Tuesday, April 10, 2012

U.S. Public Opinion on the Flat Tax

In April 2012, the American Enterprise Institute released its updated list of public opinion polls and responses on taxes, compiled by Karlyn Bowman and Andrew Rugg, spanning 1937 to today.  All survey questions and results on the flat tax appear on pages 38-45.

Forty-four questions asked if one or another form of a flat tax was a good or bad idea; thirteen how it would affect different economic classes (the respondent’s opinion, not based on any statistical analysis, and therefore largely excluded from this post); and four if it would be simpler or fairer.

The largest batch of 44 questions on whether the flat tax is a good or bad idea fell into several categories.  The results that appear below represent a majority of those polled in each of the surveys that included the specific question, or a clear plurality when including “don’t know” replies.

1.  Do you have a favorable or unfavorable impression of a simple flat tax with little or no deductions.  Results: 10 favorable, 4 unfavorable, 3 about even.

2.  Favorable or unfavorable if all or some current deductions eliminated?  Results: 4 favorable, 6 unfavorable.

3.  Favorable or unfavorable with preferential low rate for capital gains?  Results: 1 unfavorable.

4.  Favor or oppose Herman Cain and Jerry Brown’s specific flat tax proposals?  Results: 3 oppose.

5.  Prefer graduated to flat tax or flat to graduated tax?  Results:  8 prefer graduated tax, 5 prefer flat tax, 1 even.

6.  Simpler (1 yes); fairer (1 flat tax, 1 graduated tax, 1 even).

The surveys were taken between 1992, when Jerry Brown sought the Democrat Party nomination for president, through 2011.  Many were taken during Steve Forbes campaign for the Republican Party nomination during 1995-96 in which a flat tax was his chief economic proposal.

To summarize, a majority of surveys show that the American people favor a broad-based, low-rate, simple flat tax.  However, the public is opposed to preferential treatment for capital gains, and, by a small margin, want to retain popular deductions, despite a majority favoring a flat tax without deductions.  To further muddy the water, more surveys revealed support for a graduated over a flat tax.  In those surveys asking respondents to opine on how different economic classes would benefit from a flat tax, most stated that the wealthy would receive the largest benefit.

Barring a major surprise, Governor Mitt Romney will be the Republican nominee.  This means that the flat tax will not be an issue in the 2012 presidential election.