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April 15, 2009

Gallup: 48% Find Tax Burden Just About Right

46% think it's too high.

Gallup forgets to mention an important fact: 38% pay no income taxes whatsoever. Add them into another 10% who pay a trivial amount, and you can easily understand why they're so psyched about the current tax code, and don't mind "the rich" (i.e., the other 52%) paying more.

There's another point here too: Observe the graph. When was it that this sea-change in the public's attitude about tax burdens actually occurred?

Yes, that's correct: The public went from thinking their taxes were too high to about right at the exact same time as Bush's 2001 tax cuts.

He deserves credit for that -- if credit is indeed due. Personally, I thought then -- and think even more strongly now -- that while removing millions of taxpayers from the tax rolls and cutting down to almost nothing the taxes paid by millions more was popular, Bush actually cut lower- and middle- class taxes too much, to the point where nearly half the country had no stake in the tax rate argument whatsoever. (By the way, I also think he cut taxes on the highest bracket by a point or two too much.) *

It's impolitic as hell to suggest it, but Ari Fleisher is right: Almost everyone should pay some amount in income taxes, even if it's a trivial amount, if only to not divide the public absolutely between tax-payers and tax-consumers.

Gallup also tries the spin the poll as somehow a positive reflection on Obama's policies. But note, again, the chart: The major change in the balance of opinion occurred due to Bush's tax code changes, with only the most trivial shifting of a point here and two points there since. Here's Gallup:

Since 1956, there has been only one other time when a higher percentage of Americans said their taxes were about right -- in 2003, when 50% did so after two rounds of tax cuts under the Bush administration.

The slightly more positive view this year may reflect a public response to President Barack Obama's economic stimulus and budget plans. He has promised not to raise taxes on Americans making less than $250,000, while cutting taxes for lower- and middle-income Americans. The latter has already begun, as the government has reduced the withholding amount for federal income taxes from middle- and lower-income American workers' paychecks.

Later, Gallup opines:

As the remaining U.S. tax filers prepare to send their income-tax returns before the April 15 deadline, Gallup finds Americans' views of their federal income taxes about as positive as at any point in the last 60 years. This may reflect the income-tax cut that was part of the $787 billion economic stimulus plan, as well as a continuing sense of patriotism with the country fighting two wars.

The income tax cut that was part of Obama's stimulus was, what, that $13 per week cut for some tax payers? Gallup is pretty sure that that's the cause of the current mood on taxes, rather than the huge cuts Bush enacted.

This is some seriously strained analysis. Gallup bends over backwards to credit minor shifts in opinion to Barack Obama's prospective, hypothetical future tax cuts (which will remain purely hypothetical, of course) while studiously ignoring the major impact of Bush's actual tax cuts. Current attitudes about taxation should be shaped mostly by actual current taxation levels, no? And yet in Gallup's view, it's a toss-up as to whether opinions are more shaped by Bush's actual, real, on-the-books tax cuts, or Obama's imaginary future tax cuts.

And they are purely imaginary, wholly fantastical. Obama's not going to cut taxes for the middle class. He has created a staggering, unprecedentedly large, jaw-dropping, eye-popping structural deficit...

wapoobamabudget1.jpg

...that can only be reduced by going where the money is: The middle class, which has both the huge numbers of tax-filers to make a difference, as well as enough money to pay more.

The poor have the numbers but not the money, the rich have the money but not the numbers. Only the middle class has that wonderful combination of big numbers and ample income.

Yes, it's coming. As the ship's architect said in Titanic about the sinking of the ship: It is purely a simple mathematical problem at this point with only one solution. "It is made of iron; I assure you, it will sink."

The Obama administration will be hard-pressed to avoid raising taxes on the middle class, according to economists crunching federal budget numbers in the lead-up to tax return day — today, April 15.

President Obama’s proposed changes to the tax code, combined with exploding entitlement costs, will lead to ever-growing debt, according to independent estimates. The big question for Obama and his economic team will be whether he can meet the rising costs with increased tax revenue only from small slices of the electorate. …

“You just simply can’t tax the rich enough to make this all up,” said Martin A. Sullivan, a former economic aide in the Reagan administration who said he backed Obama last fall.

“Especially just for getting the budget to a sustainable level, there needs to be a broad-based tax increase,” said Sullivan, now a contributing editor at Tax Analysts publications. “If you want to do healthcare on top of that, almost certainly, it just makes [a middle-class tax increase] all the more certain.”

This is the most bizarre part of Gallup's analysis, crediting Obama with the public's less-peevish mood about the tax code. If they're happy now, that means they won't be happy with changes, changes that can be made in only one direction -- increasing taxation. If they're content now, that means they will be less content as Obama raises taxes, as he has deliberately overspent to be "forced" to do.

Gallup knows this, and knows that the public's less-disgruntled mood on taxes should not be taken as some sort of endorsement of Obama, but rather a large warning to Obama should he begin undoing the very tax cuts -- Bush's -- that created the generally positive public mood on taxes in the first place. Bush created the tax tranquility (pax tax?); Obama will undo it; and yet Obama is somehow to be credited for it.

What?

Thanks to Warden.

* I think he got to fixated on having tax rates set at multiples of five -- 10, 15, 35... If it were 11, 16, and 36, he might have avoided most of his own much-smaller structural deficit. Yes, that's a point higher and all -- but still a tax cut, and without as much of a built-in structural deficit, which was used an issue against him, again and again.

Back when a $350 billion structural deficit actually mattered. Now, of course, Obama sells us $1+ trillion deficits per year and we're told it's no big deal.



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posted by Ace at 01:43 PM

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