GALLUP NEWS SERVICE
PRINCETON, NJ -- At first glance, it appears that Americans are overwhelmingly in favor of tax cuts -- 74% of Americans favor "a cut in federal income taxes," according to a Gallup poll conducted in September of last year. For the past 25 years, in fact, over 70% of the public has favored a generic tax cut. The highest level of support for tax cuts came in 1994, when 80% of Americans favored it. At the same time, when Americans are presented with the tough choice of tax cuts versus spending cuts, they become more ambivalent. When the maintenance of such high profile programs as Social Security and Medicare are presented as alternatives to tax cuts, support for tax cuts drops significantly. Additionally, there are mixed opinions among Americans on the choice of targeted versus across-the-board tax cuts, and recent surveys confirm that tax cuts are not a high priority for Americans in 2001.
There is no question that the issue of tax cuts will be important this year. One of the centerpieces of last year's presidential campaign was a debate between George W. Bush and Al Gore about what should be done with the federal budget surplus. Bush's campaign touted a $1.3 trillion tax cut that would reduce the tax rate of all taxpayers, regardless of their income. Gore proposed a battery of smaller, more targeted tax cuts that would benefit individuals and families with specific needs, such as college tuition and child care expenses. Both candidates claimed they would use much of the surplus to strengthen Social Security. The scope and specifics of tax cuts were a salient campaign issue and will be a challenge for the Bush administration -- the public has an appetite for federal tax cuts, but still supports specific spending measures.
Americans Perceive Excessive Taxes
To begin with, it is important to note that about six in 10
Americans (63%) consider the amount of federal income tax they pay
to be too much, 33% think it is about right and almost no one (1%)
thinks they are paying too little (April 7-9 2000). Americans'
perceived tax burden has fluctuated somewhat over the years -- in
the early 1960s, Americans were evenly split between those who
thought they were paying too much in taxes and those who thought
the tax burden was about right. The highest percentages of people
who said their federal tax burden was too much came in 1969, when
almost 70% of Americans thought the amount was excessive, and then
again in 1999, when 68% of the public said they were paying too
much.
Tax Cuts Under the Bush Administration
Congress began debating Bush's $1.3 trillion tax cut this week.
Phil Gramm (R-Texas) and Zell Miller (D-Georgia) introduced an
across-the-board tax cut to the Senate on Monday, hoping to begin
the new congressional session on a bipartisan note. The House
Republican leadership plans to follow course in the next couple of
days.
Although the public has not been asked specifically about the Gramm/Zeller bill, a CNN/USA Today/Gallup poll conducted January 5-7, 2001, showed that over half -- 52% -- of Americans favor Bush's tax plan, based on what they have read or heard. However, the public is generally pessimistic about the new administration's ability to actually pass the tax cut -- only 38% of Americans think Bush will be able to pass such legislation (50% do not and 12% have no opinion on the matter).
While most Americans favor the Bush tax cuts, the public does not think tax cuts should be among the highest priorities for the Bush administration. Americans think the new president ought to give education, prosperity and Social Security first billing.
How important is it that the Bush administration does each of the following? Is it a top priority, high priority, low priority, or not a priority at all? [RANDOM ORDER]
TOP/HIGH PRIORITY SUMMARY TABLE
Top |
High |
Top/high |
|
% |
% |
% |
|
Improving education |
50 |
44 |
94 |
Keeping America prosperous |
43 |
48 |
91 |
Ensuring the long-term strength of the Social Security system |
46 |
43 |
89 |
Helping senior citizens pay for prescription drugs |
42 |
46 |
88 |
Keeping the federal budget balanced |
40 |
48 |
88 |
Ensuring the long-term strength of the Medicare system |
40 |
48 |
88 |
Improving the healthcare system |
43 |
44 |
87 |
Providing military security for the country |
39 |
46 |
85 |
Improving conditions for minorities and the poor |
30 |
50 |
80 |
Reducing the use of illegal drugs in America |
36 |
42 |
78 |
Improving the quality of the environment |
30 |
48 |
78 |
Improving race relations |
28 |
47 |
75 |
Cutting federal income taxes |
26 |
39 |
65 |
Improving the way political campaigns are financed |
25 |
35 |
60 |
Americans Split Over Broad v. Targeted Tax
Cuts
Tax cuts generally come in two forms: across-the-board cuts –
those that would reduce the rate of all taxpayers, regardless of
how much money they make -- and targeted tax cuts – those
that tend to give tax cuts to people either in specific income
groups or with specific needs. Depending on how the question is
worded, the percentage of Americans who support each type of tax
cut varies considerably. When presented with a choice between
across-the-board cuts and targeted cuts to fix certain problems,
Americans are split down the middle -- 41% favor across-the-board
cuts, 44% favor targeted cuts (10% favored no tax cuts at all).
