Monday, August 1, 2011

But Americans Want It!

“Poll after poll suggests that Americans prefer the president’s call for a mix of spending cuts and tax increases to the Republican Party’s anti-tax approach.” – Ross Douthat in his Op-Ed in today’s New York Times

This is an argument that we hear over and over again from the “tax the rich” crowd (President Obama, New York Times, Bill Maher, etc.), but it’s an incredibly weak argument and fails the test of logic.

For starters, it’s a stretch to say that the results “suggest” that Americans prefer a mix of spending and tax increases.

50% responded that the deficit is best reduced with only/mostly spending cuts, while only 11% respond that the deficit is best reduced with only/mostly tax increases. To me, this “suggests” that tax increases aren’t very popular. Additionally, given the fact that the President continues his sharp rhetoric for “millionaires and billionaires” and “huge corporations” paying higher taxes, it would be reasonable to assume that 98% of those who replied “mostly with spending cuts” (30%) and many who replied ”equally with spending cuts and tax increases” (32%) support raising someone else’s taxes, not their own. Which leads to my next point…

It’s a flawed analysis of responses to an incomplete survey question. 

Does it surprise anyone that Americans prefer that someone else pay more taxes to reduce the deficit? It shouldn’t. I wonder what the results would be if we changed “Equally with spending cuts and tax increases” to “Equally with spending cuts and an increase in my taxes”? How many people would change their mind if it was their own money being used to reduce the deficit created in Washington, and not just "milionaire and billionaire" money?

Simple analogies illustrate the flawed analysis. What if we polled everyone in line at the post office (where we know there will be a statistically significant sample) and asked them "who should pay for your postage?" The multiple choice question has two answers – “I should pay for my postage” and “Millionaires and billionaires should pay for my postage”. I guarantee the poll would “suggest” that Americans prefer that "millionaires and billionaires" pay for their postage.

Would it then be logically sound to use those poll results as an argument for forcing "millionaires and billionaires" to pay for the postage charges of the rest of the populiation? How about a poll asking “Would you prefer to pay for pizza on Friday’s or have free pizza on Friday's?” Again, I guarantee that poll would “suggest” that we pass legislation requiring Free Pizza Friday’s across the country, because, hey, poll data suggests that Americans prefer free pizza.

As we've mentioned before, we're not necessarily opposed to tax increases, but we'd prefer tax policy to be based on sound economic theory and evidence, not poorly constructed public opinion polls, which as we've shown above, will always "suggest" that someone else pick up the tab.


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