Readers of BusinessWeek Online aren't especially impressed with the latest Bush Administration tax cut -- and a majority doubt that it will be large enough to stimulate the economy much. That's a key finding from our July 22 Reader Survey.
Of the more than 1,000 readers who responded, about 67% say they're somewhat or very familiar with the provisions of the new tax law.
A little more than half regard the extra money they're getting as not very significant or insignificant. In fact, nearly 20% say they haven't noticed any extra income at all, vs. the nearly 13% who say they're getting an extra amount that's somewhat or very significant. About 19% say they'll spend any extra money they get right away, compared with 22% or so who say they'll save it for future spending.
HOW FAIR? Taken together, these responses may explain why readers generally don't expect the tax cut to pull the economy out of the doldrums. Only about 18% think the chances are good or very good that the cut will boost economic growth, while nearly 71% think the chances of that happening are either not very good or poor.
Those who participated seem well attuned to two other major issues that surfaced during the tax-package debate: Around 69% say the tax cut is pretty unfair or very unfair in the way it is being distributed among Americans of various income levels, vs. the 20% who think it's pretty or very fair.
Moreover, 72% think the tax cut is uncomfortably risky or too risky, given the country's large budget deficit at the moment, vs. the 16% who regard the tax reduction as not risky or only a little risky. Both reactions are especially interesting given that many of those who participated in the survey are in income groups that should benefit from the President's tax package: About 45% earn between $50,000 and $100,000 a year, while 30% earn more than $100,000 a year.
Here are the detailed results of the survey, which as always wasn't a scientific poll, since anyone who wished to could participate:
How familiar are you with the provisions of the new tax law?
Not very familiar
Not familiar at all
Most likely, you've already noticed some change in your take-home pay as a result of the tax cut. Would you characterize the extra amount you're receiving as:
Better than nothing
Not very significant
Haven't noticed any extra money
What do you intend to do with the extra money?
Spend it on necessities
Spend it on discretionary items
Spend some and save some
Save it for future spending on necessities
Save it for future spending on discretionary items
Haven't noticed any extra money
What do you think the chances are that the tax cut will boost economic growth?
Not very good
In terms of the benefit the Bush tax cut provides to Americans of various income levels, do you regard the tax package as:
Neither more fair nor less
How would you assess the risk involved in issuing a large tax cut at a time when the U.S. is running the biggest budget deficit in its history?
It's not risky
It's a little risky
It's risky, but necessary
It's uncomfortably risky
It's too risky to do
What's your annual income?
Less than $25,000
$25,000 to $49,999
$50,000 to $74,999
$75,000 to $99,999
$100,000 to $125,000
More than $125,000