Tax Analysts®Tax Analysts®

My Subscriptions:

Featured News

April 17, 2012
Americans Support Higher Taxes on Wealthy: Bad News for Romney?

Full Text Published by Tax Analysts®

by Bruce Bartlett

Bruce Bartlett is a former Treasury official and author of The Benefit and the Burden: Tax Reform -- Why We Need It and What It Will Take (2011).

In this article, Bartlett reviews recent poll data and finds strong support for raising taxes on high-income individuals, which could present a major problem for presumptive Republican presidential nominee Mitt Romney in November.

* * * * *

Bruce Bartlett (Goodman/Van Riper) President Obama has concluded that income inequality and higher taxes for upper-income individuals will be key issues for him in the upcoming campaign. Democrats in Congress have signaled that they will use every opportunity to highlight these topics.1 Although it is unlikely that any legislation to raise taxes on the wealthy will be enacted before the election, if Obama succeeds in making the tax question an asset to his campaign and being reelected, it could have a major impact on the post-election debate over extension of the 2001 and 2003 tax cuts, which expire at the end of the year.

Republicans are savoring the debate, believing their view that taxes on the rich are already too high and ought to be cut will prevail. If nothing else, they are assured of large campaign contributions from the wealthy. However, they would do well to look at recent polling data before counting their chickens. A long line of polls from many different organizations consistently show that Americans favor higher taxes on those with high incomes.

A December Pew poll found that the biggest problem people have with the tax system is that the rich don't pay their fair share. Fifty-seven percent rated that the number one problem, up from 51 percent in 2003. By contrast, only 32 percent rated complexity as the biggest problem, with 14 percent naming the amount of taxes they pay. Even among Republicans, 38 percent said the tax system's biggest problem is that the rich are not paying an adequate amount.

A January CBS News/New York Times poll asked people if they think upper-income Americans pay their fair share of income taxes. Fifty-five percent said they pay less than that amount, with 24 percent saying they pay about the right amount, and 11 percent saying the rich pay more than their fair share. The poll also asked whether capital gains and dividends should be taxed at a lower rate than income from work. Fifty-two percent said they should be taxed the same; only 36 percent said they should continue to be taxed at a lower rate.

Also in January, an Economist/YouGov poll asked whether people favor raising taxes on families making more than $250,000. Fifty-eight percent said yes, with only 24 percent saying no. The poll also asked whether people favor the so-called Buffett rule, which would require that those making more than $1 million pay at least a 30 percent effective federal tax rate. Sixty-one percent favor such a rule, with only 23 percent opposed. Even among Republicans, a plurality of 43 percent supports the Buffett rule, compared with 41 percent who didn't support it.

Several February polls asked about the Buffett rule. A Washington Post/ABC News poll found that 72 percent of people support it, while 24 percent do not. A CBS News/New York Times poll found 67 percent in favor, up from 60 percent in December, with 29 percent opposed, down from 35 percent. Even 51 percent of Republicans support the Buffett rule. An Associated Press/GfK poll found 65 percent in favor of the rule and 26 percent opposed.

In March an Ipsos/Reuters poll found 64 percent agreeing with the Buffett rule, with 30 percent against it. Among Republicans, there was plurality support of 49 percent over 41 percent.

Supporting the case for higher taxes on the wealthy, a large percentage of Americans say that the distribution of wealth and income in America is unfair and that the rich are getting richer at the expense of low- and middle-income people.

A September 2011 Pew poll found that 45 percent of Americans believe the nation is divided between haves and have-nots, up from 35 percent in 2009 and 42 percent in 2010. Forty-seven percent of people said that the Republican party is principally concerned with helping the haves, with only 7 percent saying the GOP focuses on the have-nots. By contrast, only 15 percent see the Obama administration as mainly concerned with helping the haves, while 29 percent say it favors the have-nots.

Also in September, a Harris poll found a sharp increase in its alienation index. A key reason is that 73 percent of Americans said that the rich are getting richer and the poor poorer, up from 68 percent in 2010 and 66 percent in 2009.

In October 2011 a CBS News/New York Times poll found that only 26 percent of people believe that the distribution of money and wealth is fairly distributed; 66 percent said it should be more equitable.

A November 2011 Harris poll found that 80 percent of people believe that corporate managers have become rich at the expense of ordinary workers; 77 percent of people say they are very angry about that. Also in November, a Washington Post/ABC News poll found that 61 percent of people believe that the wealth gap between the rich and the rest of the population is at a historically large level. Sixty percent say the government should do something about it.

In December 2011 an NBC News/Wall Street Journal poll asked people to name the single most disappointing event of the previous year. In first place, people said that the wealthiest 1 percent had gotten richer while income for those in the middle had declined. Also in December, Gallup found that 72 percent of people believe it is important for the federal government to reduce the income gap between rich and poor, with only 28 percent saying it is not important.

