August 24, 2010

Article at Reuters

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Poll: Americans seem lukewarm on Obama's tax plan

WASHINGTON (Reuters) - Almost one-third of Americans support President Barack Obama’s proposal to allow tax rates to rise for the wealthiest, a Reuters/Ipsos poll found on Tuesday.

Nearly half of those surveyed think the tax breaks, which were enacted under former President George W. Bush, should be extended for everyone, including those who make more than $200,000 a year and would be excluded under Obama’s proposal.

Fifteen percent back stronger action than Obama has proposed -- letting all the lower tax rates expire, a view typically held by those worried about the yawning budget deficit.

Overall, that implies Americans are closely divided over the Bush era tax cuts. The poll found 49 percent favored extending all of Bush’s tax cuts, while 46 percent favored letting them expire at the end of this year for all or some Americans.

Americans’ ambivalence about taxes and how to tackle the nation’s growing fiscal crunch was reflected in answers to several questions of 1,063 adults surveyed August 19-22.

“Americans want to have their cake and eat it too,” Ipsos pollster Cliff Young said. “They want tax cuts on the one hand but they want to reduce the budget on the other.”

Republicans were substantially more likely to favor extending current tax rates for the wealthier income groups, compared to Democrats and independents.

When asked to rate their top economic concerns, the respondents listed government spending second, behind unemployment. Sixty-seven percent said they are “very concerned” about government spending, the poll found.

That finding implies the Republicans’ message about excessively high government spending is resonating with voters.

However, when asked whether lower taxes or cutting the budget deficit was a higher priority, majorities among both parties rated the deficit as more important.

Recent polls on the Bush-era tax cuts have been mixed.

A CNN poll last week found 51 percent back Obama’s plan to extend the lower rates for the middle class only, with 31 percent favoring the Republicans’ plan. An earlier Pew Research Center poll found more of an even split.

Obama and his fellow Democrats want to raise tax rates for individuals earning $200,000 or more, and for couples making more than $250,000. Republicans back extending historically low federal tax rates on all, including the upper income groups.

The Republican plan would impact only two to three percent of all Americans.

With unemployment stubbornly stuck near 10 percent, Republicans and several conservative Democrats argue raising taxes could derail the fragile economic recovery. Congress is set to begin debating the issue in September.

The poll has a margin of error of 3 percentage points.