Politics

The next GOP hurdle: Many Americans aren't sure they even need tax reform

Key Points
  • Republicans plan to take on a tax code rewrite as their next legislative push.
  • Polls show that many Americans believe their tax bills are fair.
  • Slashing corporate taxes may be difficult as many citizens already believe businesses pay too little.

Republicans are facing a tough sell as they try to make the case for a sweeping rewrite of the nation's tax code to the American public this month.

Recent polling data show many households don't appear convinced that there's a problem with the current system. About half actually feel their tax bill is fair — or even too low.

Where there is frustration, the surveys found that it is rooted in the belief that businesses aren't paying their fair share. That doesn't bode well for the White House's plan to slash the corporate tax rate to 15 percent from 35 percent, with one poll showing voters overwhelmingly rejecting it.

"It must be remembered that taxpayers may dislike the current tax system but not be convinced that Congress and the Trump administration will make it any better — change could be worse," a recent Gallup blog post said. "Without a strong push from the American people, Trump's tax reform might not materialize."

Gallup found this spring that the share of Americans who feel they pay too much in federal taxes had dropped to 51 percent in April, down from 57 percent a year earlier. Meanwhile, a growing number — 42 percent, up from 37 percent — felt their tax bill was about right. And the share who felt they should pay more inched up 1 point, to 4 percent.

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Conservative groups are spending millions of dollars this month to argue otherwise, launching ads and holding rallies to convince Americans that the tax code is unfair and broken. The Trump administration and House Speaker Paul Ryan have vowed to pass legislation by the end of the year in hopes of generating urgency as Republicans face the prospect of heading into the 2018 midterm elections with no major legislative wins.

The party is aiming to frame tax reform as way to bolster the middle class. A Gallup poll in March found that's a message that Americans from both parties support, with 61 percent favoring significant reductions in taxes for middle-income families.

Independent analysis of the tax reform proposals from President Donald Trump's campaign and Republican leadership show that they would lower the bill for working class households. But they also showed those benefits would be dwarfed by massive tax cuts for the wealthy and for businesses.

Under the tax plan released during Trump's campaign, the top 0.1 percent would get an average tax cut of $1.1 million, the Tax Policy Center found, representing about 14 percent of their after-tax income. Lowering the corporate tax rate from 35 percent to 15 percent would save businesses an estimated $2.4 trillion over the next decade.

The White House has said those numbers do not reflect its plans to close loopholes for wealthy households and businesses. However, the administration has not specified which ones it will eliminate. The Tax Policy Center did not analyze the cost of a framework for reform that the White House released in April because it lacked key details.

But a Quinnipiac University poll taken shortly after that plan was released showed 52 percent of voters disapproved of the proposal. Nearly three-quarters of voters said they would oppose it if it adds to the deficit. There was also little support for reducing the corporate tax rate to 15 percent, with 55 percent of voters calling it "a bad idea."

The results echo the findings a survey by the Pew Research Center earlier this year. Almost 80 percent of Americans said they were bothered by the idea that some corporations don't pay their fair share. About three-quarters said they were frustrated by the complexity of the tax system, but their personal tax bills upset just over half of them.

Republicans argue that lowering rates for businesses and simplifying the tax code will help boost economic growth — and that will ultimately translate into more jobs for the middle class. A $2.5 million advertising campaign launched last week by the center-right advocacy group American Action Network featured the story of a former Ohio metal worker named Albert.

"I was middle class, and it meant a better life for my daughter," the ad says. "But with more foreign competition — I got laid off. America's tax code is so complicated — we can't be as competitive."

The White House and Republican leadership are slated to tout tax reform in speeches and events during the next few weeks. House Ways and Means Chairman Kevin Brady, who heads the committee responsible for writing the tax bill, will deliver remarks on Wednesday in California. Trump is also expected to address the issue this week. The administration has said it hopes to see a bill introduced in September, though even some Republican lawmakers have signaled that timeline is overly aggressive.