- The Washington Times - Monday, June 2, 2003

In the debate surrounding the recently enacted tax bill, few commentators addressed the core issue. Namely, given the stubbornly sluggish economy, why was there so much resistance to tax cuts? Apart from the obvious ideological answer (some portion of the Democratic community want to take more of your money), the more fundamental (and vexing for conservatives) problem is a murky nexus between tax cuts and economic growth among voters. There is even less understanding of the relationship between such reductions and increased federal revenues. In such an environment, it is little surprise that tax cuts have been (and will remain) contentious and that tax cutters remain vulnerable to charges of indifference to the federal deficit.

Those are some of the conclusions we draw from the results in our most recent edition of the American Survey (conducted May 6-8 among 600 registered voters nationwide, margin of error plus/minus 4.0 percent).

The disconnect was most pronounced when we asked about persuasive reasons for tax cuts. Voters understand the connection between the economy and federal revenues. More than half (53 percent) think that the best way to balance the budget is to grow the economy. At the same time, only 34 percent think that tax cuts grow the economy. In fact, almost three in 10 (28 percent) think that tax cuts don’t do much to help the economy. With those two numbers as prologue, it’s not surprising that just one in five think that tax cuts ultimately increase federal revenues. Even the wealthiest (those making $80,000 or more) don’t quite get it, with almost a third (32 percent) saying that tax cuts increase deficits.

In short, it seems that about a third of the voters understand that the three — tax reductions, a growing economy and increased tax revenues — are linked, and about a third are resistant to the fundamental idea that tax cuts are good for the economy — which suggests to us that about a third of the voters are in play on this issue. We believe that the administration is right: Cut taxes to grow the economy.

Selling this position is a challenge. We foresee two important hurdles. First, despite not being nearly as robust as it once was, the class envy caucus remains powerful. A sizable fraction (35 percent) still believes that the best argument against tax cuts is that they are “giveaways to the rich.”

Second, there is a fairly steady and appropriate drumbeat focusing on spending restraint. Republicans and a small cadre of Democrats spend a lot of time “selling” the idea of restraining spending. That is an important and relatively popular effort (22 percent of respondents indicated that such restraint was the best way to balance the budget). Yet, as House Budget Chairman Nussle, Iowa Republican, and others suggest, it’s not an either or proposition. Balancing the budget requires economic growth ideas and spending restraint.

The issue of tax cuts will remain contentious until those who would reduce taxes make stronger rhetorical and intellectual connections between tax cuts, a growing economy and increased federal revenues. As noted above, there is superficial understanding of those issues among voters, but until there is greater understanding, those who wish to cut taxes will face significant legislative challenges.

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