As Tax Bill Approaches, Public Opinion is MixedJanuary 2018 / Share
At several times throughout the final weeks of 2017, President Donald Trump implored reporters that American taxpayers would be receiving a special Christmas gift in the form of an expansive tax reform package. By mid–December, it appeared as though President Trump was correct in his timing of the plan as members of Congress planned a vote on the final version of the bill less than one week from the holiday. However, according to public opinion polls and insights from U.S. business leaders, exactly how big of a gift the bill will be remains an open question.
As reported by Politifact and other news outlets, several polls released in the beginning of December appear to show that for the most part, Americans were unenthusiastic of the Tax Cuts and Jobs Act as they were familiar with it.
- A Marist Poll of 1,267 adults found that just 25 percent of Americans approved of how Republican lawmakers "are handling" the tax reform bill, while 63 percent said they did not approve of its handling.
- Another poll conducted by Quinnipiac University found 55 percent disapproved "of the Republican tax plan," and 43 percent even said "they are less likely to vote for a U.S. Senator or Congressperson who supports the plan."
- A third poll around the same time from Reuters/Ipsos concluded that among those who were aware of the plan at all, 49 percent said they were opposed to it compared to 31 percent who said they supported it.
While these findings were significant for lawmakers, there was no consensus on how reliable such public polling methods could be considering their timing. In the days preceding these polls, the contents of the tax reform bill itself changed considerably, and could indeed continue changing before being signed into law. The speed with which the law has been pushed through Congress, combined with the complexity of its provisions, ultimately equate to confusion with most members of the public.
Speaker of the House Paul Ryan argued that this timing of the bill and these polls made him and other Republican lawmakers confident nonetheless in their decision to vote for the tax reform package. In an interview with Milwaukee radio station WISN Dec. 13, Ryan pointed out that Ronald Reagan's landmark tax reform legislation was also broadly unpopular when it was signed into law in 1986. Using available polling data from 1986, Politifact concluded Ryan was correct that at least one poll at the time found weak public support for Reagan's tax bill. However, two other contemporary polls found approval for the 1986 legislation to be higher than the 2017 bill, and also reported much lower rates of disapproval for the Reagan plan compared to the current one.
Some of the biggest proposed changes to tax law included in the new bill concerned business spending and corporate income. As it stands now, the bill would reduce the top corporate tax rate from 35 percent to 21 percent, as well as cut tax spending for several other types of businesses. These proposals, which have been a cornerstone of the bill since its conception, have elicited a favorable response from the business community in some ways. The U.S. stock market is on track to post one of its best years ever, with major indexes like the S&P 500 continuing to hit record highs as the tax reform bill inches closer to becoming law. One analyst for J.P. Morgan even estimated that U.S. markets could grow by an additional 5 percent over their end–of–November valuations if the bill passed.
Of course, stock market enthusiasm does not necessarily translate to high praise within the entire corporate community. New York Times business columnist Andrew Ross Sorkin describes his experience at a year–end event for business executives , who were polled on their feelings toward the tax bill, as "eye–opening." According to the informal survey taken of conference attendees, mostly high–level executives:
- Fifty–five percent said they felt the proposed tax bill should be signed into law.
- However, attendees were split on certain outcomes of the bill — 72 percent said it was "wrong" for the package to increase the national debt (as it is expected to do), while 62 percent said they were "concerned that the tax proposal will negatively impact the nation's health care system."
- Only 14 percent of those surveyed said they would make "large, immediate domestic capital investments if the bill passes." Republican lawmakers have said businesses would in fact increase capital investment activity as a result of lower corporate tax rates.
Most analyses of the tax plan that may soon become law have shown that it will benefit most Americans in the short term through lower tax bills. Beyond that, much of its effects remain uncertain, and could stay that way for the next few years.
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The information provided is presented for general informational purposes only and does not constitute tax, legal, business or investment advice.