Obama and the Democrats think the promise of higher taxes will be a winner for them this year.
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Obama and the Democrats would have no more luck selling tax hikes to reduce the deficit or pay our creditors. Rasmussen found 71 percent of Americans were unwilling to pay higher taxes to help reduce the national debt. This might be because 62 percent of Americans believed Congress and the president would spend the additional revenue on new government programs rather than reducing the debt. Similarly, the Tax Foundation asked in 2006, when the debt was somewhat smaller, if Americans would be willing to pay the $2,470 required of each individual tax return to eliminate the then $340 billion deficit. Nine percent of tax filers said yes. Seventy-nine percent said no. Only 17 percent said they believed the government would use the money to close the deficit; 63 percent said the government would just increase its spending.
What about other reasons to raise taxes? A mileage tax to pay for highways pushed by Obama’s transportation secretary? Seventy-three percent said no. Faring worse was a Federal Trade Commission recommendation to save (subsidize) our nation’s newspapers by taxing cell phone bills (84 percent no), computers (76 percent no), or websites (74 percent no). Taxes on icky things? The Tax Foundation asked about plans to tax foods with salt (71 percent no), sugary drinks (59 percent no), and junk food (55 percent no).
Asked about Obama’s “Simpson-Bowles” deficit commission, only 30 percent believed any of the promised spending cuts would be realized, while fully 78 percent thought it likely Congress would impose the proposed tax hikes.
And with an upcoming election likely to focus on the economy and job creation, a June 2011 Rasmussen poll showed that most Americans continue to believe tax reductions help the economy. Only one in four thinks otherwise.
How about the mega-question of the size and scope of government? According to a March 2011 Rasmussen poll, 68 percent of Americans prefer a government with fewer services and lower taxes. Only 22 percent want more services and higher taxes. That this is one of the more consistent polling results strongly suggests Reagan Republicans should dominate the political landscape if the GOP ever finds a candidate who can articulate the vision as Reagan did.
So Americans believe lower taxes help the economy, higher taxes hurt the economy, and revenue from tax hikes will be spent on new programs rather debt reduction. They think they are too highly taxed, and they want to reduce the size of government rather than pay more taxes.
|Obamacare Tax Hikes
WHAT ABOUT Obama’s bet that Americans will vote for envy and vote to raise taxes on the rich? The quintessential tax on rich people is the death tax, or estate tax. In 2008, the Tax Foundation asked, “Do you personally favor or oppose completely eliminating the estate tax—that is, the tax on property left by people who die?” Sixty-eight percent favored abolition, and only 19 percent opposed it. This level of support for ending a tax paid by perhaps 2 percent of citizens, and rich ones at that, has remained consistently high and suggests Americans are not driven by envy as Obama hopes.
And the fairness of the progressive income tax? Sixty-nine percent of likely voters believe that if someone earns twice as much, they should pay twice as much in taxes—the definition of a flat rate income tax. Only 13 percent believe they should pay more than twice as much, the hallmark of a progressive tax structure.
How much should the rich actually pay? Today’s top rate for personal income taxes is 35 percent. Obama plans to watch that jump to about 44 percent in January 2013 (including the Obamacare surtax). And Obama’s stated goal is a new 30 percent Alternative Minimum Tax that will (for the short term anyway) only hit those earning a million dollars a year.
Asking, “What is the maximum percentage of a person’s income that should go to taxes—that is all taxes, state, federal and local?” Rasmussen found in April 2011 that 74 percent of Americans believed no one should have to pay more than 20 percent of his income in taxes. This is consistent with historical polls by the Tax Foundation, which found in 2009 that 24 percent of Americans believed that figure should be less than 10 percent, while 42 percent wanted the burden between 10 and 20 percent, and 22 percent were OK with a burden between 20 and 29 percent. (For the record, 1 percent thought the max tax should be zero.)
Remember that this question was for all taxes combined. Today, Americans pay 28 percent of their personal incomes in federal, state, and local taxes.
There is a danger for Republicans in the polling data. Fully 64 percent of Americans believe the middle class pays a larger share of its income in taxes than wealthy Americans do. Pew Foundation polling found that 57 percent of Americans “are bothered by what they believe are unfairly low amounts paid by the wealthy.”
There are two answers to this concern.
The most obvious one is to highlight the facts. In 2007, the most recent year with full data available, the top 1 percent of American earners paid 39.5 percent of all federal individual income taxes. The top 5 percent paid 61 percent, the top 10 percent paid 72.7 percent, and the top 20 percent paid 86 percent. The top 40 percent of income earners paid 98.7 percent of all federal personal income taxes. The bottom 40 percent received IRS checks from the government greater than any income tax paid. The tax system paid them.