Your Take on the Tax Cut

By a wide margin, BW Online readers don't think Bush's plan has very good chances of boosting U.S. economic growth

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?

Option Total %  
Very familiar 275 27.23 %
Somewhat familiar 400 39.6 %
Familiar enough 187 18.51 %
Not very familiar 105 10.4 %
Not familiar at all 36 3.56 %
Not sure 7 0.69 %

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:

Option Total %  
Very significant 34 3.36 %
Somewhat significant 100 9.89 %
Better than nothing 157 15.53 %
Not very significant 171 16.91 %
Insignificant 338 33.43 %
Haven't noticed any extra money 196 19.39 %
Not sure 15 1.48 %

What do you intend to do with the extra money?

Option Total %  
Spend it on necessities 149 14.78 %
Spend it on discretionary items 51 5.06 %
Spend some and save some 152 15.08 %
Save it for future spending on necessities 145 14.38 %
Save it for future spending on discretionary items 79 7.84 %
Haven't noticed any extra money 369 36.61 %
Not sure 63 6.25 %

What do you think the chances are that the tax cut will boost economic growth?

Option Total %  
Very good 82 8.09 %
Good 100 9.86 %
50-50 102 10.06 %
Not very good 211 20.81 %
Poor 505 49.8 %
Not sure 14 1.38 %

In terms of the benefit the Bush tax cut provides to Americans of various income levels, do you regard the tax package as:

Option Total %  
Very fair 100 9.86 %
Pretty fair 107 10.55 %
Neither more fair nor less 74 7.30 %
Pretty unfair 164 16.17 %
Very unfair 538 53.06 %
Not sure 31 3.06 %

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?

Option Total %  
It's not risky 92 9.12 %
It's a little risky 72 7.14 %
It's risky, but necessary 100 9.91 %
It's uncomfortably risky 201 19.92 %
It's too risky to do 531 52.63 %
Not sure 13 1.29 %

What's your annual income?

Option Total %  
Less than $25,000 69 6.91 %
$25,000 to $49,999 188 18.84 %
$50,000 to $74,999 248 24.85 %
$75,000 to $99,999 195 19.54 %
$100,000 to $125,000 148 14.83 %
More than $125,000 150 15.03 %
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