New Poll Shows Voters Understand that Tax Hikes Will Increase Cost of Goods and Services, Harm Wages

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Posted by Isabelle Morales on Friday, May 7th, 2021, 1:50 PM PERMALINK

Voters understand that raising taxes on businesses will lower wages and increase the costs of goods and services, according to a recent poll by HarrisX commissioned by Americans for Tax Reform. 

58 percent of respondents said that raising taxes on businesses will harm the cost of goods and services, with 22 percent saying it would help the cost of goods and services, and 19 percent saying it would make no difference.  51 percent of respondents also said that raising taxes on businesses would harm wages, with 25 percent it would help wages, and 24 percent saying it would make no difference.

While Biden claims his tax hikes will be imposed on “large corporations,” they will also harm the American economy and working families.

For instance:

  • Biden’s tax hikes would eliminate one million jobs in the first two years and would eliminate 600,000 jobs per year over the first decade, according to a study by economists John W. Diamond and George R. Zodrow, commissioned by the National Association of Manufacturers. 
  • As noted by Stephen Entin of the Tax Foundation, workers bear 50 to 70 percent of the cost of a corporate tax through lower wages and fewer jobs. In this way, voters are correct to conclude that tax hikes will harm wages. 
  • A recent National Bureau of Economic Research paper found that increasing the corporate tax rate by one percentage point leads to a 0.17% increase in retail product prices. They also estimate that 31 percent of the corporate tax rate is borne by consumers through higher prices. Again, voters are correct to conclude that tax hikes will increase the costs of goods and services. 

 

These results are consistent with other polls indicating that voters understand the way tax hikes can harm working families, investment, and jobs. For example, 59 percent of voters said that raising taxes would cause jobs to be shipped overseas, while 60 percent of voters said it would cause jobs to be created overseas rather than in the United States. 

The poll was conducted by HarrisX between March 31 to April 6 among 4,577 registered voters. The margin of error of this poll is plus or minus 1.45% and the results reflect a nationally representative sample of U.S. adults weighted for age by gender, region, race/ethnicity, and income where necessary to align them with their actual proportions in the population.

Key findings include:  

Voter were asked if raising taxes on businesses help, harm or make no difference for the cost of goods and services. A majority of voters answered, “harm.” 

  • 58 percent of respondents said that raising taxes on businesses will harm the cost of goods and services, with 22 percent saying it would help the cost of goods and services, and 19 percent saying it would make no difference.  
  • 72 percent of Republicans indicated that raising taxes would harm costs, including 46 percent of Democrats and 56 percent of Independents. 
  • 63 percent of suburban residents said that tax hikes would harm costs, along with 70 percent of rural residents.  

 

Voter were asked if raising taxes on businesses help, harm or make no difference for wages. A majority of voters answered, “harm.” 

  • 51 percent of respondents said that raising taxes on businesses would harm wages, with 25 percent it would help wages, and 24 percent saying it would make no difference.
  • 55 percent of suburban voters indicated that raising taxes would harm wages, including 62 percent of rural voters. 
  • 57 percent of polltakers with “high knowledge” about taxes said that raising taxes on businesses would depress wages.  

 

Photo Credit: Zoetnet

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