Tax cuts are coming. Most Americans will save money or be unaffected. Fewer than 10% will end up with a higher tax bill.
Yet the tax-cut legislation drafted by Congressional Republicans and championed by President Donald Trump is surprisingly unpopular. Nearly twice as many Americans disapprove of the plan as approve. That includes many who are opposed to legislation that will put money in their pockets.
Why is that?
Here’s one likely reason: Many Americans simply don’t believe Republican claims that their tax-cut plan will benefit the middle class.
In a Yahoo Finance survey conducted online Dec. 17 and 18, 47% of respondents said they don’t believe Trump’s claim that tax cuts will be “fantastic for the middle-income people.” Thirty-eight percent said they do believe Trump, and 15% said they’re not sure.
Congressional Republicans earn a bit more cred. Forty-five percent of respondents in our poll said they believe the GOP assertion, published by the Senate Finance Committee and others, that the tax bill will save a typical family about $2,000 per year. That’s obviously a more measured statement than Trump’s “fantastic” hyperbole. But 37% still say they don’t believe that claim, with 18% saying they’re unsure.
Americans also have doubts about whether the GOP tax-cut plan will be good for the economy, both short- and long-term. Less than a majority — 49% — say it will be good for the U.S. economy, with 28% saying it will be bad for the economy. The tax cuts will add about $1.5 trillion to the national debt during the next decade, which worries 57% of respondents. Thirty-two percent aren’t worried about that extra debt, and 10% aren’t sure.
The tax cuts are actually likely to benefit people more than they think, according to third-party analysis. A Tax Policy Center review of the bill that passed the Senate in early December found that 75% of taxpayers would get a tax cut, with only 7% facing a tax hike. There’d be no meaningful change for the rest. The latest version of the bill is actually a bit more generous, since Congress eliminated several provisions that would have harmed small groups of taxpayers.
In the Yahoo Finance poll, however, just 43% of respondents said they expect their taxes to go down, with 25% expecting them to go up. In general, that means people expect the bill to do considerably more harm than it probably will in reality. And our poll may understate this concern among the American public. Our poll respondents, who come from the Yahoo Finance audience, voted for Trump over Hillary Clinton by a higher margin than the general public did in last year’s election. So if anything, they ought to be more likely to support Trump policies than the general public, not less likely. Yet they’re unhappy nonetheless.
Here are the full survey results:
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- Trump’s grade on the economy drops from A- to B
- The rich win big in the final GOP tax-cut bill
- Trump could join Obama in the $1 trillion deficit club
- What “President Pence” would mean for markets
- Trump’s “forgotten men and women” are still forgotten
Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman