Attitude Check: Do the payroll tax cuts matter?

Lawmakers in Washington continue to bicker over the extension of the payroll tax cuts, each blaming the other side. But how do most Americans feel about the cuts?

Adriene Hill: Now, it's time for the Attitude Check. Every Thursday we touch base with the polling firm Gallup to find out what Americans are thinking about economic issues.

Today we thought we'd focus on the payroll tax cut, the most recent victim of Washington D.C.'s squabbling. If lawmakers can't come to an agreement by the end of the year, taxes for working Americans will go up.

Frank Newport is Gallup's editor-in-chief, and he's with us now. Good morning Frank.

Frank Newport: Good morning.

Hill: What do we know about Americans' support for the payroll tax cut?

Newport: You know, there hasn't been a lot of polling on that recently, but there have been a couple of polls that have been done by the Associated Press and the National Journal over the last month or so. And both of them showed exactly the same thing: 58 percent said they supported the idea of extending the payroll tax cut, and about a third said they opposed it. So on available evidence, it looks like the American public would say yes to the idea of extending the payroll tax cut

Hill: And what about how people will spend that money, and its impact on the economy?

Newport: You know, that's an excellent question -- and economists disagree on that. We don't have a lot of survey research -- you know, what would you do with an extra $40 a week, and what have you. Economists debate; some of them say this will be great for the economy, some of them say it wouldn't make much difference. We do know Americans actually on average think the amount of taxes they pay is about right, so I'm not sure it's going to make a huge difference as far as the average American is concerned.

Hill: What's the current fight in Washington, D.C. mean for consumer confidence?

Newport: It's potentially very negative for consumer confidence. And the reason I say that is, back in August -- July and August when we had the big debate over the debt ceiling -- we saw consumer confidence drop almost 20 points on our Gallup measure. So we are predicting that it possibly could do the same thing right now -- which is bad news, because consumers have actually been getting somewhat more positive. We've seen an upward slope on that, a positive slope.

We'll wait and see, but based on what we've seen before, this may not be good for consumer confidence -- which in turn, of course, wouldn't be good for the economy.

Hill: Frank Newport is Gallup's editor-in-chief. Thanks so much.

Newport: You bet.

About the author

Frank Newport, Ph.D., is the editor-in-chief at Gallup and appears regularly on Marketplace.
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I would have liked to see them poll asking
Should they extend the millionaires tax break?
Should they extend the SS tax break?
then ask
Should the budget be balanced?

All good questions. People don't seem to understand the increase in debt we face if we don't do one or both of two things:
Reduce the need to borrow by lowering expenses, and/or
Increase everyones taxes
Our debt now costs us $200 billion a year in interest and increasing every day
Just think what we could do with that money if we decrease the debt.

The poll should ask are you willing to keep your social security tax cut now for reduced benefits later with higher taxes for those benefits?

Good question!
They hide the fact that this is a tax for Social Security by naming it Payroll Tax.
Social security is threatened already by lack of funds. Extending the reduction just makes it worse.

Ms. Hill:
You say "Lawmakers in Washington continue to bicker over the extension of the payroll tax cuts, each blaming the other side."
But this is not true. What is true is that the pro-business, Tea Party wing of the Republican party has prevented the administration and the rest of congress from extending the payroll tax cuts. That would be an accurate lead in.
In my opinion, accurate reporting is hindered by so-called "balanced" reporting.
I'd be interested in your response to this.

Arthur Goldberg
artg at cs.nyu.edu

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