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What Plays Better With the Public, Democratic Corporate Tax Hikes Or GOP User Fees?


President Biden and Democrats and Republicans in Congress have begun a fascinating game of three-dimensional chess over Biden’s $2.2 trillion infrastructure spending plan and the way to pay for it. As the game begins, it may be worth looking at where public opinion stands on infrastructure spending and how it should be funded.

To start, there appears to be broad-based public support for increased spending on infrastructure. That’s probably why Senate Republicans quickly put their own $568 billion counteroffer on the table. Besides, what politician doesn’t like to cut a ribbon? 

But survey results are extremely sensitive to the way the question is framed. For instance, there is far more support for the individual elements of the president’s plan than for something identified as Biden’s infrastructure proposal. Still, almost every survey shows that at least half and often far more than half of those polled back additional spending on roads and bridges.

How to pay?

Paying for it all is another matter. Biden favors corporate tax increases. Congressional Republicans prefer unspecified “user fees.” Moderate Democrats such as Sen. Joe Manchin (D-WV) support some corporate tax increases but won’t go as far as Biden. For example, while Biden would raise corporate income tax rates from 21 percent to 28 percent, Manchin says he would limit the rate hike to 25 percent.  

What does the public think of corporate tax hikes versus those user fees?

There has been widespread support for raising taxes on corporations and high-income households for years. Recent polling suggests there may be some differences in support for one over the other. But support for these taxes hikes  remains strongly held.  

Recent public opinion surveys

For example, a Morning Consult in March found that 54 percent of respondents favored Biden’s infrastructure improvements financed by raising taxes on those making $400,000 or more or on corporations. Only half as many backed new infrastructure without tax increases. Of course, the poll showed deep partisan divisions, with 72 percent of Democrats but 32 percent of Republicans favoring the pairing. 

By 10 percentage points– 57 percent to 47 percent–respondents favored tax hikes on high-income individuals over corporations

An April Monmouth University poll found that about two-thirds of respondents favored a tax hike on either high-income individuals or corporations to fund the new spending.

And a mid-April Washington Post poll found that while 52 percent of respondents backed Biden’s infrastructure plan, 58 percent favored the idea if it includes a corporate tax rate increase. All this puts Biden on pretty firm ground.

Gas taxes

What about those user fees?

For now, Republicans are hiding behind the bland—and largely meaningless—phrase. But at some point, they may have to be explicit. When it comes to roads and bridges, user fees for individuals generally mean either a motor fuels tax or some form of tolling.

Most politicians oppose both, probably on the assumption that so do voters. But survey research paints a much more complicated picture.  While ether idea probably violates Bien’s pledge to not raise taxes on those making $400,000 or less, they don’t seem unpopular.

It very much depends on how the questions are framed.

For instance, The Mineta Transportation Institute at San Jose State University has been polling on gas taxes since 2010. In 2019, it found that 40 percent favored a 10 cent-a-gallon tax hike, up 11 percentage points from a decade earlier. But even more–75 percent–supported the gas tax hike if they were told the money would be used to improve roads and bridges.

It didn’t matter much whether the respondents drove a lot or not at all. And while there were some regional differences, they were not large.

It is worth noting that a variant of the gas tax—a tax based on miles traveled– polled more poorly, though people’s responses indicated they were, more than anything, confused by the idea.

Tolls

Polling on tolling is even harder to sort out.

There is surprisingly little recent survey data, and many polls were done by interest groups. Independent  surveys generally were positive but also highly sensitive to framing. in general, they found more support for tolls than taxes.

A 2008 National Academy of Sciences analysis of the then-available survey research concluded, “The pubic favors tolls over taxes….Tolling represents freedom of choice. Only users pay.”

While the study is quite old, its results are music to Republican ears.

A more recent 2013 study by the Brookings Institution found cautious support for tolling and other forms of congestion pricing. But a 2018 survey found that people are more willing to pay both higher tolls and taxes for better roads and faster commutes.

If these surveys are to be believed, Biden appears to be starting with the upper hand. But public views on how to fund infrastructure spending are likely to be driven, as usual, by who is best at framing the debate over the next few months.

 

 

  

 

  

 

 



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