When it comes to tax issues, the long-held assumption is that Americans simply want to bear the smallest financial burden for the largest amount of government services. But a new study finds that isn't the case, and that when American voters are put in the position of policy maker, they have very different opinions on taxes than most of us would think.
I recently spoke to Dr. Steven Kull, a Senior Research Scholar and director of The University of Maryland's Program for Public Consultation at the School of Public Policy. A political psychologist, Kull has conducted in-depth studies of public opinion on public policy issues for over two decades.
For this study, the school recruited 1,800 registered voters and gave them an online tool that let them design their own budget for the U.S. Throughout the process, participants were shown the effect each decision they made would have on the projected U.S. budget deficit. By doing this, researchers hoped to get beyond the kinds of visceral responses we typically see in policy-related surveys by putting everyday Americans into the shoes of policymakers to see how they'd approach tax policy when they see the ramifications of their decisions.
The results were staggering.
A majority of respondents made tax rate changes that would result in an average revenue increase of $112.2 billion per year.
"If you look at standard polling, you get a very different impression of the American public, where you get an off-the-cuff response that makes it seem like Americans just want everything without paying taxes, and that's the fault of the way those questions are asked," Kull said. "But if you put Americans in the shoes of a policy maker, where they see the same kind of information a policy maker has and see how the tradeoffs work, then people act in a way that is very different than what you see in surveys."
So, how, exactly, would ordinary Americans create those massive revenue increases? The study found that 52 percent of respondents are willing to raise taxes by 10 percent for those making $1 million or more, while a slight majority raised taxes on incomes starting at $100,000 by 5 percent. Of course, the knee-jerk reaction is to assume that people are happy to raise taxes on income brackets that they aren't in, but Kull says that isn't the case.
"We checked for the relationship between the income levels of the test subjects and what income levels they wanted to raise taxes on, and people with incomes over $100,000 a year were just as willing to raise taxes for that income level as people who made less than that," he said. "So when people did this exercise, they really put on their problem solver hats rather than working in their own self-interest."
Some of the other avenues respondents explored to make up the deficit were directed at heavy earners, most notably corporations and wealthy individuals who would benefit from the elimination of the estate tax.
President Trump wants to cut capital gains and dividends to a rate that is half that of ordinary salary and wages, with a maximum rate of 16.5 percent. Just 15 percent of respondents endorsed this idea. Meanwhile, 63 percent favored raising the income tax rate from 23.8 percent to 28 percent for high-income earners (those with incomes of $430,000 or more).
On corporate taxes, 53 percent of respondents favored raising the effective corporate tax rate (which is currently 19.2 percent) to 20.2 percent.
Despite all of the data, there are still officials being elected to Congress and the White House on the promise of lower taxes. I asked Kull to reconcile that against his study's results.
"What this shows us is that the public is really responsive to reasoning. You can't take this data and force a member of Congress to change their vote, but this data shows that the public can be reasoned with and take on big issues," he concluded. "The large majority of Americans can see both sides of the issue, and they try to find the right balance. So I think what comes of this study more than anything else is to show that this can be a very valuable way of interacting with the public."
Whether politicians will come around to this type of communication remains to be seen, but it looks like the American public is ready for some elevated discourse.