Despite repeated promises that President Obama will not raise taxes on anyone earning less than $250,000 a year, senior administration officials recently floated the possibility that tax increases on middle class Americans might be necessary to pay for health care reform.
The latest IBD/TIPP poll, however, found that Americans by a 61% to 29% margin do not welcome this approach. Democrats support the idea 47% to 43%, but Republicans and Independents oppose it by 80% to 13% and 69% to 26%, respectively.
The finding is in line with recent IBD/TIPP data showing that Independents are becoming closer to Republicans' point of view than to Democrats'.
The intensity of opposition to a middle-class tax increase is high. Overall, nearly one-half (48%) "strongly oppose," while only 12% "strongly support." More than two-thirdsof Republicans (68%) and a majority (58%) of Independents "strongly oppose."
The nation today is ideologically center-right, with 46% identifying themselves as conservatives, and another 34% as moderates. Only one in six self-identify as liberal.
Conservatives have traditionally believed in low taxes with limited government involvement in the economy.
Similar to their opposition to other proposals to increase taxes, an overwhelming share of conservatives (75%) oppose the idea. Only 19% support it. Moderates oppose middle-class tax increases by a 59% to 31% margin. Liberals support tax increases by a 54% to 32% margin.
By household income, those who oppose outnumber those who support across all income levels. One in two (50%) households with incomes below $30,000 oppose a middle-class tax increase. That increases to 60% for $30,000 to $50,000 households, 67% for $50,000 to $75,000 households, and 64% for $75,000+ households.
In May, a Washington proposal for a value-added tax to pay for health care did not gain traction. Our poll showed 60% opposed and only 25% in favor.
The president has repeatedly said the health bill would be deficit-neutral - meaning it would not add to the federal deficit. The estimated cost of the health reform is $1 trillion over the next 10 years, with part of the cost paid for with spending cuts, mostly coming from slashing Medicare payments to physicians, hospitals, and insurance companies.
Past experiences show that actual costs typically exceed estimates. Medicare, which insures 45 million seniors and disabled, is teetering on bankruptcy.
For the first 10 months of the budget year ending Sept. 30, the deficit was $1.27 trillion. By year-end, the shortfall is projected at $1.84 trillion. On the revenue side, corporate tax receipts and individual income-tax collections have plunged 58% and 21%. Bush tax cuts expire after 2010. Plans call for those in the 33% and 35% brackets to return to Clinton levels at 36% and 39.6%.
Taxing the rich has its limits.
Despite the reiteration of White House commitment to hold the line on taxes for the middle-class - with soaring deficits, shrinking tax revenues and an ambitious health care bill, the middle class of America comes in the cross-hairs of policymakers.
The message from our poll is clear: It will be a hard sell.
Mayur is president of TechnoMetrica Market Intelligence, IBD's polling partner.