July 17 (Bloomberg) -- Four in 10 Americans in a national poll say ending the Bush-era tax cuts on annual earnings of $250,000 or more would help the economy, supporting the position President Barack Obama has stressed in his re-election campaign.
The survey by the Pew Research Center released yesterday shows that 44 percent said the higher taxes would be beneficial, while 22 percent said such a move would harm the economy and 24 percent said there would be no effect.
In an almost identical finding, 44 percent said the higher taxes for top earners would make the tax system fairer; 21 percent said the result would be a less fair structure and 25 percent said it would make no difference.
While most Democratic and Republican lawmakers favor letting the tax cuts initially enacted under President George W. Bush continue for those below the $250,000 threshold, setting the rates for those above it has been a major divide between the parties and between Obama and presumptive Republican presidential nominee Mitt Romney. All of the tax cuts, passed in 2001 and 2003 and extended in 2010, are set to expire Dec. 31.
Obama emphasized his support for ending tax cuts for top earners while continuing them for others in July 9 remarks at the White House, urging Congress to pass such legislation. He made an announcement about pushing for elimination of the tax cuts before campaign stops in Iowa and Virginia, two of the hardest-fought states in the presidential race.
Romney and congressional Republican leaders want to extend the tax breaks for all income levels. Romney has proposed reducing rates for all income brackets and broadening the tax base through unspecified measures.
The top-earning 1 percent of U.S. households earned 19.4 percent of all income and paid 28 percent of all federal taxes in 2007, according to the Congressional Budget Office.
Republicans say higher taxes for top earners would hurt the economy because it would discourage job creation. Obama couches the issue as a matter of fairness and deficit reduction and says Republicans are holding middle-class tax cuts “hostage” to reductions for higher-income taxpayers.
In the Pew poll, 58 percent identified Obama as the candidate wanting the tax cuts to expire for wealthier Americans, while 7 percent identified Romney, 7 percent said both took that position, 8 percent said neither and 20 percent said they didn’t know.
The survey of 1,015 adults was taken July 12-15 and has a margin of error for its full sample of plus or minus 3.6 percentage points.
Senator Dick Durbin of Illinois, the chamber’s second-ranking Democrat, said today the Senate probably will vote next week on Democrats’ proposal to keep the Bush-era tax cuts for 98 percent of households while letting them expire for top earners.
Senator Patty Murray, a Washington Democrat, said yesterday in a speech at the Brookings Institution that her party will be in a stronger negotiating position in January if the Bush tax cuts expire. “Every proposal will be a tax cut proposal” at that point, she said.
Senator John Thune of South Dakota, a member of the Republican leadership, said in an interview today, “I suppose they could argue if tax rates went up, that if the tax rates were lowered that somehow is a tax cut, but I don’t think the American people get fooled by that.”
“We think playing Russian roulette with our economy is a really bad idea,” Senate Minority Leader Mitch McConnell, a Kentucky Republican, told reporters today. “Playing games with our economy is the single worst thing we can do.”
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