However, when the question specifies the beneficiaries of the
targeted cuts -- those making less than $70,000/year -- a majority
(51%) favor the targeted cuts and about a third (33%) favor the
across-the-board cuts (14% favored no tax cuts at all).
Interestingly, even those people making more than $75,000/year
– and thus would not benefit from the proposed cut -- were
slightly more likely to favor the targeted cut (48%) than the
across-the-board cut (41%).
NEXT TWO QUESTIONS SPLIT SAMPLE
Which of the following would you prefer to see Congress pass next year -- [ROTATED: broad, across-the-board tax cuts (or) targeted tax cuts to alleviate specific problems (or) no tax cuts at all]?
[BASED ON -- 506 -- NATIONAL ADULTS IN FORM A; ± 5 PCT. PTS.]
Broad, across-the-board |
Alleviate specific problems |
|
MIXED/ |
No |
|
2000 Sep 11-13 |
41% |
44 |
10 |
1 |
4 |
Which of the following would you prefer to see Congress pass next year -- [ROTATED: broad, across-the-board tax cuts (or) targeted tax cuts benefiting mostly those making less than $70,000 a year (or) no tax cuts at all]?
[BASED ON -- 502 -- NATIONAL ADULTS IN FORM B; ± 5 PCT. PTS.]
|
Those making |
|
|
|
|
2000 Sep 11-13 |
33% |
51 |
14 |
* |
2 |
The support for targeted tax cuts appears either to have strengthened during the presidential campaign -- a reasonable possibility given Al Gore's championing of such cuts -- or Americans are particularly sensitive to whether a tax cut will benefit certaingroupsor fix certainproblems. In the questions above, respondents were forced to choose between a broad cut and a cut to "alleviate certain problems." In a March 1999 poll, a majority of Americans -- 72% -- said they would prefer an across-the-board tax cut for all Americans, rather than targeted cuts for certain groups and for specific situations. Although the differences in question wording are subtle, it appears that the public is more apt to support tax plans that focus on problems, rather than groups of people.
If there are going to be tax cuts, which would you prefer [ROTATE 1-2]:
1999 Mar 5-7 |
|
An across-the-board income tax cut for all Americans (or) |
72% |
Targeted tax cuts for certain groups and for specific situations |
26 |
No opinion |
2 |
100% |
Social Security, Medicare and Paying Off the National Debt
Trump Tax Cuts as Priorities for Public
Although Americans disdain government programs in the abstract, the
two largest government programs --Social Security and Medicare --
are top fiscal priorities for the public. When Americans are
presented with a choice between spending more on "government
programs" or more on tax cuts, a majority prefers to spend more on
tax cuts. However, when asked specifically about spending money on
Social Security or Medicare, a strong majority favors spending
money on these programs instead of tax cuts. According to a variety
of survey data collected over the past two years, the public has a
hierarchy of fiscal priorities when it comes to the budget, with
Social Security and Medicare at the top and paying off the national
debt a close second.
An experiment embedded in a Gallup poll conducted July 16-19, 1999, illustrates the differing levels of public support for government programs in the abstract and specific government programs. A randomly selected half of the sample was asked whether they would prefer some of the surplus money to be used on tax cuts or increased spending on education, defense and Medicare. The other half was asked whether they would like tax cuts or increased spending on government programs. Majorities favored spending money on education, defense and Medicare rather than tax cuts, but majorities also favored spending money on tax cuts rather than government programs.
The specific question wording for form A:
As you may know, the federal government is currently running a budget surplus, meaning that it is taking in more money than it spends. President Clinton and Republicans in Congress both plan to use much of the surplus money for Social Security, but they disagree over what to do with the rest. How would you prefer the REST of the budget surplus used?
