Gallup Poll Finds Mixed Reaction To Bush Tax Cuts

by Leroy Baker, Tax-News.com, New York

09 July 2003

With the US unemployment rate hitting a nine year high last month, a recent CNN/USA Today/Gallup poll has revealed that many Americans are somewhat skeptical that the recent round of tax cuts will benefit their finances.

According to the survey results, just over one-third of American adults (34%) believe that the tax cuts will have a beneficial effect on their family's finances. This compares with a figure of 56% who say that the tax cuts are unlikely to be of benefit. However, it was found that working Americans with children under 17 were more inclined to be optimistic about the effect of the tax cuts.

The results also revealed a bias in the upper income groups towards support for the tax cuts, with 44% expecting them to improve their family finances, and 37% believing their take-home pay will increase as a result. This contrasts sharply with those on incomes of $20,000 or less, of whom only 22% feel that their family finances will improve. 17% of this group expect a larger pay packet. The poll also noted a political dimension in the responses, with 51% of Republican supporters anticipating an improvement in family finances compared to 21% of Democrat supporters.

Another interesting fact uncovered by the survey, perhaps the most important from the administration's point of view, was the respondents' inclination to save any extra cash received via larger tax rebates or credits, or use the money to pay off existing debts. This would appear to neutralize the stimulatory effect of increased consumer spending that the tax cut's supporters had been hoping for. Some observers have argued, however, that this may indirectly lead to greater spending levels as people free up lines of credit.

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