Americans Drink the Political Kool-Aid When It Comes to Taxes [DATA]January 19, 2018 | By Mary Lister
During the election, the breadth of the political aisle swelled as Democrats and Republicans leaned away from each other on most key issues. Bernie Sanders painted a picture of a fair and peaceful socialist-leaning system. Trump, ever the capitalist, promised to take care of the lower and middle class by driving new business and lowering taxes. Almost a year after the election, it’s time to get down to business. As rumors swirl around Trump’s tax plan – will it cut taxes on the rich or will it benefit the middle class? Will it be more or less complicated than what we have now? – we wanted to know how Americans feel about taxes.
First, we asked if Americans had heard about the new tax plan; 33% report that they don’t know anything about it. Though only 34% of Republicans report knowing a lot about the tax plan, 55% of those familiar with the proposal believe it would help them personally. Feelings about the tax proposal fell along party lines, 58% of Democrats say the plan would hurt them despite only 29% reporting substantial knowledge about the plan.
These answers could be coming from dated election rhetoric or simply from walking the party line. But let’s face it: taxes can be confusing. Just when you think you have figured it out, another administration comes in and switches things up.
A quick overview of the plan:
- Lowers income tax rates, maximum corporate tax rate, maximum tax rate for small businesses
- Reduce current seven tax brackets to three
- Cuts itemized deductions
- Doubles the standard deduction
- Cuts personal exemptions, estate tax
- Increases child tax credit
Proponents of the new tax code tout it as a simplification of the current system. Arguably, Americans would need to be aware of their tax bracket to know who will benefit from the tax plan, yet only 40% of Republicans know what tax bracket their household falls into. Prior to it’s passing, over half of Trump supporters believed the plan would stimulate the economy, most non-supporters (51%) believed it’s simply a tax break for the wealthy and would increase the budget deficit (30%).
Somewhat unexpectedly, 56% of Americans believe inheritance should not be taxed. This year, the Tax Policy Center estimates about 5,500 out of 11,300 filed estates will qualify for the tax, i.e. over $5.49 million and after all exemptions.
The mortgage deduction is very popular. 31% of Americans are working to pay off a mortgage and 72% of them take advantage of the mortgage interest tax deduction. This deduction is included in Trump’s plan, along with charitable donation deductions. While conservatives tend to argue for a resurgence of “trickle-down” economics, 31% of Americans would use an extra $1000 in tax-savings to pay bills, compared to the 4% who would spend it.
Across the US, Americans are overwhelmingly dissatisfied with how their taxes are allocated. 74% of consumers believe their taxes are not being put to good use, though the largest segment of satisfied taxpayers is Trump supporters – 10% of which believe their taxes are well-spent.
Despite current negative rhetoric around healthcare and school choice, the majority of Americans want their federal tax dollars to be put toward healthcare (63%) and education (63%). Republicans are more likely to support military spending (56%) and infrastructure investment (37%) over Democrats, who place a higher value on healthcare (74%), education (71%), safety net programs (26%), and foreign aid (10%).
Fluent is a data-driven marketing company. This blog post pulls data from two surveys: the “2017 Tax Reform Survey” was conducted online within the United States by Fluent on September 30, 2017 among 1,570 adults (aged 18 and up for both waves) and the “2018 Political Pulse Survey” was conducted online within the United States by Fluent on January 18th, 2018 among adults (aged 18 and up). Due to rounding, percentages may not always add up to 100%. Fluent’s marketing platform leverages a propriety survey module and dynamic audience sample that was used to facilitate the data collection for this study. Respondents were randomly selected and data was weighted to US Census 2010 population distribution.