Democrats may enact higher taxes on wealthy households and corporations in order to pay for workforce investments, and a new survey by HuffPost and Data for Progress suggests the increases would be broadly popular.
The top tax rate for household income would go from 37% to 39.6% under the Democrats’ plan, an idea favored by 61% of voters, including 41% of Republicans. Similar percentages of voters like the sound of the top corporate tax rate going up from 21% to 26.5%, as well as a higher tax on investment income known as capital gains.
A smaller 55% majority of voters said they strongly or somewhat support taxing assets gained through inheritance worth more than $1 million ― an idea Democrats in the House of Representatives dropped from an earlier proposal by President Joe Biden.
Data for Progress, a progressive polling and strategy organization, conducted the survey of 1,346 likely voters from Sept. 15 to Sept. 17. The poll described the tax increases as funding “new government investments in America’s infrastructure, workforce and families.”
The proposals received strong support from Democrats and independents, and were popular among people of different ages, races and educational backgrounds. They were generally underwater with Republicans by small margins.
It’s not surprising that the proposed tax increases are popular. For decades, Americans have consistently told Gallup pollsters that upper-income people pay too little in federal taxes.
But tax hikes are more controversial among lawmakers on Capitol Hill, where Republicans are 100% opposed and Democrats are struggling to figure out which ideas can win the most support in the House and Senate.
Democrats control the Senate with just 50 seats and the vice president serving as tiebreaker, meaning they need unanimous party support to pass any element of their agenda. And they can only lose three Democratic votes on the House side.
The proposed tax on inheritable assets shows the challenge facing party leaders. A small number of House and Senate Democrats refuse to support closing a loophole that allows family dynasties to avoid taxes on investment income for generations. The main criticism of imposing a tax on appreciated assets is that it would hurt family farms ― even though the Biden proposal would allow farms to defer paying the tax indefinitely.
As a possible alternative, Sen. Ron Wyden (D-Ore.) proposed a 2% tax on stock buybacks, which corporate executives use to boost the value of company shares ― which also happen to be a major part of executive compensation.
Fifty-eight percent of likely voters said they would support a stock buyback tax, though 18% of respondents said they didn’t have an opinion, suggesting voters are less familiar with the concept.