A January Pew poll found that a sharply rising percentage of people see conflict between rich and poor, with 66 percent seeing conflict versus 47 percent in 2009. Even among Republicans, the percentage seeing conflict has risen from 38 to 55 percent. The poll also found that a 46 percent plurality of people believe that the wealthy became wealthy primarily through luck -- being born wealthy or knowing the right people -- with 43 percent saying that it was mainly through their own ambition, work, and education. Even among Republicans, 32 percent mainly credit luck for the wealthy being wealthy.

In a February Washington Post/ABC News poll, 68 percent of people said that the U.S. tax system favors the wealthy, with only 19 percent saying that it treats upper- and middle-income individuals equally. The poll also asked people what they thought about presumptive Republican presidential nominee Mitt Romney paying only 14 percent in taxes on a $22 million income in 2011. Sixty-six percent said he did not pay his fair share, with only 30 percent saying the rate was fair.

A new Harris poll this month found that 57 percent of people believe that economic inequality is a major problem, with only 10 percent saying it is not a problem at all. Even among Republicans, 38 percent said inequality is a major problem, with only 19 percent saying it is not. The poll found that 62 percent of people believe the government should take actions to reduce inequality, with only 26 percent opposed. Even 43 percent of Republicans favor policies to reduce inequality. When asked about the causes of inequality, 77 percent blamed the tax system; 73 percent of Republicans agreed.

The Harris poll also asked about tax fairness. Sixty-two percent of people say that taxes on millionaires are too low, including 46 percent of Republicans. Seventy percent say that raising taxes on the very rich is fair, and only 32 percent believe it would hurt the economy because those people are the job creators.

Given those results, it's a bit odd that Harris found that only 38 percent of people think the Democratic Party is doing a better job on inequality, with 23 percent saying the Republicans would do better. It's even odder that just 39 percent see Obama doing better on that issue, with 36 percent saying the Republican nominee would do better. However, only 11 percent of people say that Romney would do a better job.

Should Romney receive the Republican presidential nomination, it is a certainty that to turn up the heat on the question of inequality, Obama and the Democrats will highlight Romney's great wealth and his proposal to slash tax rates for the wealthy while cutting spending for programs that aid the poor.

It won't take much work. A January Economist/YouGov poll found that 84 percent of people believe that Romney cares about the wealthy. By contrast, only 57 percent of people said that Obama does.

A February CBS News/New York Times poll found that 53 percent of people believe that Romney's policies primarily benefit the wealthy, with only 11 percent saying they benefit middle-income people, and just 1 percent saying they would benefit the poor. Even among Republicans, a plurality of 29 percent say Romney's policies benefit the rich, with 21 percent saying they benefit those in the middle and 1 percent believing they benefit those at the lowest income levels.

A February CNN/ORC poll asked people which candidate generally favors the rich. Romney ranked first with 65 percent, with 28 percent saying he favors middle-income families, and 4 percent saying low-income families. By contrast, only 26 percent of people say that Obama favors the rich, with 40 percent saying he favors the middle, and 32 percent saying the lowest income levels. Because there are far more middle- and low-income people in America than rich, that would seem to give Obama a strong advantage in the election.

For reference, a January CBS News/New York Times poll found that only 1 percent of Americans identify with upper-income individuals, 15 percent identify themselves as upper-middle earners, 41 percent as middle-income earners, 34 percent say they are working class, and 8 percent identify themselves as lower-income individuals.

George Washington University political scientist John Sides summed up Romney's political problem:

    Americans perceive him as personally wealthy more than they do Obama. They perceive him as caring more about the wealthy, but less about "people like me" and the middle class, than does Obama. Moreover, Obama can "get away with" being perceived as personally wealthy or caring about the wealthy in ways that Romney cannot. For Americans, Romney's personal wealth is more intimately tied to the perception that he cares about the wealthy -- and this in turn implies that he cares less for the middle class.2

If Romney loses to Obama, and it is perceived that his wealth and support for tax cuts for the wealthy were major causes, it could change the political dynamics in Congress very quickly. Given that some action on extending the Bush tax cuts must be taken before year's end, Obama's hand will be greatly strengthened on topics such as the Buffett rule. Even if Republicans retain control of the House, they may not wish to be seen as blocking it if they believe it has genuine popular support.


1 Jonathan Weisman, "Obama and Democrats Ready to Pressure Republicans on 'Buffett Rule,'" The New York Times, Apr. 7, 2012.

2 "Does Mitt Romney Have a Wealth Problem?" The Monkey Cage, Jan. 13, 2012.


About Tax Analysts

Tax Analysts is an influential provider of tax news and analysis for the global community. Over 150,000 tax professionals in law and accounting firms, corporations, and government agencies rely on Tax Analysts' federal, state, and international content daily. Key products include Tax Notes, Tax Notes Today, State Tax Notes, State Tax Today, Tax Notes International, and Worldwide Tax Daily. Founded in 1970 as a nonprofit organization, Tax Analysts has the industry's largest tax-dedicated correspondent staff, with more than 250 domestic and international correspondents. For more information, visit our home page.

For reprint permission or other information, contact