Americans on Tax Reform

Abstract

INDIVIDUAL INCOME TAXES Income Taxes on the Wealthy ‐ When presented the effective tax rates for different income brackets, for incomes over $200,000, less than a quarter favored reductions, including fewer than four in ten Republicans and less than a third in very red districts. Rather an overall majority favored increasing taxes by 5% or more for incomes over $200,000, with this majority increasing at progressively higher income brackets. Among Republicans, nearly half favored increases on incomes over $500,000, while in very red districts this was a majority. Income Taxes on the Middle Class ‐ Modest majorities proposed reducing taxes on those with incomes from $30,000 to $50,000 by 5%. This included a substantial majority of Republicans, only half of Democrats, but a modest majority in very blue districts. For income of $50,000 to $100,000 there was no majority support for increases or decreases, but a majority of Republicans cut taxes by 5%. Deducting State and Local Taxes ‐ Nearly seven in ten, including a majority of Republicans and six in ten in very red districts, opposed the proposal in the House bill to eliminate the deductions for state and local taxes on individual federal income taxes, including property taxes. Six in ten opposed the proposal in the Senate bill to eliminate the deductions for state and local taxes, with an exception for $10,000 for property taxes. In this case, a majority of Republicans favored the proposal, but a substantial majority in very red districts were opposed. Mortgage Deduction ‐ Views were divided on the proposal to lower the maximum amount of deductible interest for new mortgages to the interest paid on $500,000 on all home mortgages. Six in ten Republicans favored the proposal, while six in ten Democrats were opposed. Very red and very blue districts were similarly polarized. Reducing and Then Eliminating the Estate Tax ‐ A modest majority opposed eliminating the estate tax in six years and in the meantime doubling the amount that can be transferred tax‐free. Three quarters of Democrats and six in ten independents opposed the proposal while three-quarters of Republicans favored it. In blue districts, majorities were opposed, including six in ten in very blue districts. In very red districts a majority favored it, but in other red districts views were divided. CORPORATE TAXES Corporate Tax Rates ‐ Six in ten opposed lowering the top corporate tax rate from 35% to 20%, including eight in 10 Democrats and two-thirds of independents. Two-thirds of Republicans favored the idea, but majorities opposed it in red districts, including nearly six in ten in very red districts. Territorial Tax ‐ The least popular proposal, opposed by nearly seven in ten, is to eliminate the U.S. corporate income tax on profits made by their subsidiaries in other countries. More than eight in ten Democrats and nearly seven in ten independents were opposed. Republicans were evenly divided, but in very red districts nearly seven in ten were opposed. Pass‐Through Businesses ‐ Overall views were divided about the proposal in the House bill to set a new maximum tax rate for owners of 'pass‐through' businesses at 25%. Three quarters of Democrats and a slight majority of independents were opposed while three-quarters of Republicans were in favor. Very red districts were in favor, while very blue districts were opposed. Immediate Expensing ‐ Views are divided on the proposal to allow businesses for the next five years to deduct the full amount of their investments (other than buildings) in the year they make the investments. Three‐quarters of Republicans favor the proposal, while nearly three-quarters of Democrats are opposed. Very red districts were in favor, while very blue districts were opposed.