(based on form A: n = 513; margin of sampling error = +/- 5 percent)
To increase spending on education, defense, Medicare and other programs (or) 61%
To cut taxes (or) 33
Neither /other 5
The specific question wording for form B:
As you may know, the federal government is currently running a budget surplus, meaning that it is taking in more money than it spends. President Clinton and Republicans in Congress both plan to use much of the surplus money for Social Security, but they disagree over what to do with the rest. How would you prefer the REST of the budget surplus used?
(based on form B: n = 518; margin of sampling error = +/- 5 percent)
To increase spending on other government programs (or) 28%
To cut taxes (or) 64
Neither/other 07
No opinion 01
Other survey data show a similar pattern. According to a Washington Post poll conducted October 12-19, 2000, a minority of Americans (20%) preferred spending the budget surplus on tax cuts, when given a choice among tax cuts, strengthening Social Security and Medicare, and reducing the national debt. A plurality (44%) of Americans said they would like to see the surplus spent on Social Security and Medicare, 24% preferred that the extra money be spent on debt reduction. In a Pew Research Center poll conducted February 9-14, 2000, tax cuts were at the bottom of the list of what Americans would like to do with the surplus -- just 12% of Americans said they would like the extra money used on tax cuts, 44% wanted the money used for Social Security and Medicare, 18% wanted the funds directed towards paying down the national debt and 24% favored spending the money on domestic programs such as health, education and the environment. An NBC News/Wall Street Journal Poll, conducted October 13-15, 2000, found that most registered voters (53%) preferred a presidential candidate whose first priority was paying down the debt, rather than one whose first priority was cutting taxes (39%).
The public's preference for spending over tax cutting may be a function of the strong economy America has been enjoying. It may be that the public sees the budget surplus as an opportunity to fix existing problems. In an August 1999 poll, Gallup asked Americans whether the government ought to cut taxes even if it means putting off some important things that need to be done -- just 21% of the public agreed that cutting taxes should take precedence; 58% disagreed. When asked the same question in 1979 -- a very weak economic period -- 62% of Americans thought tax cuts should take priority, whatever the cost, and only 12% disagreed.
Inheritance Taxes
Another high priority for Bush will be to eliminate the estate tax.
Although the Republican leadership has been quite vocal about the
importance of eliminating this tax, most Americans do not have
strong feelings about the estate tax either way. When asked whether
the federal inheritance tax was too high, about right, or too low,
a majority of Americans (53%) said they did not know enough about
it to say (June 22-26, 2000). On the other hand, when the details
of the inheritance tax are explained to them in the question, 60%
of Americans favored eliminating it. It appears that this support
is principled, rather than self-interested, because only 17% of
respondents thought they would personally benefit from such a tax
cut. (Experts estimate that around 2% of the American public would
benefit from an elimination of the estate tax.)
As you may know, federal inheritance taxes currently apply to estates valued at more than $1 million. A new proposal would eliminate all inheritance taxes on estates over $1 million as well. Would you favor or oppose that proposal?
|
Favor |
Oppose |
No opinion |
|
|
|
|
2000 Jun 22-25 |
60% |
35 |
5 |
If such a proposal were passed into law, do you think you would or would not personally benefit from such a law in the future, or don't you know enough to say?
|
Would personally benefit |
Would not personally benefit |
Don't know enough to say |
No |
|
|
|
|
|
2000 Jun 22-25 |
17% |
43 |
39 |
Survey Methods
The results below are based on telephone interviews with a
randomly selected national sample of 1,055 adults, 18 years and
older, conducted January 15-16, 2001. For results based on this
sample, one can say with 95 percent confidence that the maximum
error attributable to sampling and other random effects is plus or
minus 3 percentage points. In addition to sampling error, question
wording and practical difficulties in conducting surveys can
introduce error or bias into the findings of public opinion
polls.
Based on what you have read or heard, do you favor or oppose the federal income tax cuts George W. Bush has proposed?
Favor |
Oppose |
No opinion |
|
|
|
|
|
2001 Jan 5-7 |
52% |
33 |
15 |
Do you think Bush will or will not be able to pass the federal income tax cuts that he has proposed?
Will |
Will not |
No opinion |
|
|
|
|
|
2001 Jan 5-7 |
38% |
50 |
12 |
*Less than 0.5%