund.
• Creates a 1 trillion revenue reserve fund that
  would guarantee progress towards paying down the
  national debt, and act as a hedge against an
  unexpected economic downturn or revenue short
  fall.

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Voters Prefer New Dem Plan to Bush Plan

• Two-thirds (65) of registered voters support the
  New Democratic plan.
• 64 of Bush tax cut supporters support the New
  Democratic plan.
• A majority (51) prefer it to the Bush plan

Do you strongly support, somewhat support,
somewhat oppose, or strongly oppose this proposal?
Which plan would you prefer?
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