Whether or not Americans view tax cuts as helpful or not is overwhelmingly tied to what side of the political aisle they fall on, according to a poll Wednesday.
Congressional Republicans are quickly advancing legislation aimed at cutting taxes, in the hopes of spurring economic growth – but not everyone agrees that tax cuts are the key to a healthy economy. Whether people view tax cuts as helpful to the economy or their own financial situation primarily depends on party affiliation.
Gallup conducted the poll at the start of the month as Senate Republicans approved their bill to overhaul the tax code. The poll found a slim majority, 53 percent, don’t think it will help the national economy. Republicans make up the bulk of those who expect a positive impact with 82 percent saying it will. Democrats overwhelming disagree with 83 percent saying it won’t help the economy.
“As is the case with overall approval of the bill, partisanship is the biggest driver of opinion — with majorities of Democrats and independents saying the cuts won’t help their family or the national economy and majorities of Republicans saying they will help both,” Gallup stated.
The poll also asked whether people think tax cuts will help with their family’s financial situation with most believing it won’t at 57 percent. Republicans, again, make up most of the support at 66 percent saying it will help them financially. Democrats don’t think it would help them financially at 82 percent.
House Republicans were the first to pass their version of the bill, known as the Tax Cut and Jobs Act, during a vote Nov. 16. The Senate later passed its version in the early hours of Dec. 2 following an intense debate that went late into the night. Both chambers are starting a process, known as a conference committee, to resolve differences between the bills.
The House voted to form a conference committee Monday – with leadership promptly appointing members to serve on it. The Senate also agreed to go to a conference committee during a vote Wednesday. The two versions of the bill differ from one another in how they handle income tax brackets, deductions, and other key provisions.
The conference committee will also allow lawmakers to make other changes to their bills before they are sent to President Donald Trump to be signed into law. Both bills currently lower the corporate rate to 20 percent – but there have been talks that rate might be increased to 22 percent. The corporate tax rate is at 35 percent under current law.
While the bills are aimed at lowering rates for individuals and companies across the country, critics have warned many middle-class taxpayers could end up seeing more of a tax burden because it reduces deductions they rely on, like in the case of state and local (SALT) taxes.
SALT deductions allow taxpayers who itemize to deduct some of their local taxes on their federal taxes. The bills eliminate the deductions, with the exceptions of property taxes which are capped at $10,000. The Senate version of the bill also eliminates what is known as the individual mandate, a critical component of Obamacare. Critics warn that provision will undermine the law entirely, causing many to see higher premiums or even lose coverage.
Economists and tax policy experts have also debated on how much economic growth will come from the bills. While some have found they will be a huge boon to economic growth, others warn they won’t – primarily due to increased deficits causing drag in the years ahead.
Even some supporters of the bills have expressed concern over the deficit increase they will cause – estimated to be upwards of $1 trillion over the next decade, even with projected economic gains taken into account. Democrats have warned the increased deficit could prompt cuts to entitlements – which many people rely on.