There’s a lot we still don’t know about the tax bill currently germinating in the meeting rooms of Congress and the West Wing. We don’t know how aggressively it will cut tax rates, how much it might add to the federal budget deficit, or how tilted it will be to business or individual tax cuts. We don’t know what tax breaks it will attempt to cap or eliminate.
Because we don’t know those things, we can’t say for certain which groups of Americans will benefit most from the bill, should it become law. We can only speculate.
We know that President Donald Trump is optimistic. “My administration is working with Congress to develop a plan that will deliver more jobs, higher pay, lower taxes for businesses of all sizes and middle-class families all across the nation,” he said this month in North Dakota. “So it’s not only business taxes, it’s middle-income families, it’s families at every level — every level, tax cuts.”
But when we ask the general public to speculate — to guess how such a bill might affect them personally — we find a deep pessimism, which declines, somewhat, among Republicans, Trump supporters, and the very rich.
These are the latest results from the Vox/SurveyMonkey Economic Confidence Index, which surveyed 7,600 Americans in early September on a variety of measures of faith in the economy — and, additionally, about Americans’ hopes that a tax reform bill might lower their own tax bills next year.
The overall index registered at 56 for September, down 2 points from August, on a confidence scale of 100. It is now back to the same level as it registered in January, when President Trump took office. Approval of Trump remains the most significant driver of high confidence in the survey.
The subgroup with the highest confidence in the survey is Americans who approve of Trump and earn more than $50,000 a year — they register a 79 on the index. In contrast, the confidence score for Americans who disapprove of Trump and earn less than $50,000 a year is 40.
Most Americans don’t think tax reform will help them
The September results suggest Americans don’t have much faith that Trump and Congress will agree on a tax bill in short order: Fewer than one in five respondents said it’s extremely or very likely that tax reform legislation will pass this year. One in three said it was “somewhat likely” to pass.
Americans appear even more skeptical of the idea that any legislation is on its way that would reduce their own tax bill next year. Only 15 percent of respondents said they expect their federal taxes to be lower next year. Forty-three percent said they expect them to be the same, and 39 percent said they expect them to be higher.
Three groups stand out as more bullish than the country as a whole: Republicans, Trump supporters, and Americans who earn more than $150,000 a year. In each case, about a quarter of those groups expect their taxes to be lower next year, a quarter expect them to be higher, and half expect no change.
We see the reverse with Democrats, the very poor, and people who disapprove of Trump: In each group, about half the respondents expect their taxes to be higher next year.
In some ways, those views match up with what we can speculate might be the effects of a big tax bill. Both Trump and congressional Republicans, for example, have in the past supported tax plans that independent analysts found would overwhelmingly benefits high-income earners. Trump’s final campaign-trail proposal included some changes in deductions, meant to help the middle class, that some analysts projected would raise taxes on millions of middle-class families with children.
Still, Trump has vowed to cut taxes across the board, and the plans he has put forth have routinely been projected to reduce taxes for the poor and the middle class as a whole (though not by nearly as much as the reduction for the rich).
Recent tax-reform talk, on Capitol Hill and elsewhere, hasn’t dealt much with those middle-class cuts — or any individual tax cuts, for that matter. It has focused largely on reducing the rate paid by businesses. That includes both traditional corporations and so-called passthrough entities, like many of Trump’s companies, that organize themselves in such a way that they currently pay taxes on their profits at the individual rate. Republicans have pitched those rate cuts as essential to global competitiveness and increased economic growth.
They do not appear to have swayed the public, though — at least not outside of GOP circles. The public at large opposes cutting tax rates for American corporations, 49 percent to 46 percent, according to the September survey.
Three-quarters of Republicans support corporate rate cuts. But three-quarters of Democrats oppose them — and so do more than half of independents.