What Do Americans Really Think About a Tax Hike?

THE debate over taxes resounds with conflicting arguments as to what the public wants done. Some insist that the country's views have shifted recently - becoming more receptive to raising taxes for deficit reduction and/or more ``investment'' in social services. Last week's California vote in favor of Proposition 111 - which mandates a gasoline tax increase targeted to transportation needs - is cited as evidence. Others maintain that resistance to taxes remains strong. My colleagues and I at the Roper Center have just completed an extensive review of available poll data on tax opinions. Here is what we found. First, it's not correct to say that Americans are ``against taxes.'' We want social services and a strong defense - and recognize we must be taxed for these things. But large majorities think that taxes are too high - higher than they need be to sustain desired services. There's no indication the proportion is now declining. The sense that taxes are excessive, set against services rendered, gets expressed in polls in a number of ways.

Asked ``out of every dollar the federal government collects in taxes, how many cents do you think are wasted?'' respondents to a May 1990 ABC News/Washington Post survey gave the average answer of $.46. Seventy percent of those interviewed in New Jersey last March by Rutgers' Eagleton Institute said that they pay too much for what they get from state and local taxes. Also in March, 78 percent interviewed in Massachusetts by KRC Communications Research rejected the argument that state taxes needed to be raised because all reasonable spending reductions had been made. A national survey taken in April 1988 by the Roper Organization found only 22 percent ready to describe federal income taxes as yielding good or excellent value. In contrast, 59 percent said they got good value for dollars spent on mail service, 48 percent on electricity, 44 percent on health insurance, 33 percent on auto insurance - and 25 percent on auto repairs! Such perceptions explain why ``no new taxes'' continues to have support.

At the same time the public wants services, and it considers the federal deficit a real problem - though not the most acute facing the country. So the mood nationally is to hold the line on taxes, rather than to reduce them. Asked by the Hart/Teeter Research Companies in a January 1990 whether the federal government should raise or lower taxes or keep them as they are, 58 percent opted for the current levels, only 28 percent for lowering taxes and 12 percent for raising them.

Given this mix of attitudes, it's a sudden rise in taxes that triggers tax protests. A jump in property taxes ignited the fabled California tax revolt of the 1970s. Today, too, states which have increased spending and taxes are experiencing tax angst. In Connecticut, per capita state and local government expenditures climbed 73 percent from 1982 through 1988, more than in any other state. And surveys taken by the University of Connecticut's Institute for Social Inquiry for the Hartford Courant now show huge corresponding increases in public dissatisfaction with taxes and spending. In early 1986, only 25 percent said state spending was too high (42 percent about right, 14 percent too low). Last month, 62 percent found it excessive (just 19 percent about right and 3 percent too low).

Another aspect of US tax attitudes is the similarity of views across social groups. The January 1990 NBC News/Wall Street Journal poll, for example, found 79 percent opposed to raising income tax rates for individuals, with the proportion the same in each income group. Though the 1986 tax reform legislation removed many low income persons from the federal income tax rolls altogether and reduced rates for the rest, surveys show no sign of the low income coming into conflict with the middle or high income on income taxes.

At the state level, the income tax remains highly unpopular - with surprising uniformity across social groups. For example, asked in a May 1990 survey taken for the Boston Globe whether ``in order to... balance the state budget (you would) rather see the state increase the income tax or broaden the sales tax,'' just 15 percent of Massachusetts residents with family incomes under $30,000 endorsed an income tax hike, compared to 46 percent a sales tax rise. Among those with incomes over $60,000, the respective percentages were 20 and 46.

For years now, some analysts have been expecting generational and income-group splits on Social Security - but nothing of the sort has emerged. For instance, asked early this year by Yankelovich Clancy Shulman whether they favored reducing Social Security taxes, 65 percent with incomes under $10,000 and 59 percent earning $50,000 and higher opposed such a reduction. Seventy percent of those ages 18-29, and 67 percent in the 50 to 64 cohort, rejected a Social Security tax reduction. Taxes would seem to be a natural issue for deep social group conflict. They're not that, though, in the US today. A politics of ``tax envy'' gains strikingly little support. ``No new taxes'' finds backing across class lines.