Compared to a year ago, Americans are more in favor of tax increases to help reduce the federal budget deficit and avoid the fiscal cliff. However, they mostly support a balanced method of tax increases and spending cuts.
With the focus of the nation turned to the looming fiscal cliff, the stock market took a nine-day dive. However, all it took was Republicans and Democrats sitting down to talk. Once they came out of the meeting and called it “constructive” the markets stabilized slightly.
Reports out of the meeting revealed that Republicans were willing to accept some revenue increase (aka, tax increase) as long as there were significant spending cuts.
A Gallup poll from earlier in the week showed that the country’s representatives were actually on the same wavelength as their constituents. According to respondents, Americans want to see a balanced approach with equal spending cuts and tax increases.
Last year, only 32% of Americans favored reducing the federal budget deficit with an equal balance of tax increases and spending cuts. The option for mostly/only spending cuts was the favored approach last year with 50% of Americans.
The poll held last year was held before the federal debt limit was raised. Gallup points out that an agreement on the debt limit led to the creation of the bipartisan debt reduction “supercommittee.” The committee failing to agree on a way to get the budget deficit under control led to the automatic tax increases and spending cuts known as the “fiscal cliff.”
“The fiscal cliff measures were designed as a draconian outcome that neither party would find acceptable, in hopes that the deficit supercommittee would be able to make difficult choices to develop a plan for meaningful deficit reduction,” according to Gallup.
Broken down among political parties, Republicans favor only/mostly spending cuts with 69%, just 24% in favor of equal spending cuts and tax increases and just 5% for tax increases.
Democrats and Independents were far more in favor of equally increasing taxes and cutting spending to reduce the deficit. Half of Independents and 57% of Democrats want the deficit reduced with equal spending cuts and tax increases; meanwhile, 23% of Democrats and a third (34%) of Independents are in favor of spending cuts. Democrats favor tax increases most with 17% to only 9% of Independents.
Republicans haven’t changed their views much from a year ago; however, both Independents and Democrats are more in favor of reducing the deficit through equal shares tax increases and spending cuts.
“It is unclear to what extent Americans' greater willingness to consider tax increases is related to this unwelcome fiscal deadline,” according to Gallup.