Poll Finds Upturn in Sentiment on Tax Overhaul and Economy
Posted January 16, 2018 7:47 p.m. EST
Americans are warming to the Republican tax law, and becoming more confident in the economy as a whole. They just aren’t sure that President Donald Trump deserves much credit.
The tax overhaul that Trump signed into law just before Christmas remains relatively unpopular and highly polarizing, according to a new poll conducted for The New York Times by SurveyMonkey. But support for the law has grown significantly over the past month, and more Americans believe that they will receive a tax cut. Forty-six percent of Americans strongly or somewhat approved of the law in early January, up from 37 percent when the bill was nearing passage in December.
At the same time, falling unemployment, accelerating economic growth and a surging stock market have made Americans increasingly positive about both their own finances and the overall economy. That could be good news for Republicans hoping to overcome Trump’s unpopularity in the midterm elections.
Michael Moran, a recently retired business executive in Georgia, said the economy in his town an hour north of Atlanta was “red hot.” The job market is so tight, he said, that he can’t even find an electrical contractor to perform repairs on his house.
“There’s help-wanted ads everywhere — you see them on all the stores,” Moran said. “In 2010, you could’ve just yelled out the door and had people lining up.”
Moran said that he had initially been concerned that the president’s shoot-from-the-hip style could be bad for financial markets and the economy. A year into his term, Moran still isn’t a fan, but he said he was “pleasantly surprised” by Trump’s stewardship of the economy. The corporate tax system was overdue for an overhaul, Moran said, and he applauded efforts to reduce regulations on businesses.
“I won’t say that Trump deserves all the credit for that, but it is true that the economy just really picked up,” said Moran, who described himself as a political moderate who leans Republican but voted for neither Trump nor his opponent Hillary Clinton in 2016.
Overall, 42 percent of Americans believe the national economy is better than it was a year ago, according to the Times survey, which polled 10,509 adults in the first week of January. Only 23 percent believe the economy has gotten worse. And a broader measure of consumer confidence, which combines five questions on economic and financial conditions into a single index, rose significantly in January after remaining flat for most of 2017.
Ordinarily, such figures would bode well for Republicans heading into the midterm elections this fall. Most Americans, however, said Trump’s policies had either hurt the economy or had little effect on it; only 38 percent said his policies had made it better.
“The overall story remains that the president is not getting credit for an economy that has been continuing on an upward trajectory,” said Jon Cohen, vice president for survey research at SurveyMonkey.
Other recent surveys show public confidence in the economy is rising, but less movement on the tax bill. A Quinnipiac University poll released last week found that two-thirds of Americans viewed the economy as excellent or good, up 3 percentage points from December. A Gallup poll published last week found that approval for the law had risen to 33 percent in January from 29 percent in December, an increase that was not statistically significant.
Supporters of the tax law dismissed its poor poll numbers in the fall, saying Americans would like it more once they began to see its benefits in their take-home pay. “The results are going to be what sells this bill,” House Speaker Paul Ryan, R-Wis., told reporters in mid-December.
Many Americans won’t start to see more money in their paychecks until February, because the Internal Revenue Service issued new tax withholding guidance only last week. But a series of high-profile announcements, from companies such as Walmart and Wells Fargo, have cited the tax bill in decisions to raise wages or give employees one-time bonuses.
Many analysts, however, say the pay increases were more a result of the strong labor market than the tax law. A Morgan Stanley survey of Wall Street analysts released on Tuesday found that only 22 percent expected the companies they follow to direct at least some of their tax savings to employee compensation. By contrast, 83 percent of analysts said companies would increase share buybacks, dividends or merger activity. (Analysts could select multiple responses.)
Still, the law, which cut taxes for businesses and individuals while eliminating many deductions and credits, isn’t particularly popular. Forty-nine percent of Americans in the Times survey said they disapproved of it, and far more people said they were strongly opposed to it than strongly in favor. And deep political divisions are evident: 86 percent of Republicans approve of the law, but just 13 percent of Democrats do.
Most Americans still don’t think they will see their taxes go down under the new law. According to the survey, 41 percent of Americans expect a tax cut this year, up from 33 percent in December. Most independent analyses estimate that three-quarters or more of households will receive a tax cut in 2018, although those cuts are set to expire after 2025.
Doug Leichliter, a retiree in western Pennsylvania, questioned the wisdom of a big tax cut at a time when unemployment is already low, saying he worried that it could lead to inflation. And he said he doubted that middle-class Americans would see much benefit in any case.
“I think everybody’s going to see a little bump, but the vast majority of the money is going to go to the 1 percent,” Leichliter said. “I don’t necessarily think the money’s going to trickle down.”