Mark Mellman: Taking control on taxes

If President Obama’s State of the Union address lived up to its advanced billing, you will have heard a lot of tax talk Tuesday night.

Polls suggest the issue does not top voters’ agendas, though the president’s focus could increase its salience. Just last week, Pew asked Americans how important it was for the president and Congress to deal with 23 issues. Tax reform placed 15th on the list, tied with moral breakdown.

That doesn’t mean Americans aren’t interested — nearly half (48 percent) said tax reform should be a top priority — but concerns like terrorism (76 percent), the economy (75 percent), jobs and education (67 percent each) are meaningfully higher priorities. 

Experience suggests that sharper formulations of the issue, like making big business and the wealthy pay their fair share of taxes, might have moved the issue up a bit. However, going into the State of the Union, taxes don’t seem to be a top-tier agenda item for the public.

Voters do have strong views on the subject, though, which tends to work in favor of the type of proposals the president is putting forward.

For instance, voters firmly believe the wealthy escape without paying their fair share. In fact, what angers people most about the tax system is not the amount they pay (11 percent), or even the complexity of the system (28 percent) — 57 percent are bothered most by the feeling that the wealthy don’t pay their fair share.

For at least 40 years, Americans have believed the tax system is rigged to benefit the rich. Since 1992, Gallup has asked the identical question about this subject 17 times. In every one of those polls, 55 percent or more say “upper income people” pay less than their fair share in federal taxes. The latest reading was 61 percent.

While the levels are high, the momentum from a Democratic point of view is in the wrong direction, with today’s response reading 12 points lower than it read on average between 1992 and 1996. 

Nonetheless, polls consistently show majority support for increasing taxes on the wealthy. 

Noted supporter of tax breaks for the wealthiest Americans Grover Norquist suggests this support stems largely from ignorance. People want the wealthy to pay less than they do, in his view, but simply don’t realize how much they actually do pay.

His polls suggest that the “maximum percentage of a person’s income that should go to taxes — that is, all taxes, state, federal and local” is, on average, under 16 percent, far less, he argues, than just the effective federal income tax rate on high earners.

Put me down as dubious. Talking income specifics seems to matter. In 1995, Roper asked a similar question and found the highest any family should pay averaged 23 percent — significantly higher than Norquist’s poll found 14 years later. Moreover, in the same poll, Roper asked specifically about those making more than $200,000 a year, and the average response was an even higher 27 percent. 

So it would seem that those making above $200,000 are different from “any family,” just as those making more than half a million or a million might be today.

Moreover, other research suggests the percentage today might be 30 percent or more. 

On the flip side, middle-class tax cuts are always popular. Expanding college-related tax cuts have been consistently supported by 75 to 85 percent of Americans, and other elements of the president’s package are also likely to enjoy widespread support.

But tax debates are often difficult. It’s easy to lose control, as voters lose track of the numbers. Are taxes going up for everyone or just those making over $250,000 a year?

All in all, the president’s proposals are likely to prove a winner politically, as well as for a middle class that is still struggling, despite improvements in the macro economy. 

Mellman is president of The Mellman Group and has worked for Democratic candidates and causes since 1982. Current clients include the minority leader of the Senate and the Democratic whip in the House.