When it comes to U.S. manufacturing jobs, Americans favor using both carrots and sticks, but far more support the punishment than the enticement.
In a new Washington Post-ABC News poll, nearly three quarters of the public supports changing tax policy to make it more expensive for businesses to move manufacturing jobs overseas. But the public offers less resounding support — 51 to 44 percent — to giving tax breaks to bring jobs back to the country.
Reviving manufacturing in the United States has been a popular campaign theme for both Democrats and Republicans. President Obama and the Republicans’ leading candidate, Mitt Romney, differ on the corporate tax system generally.
In his recent State of the Union Address, Obama said that, “if you’re a business that wants to outsource jobs, you shouldn’t get a tax deduction for doing it.” He suggested those taxes should be used to cover moving expenses for companies that bring jobs back to this country.
Romney’s platform calls for lowering the corporate tax rate overall to be more competitive with other countries and encourage companies to bring operations back to this country.
In the poll, seven in 10 or more Americans of all partisan stripes support increased taxes on businesses that outsource manufacturing jobs. But the divide is more pronounced for offering tax breaks, especially among proponents and opponents of the tea party political movement. By 55 to 40 percent, tea party supporters would like to see tax cuts for businesses returning manufacturing jobs. Tea party opponents divide 46 to 50 percent in opposition.
The most supportive of any demographic group are higher income individuals. By nearly 2 to 1, those with incomes above $75,000 support such tax breaks. Those with lower income divide about evenly.
Cutting capital gains tax not a slam dunk
In the abstract, public sentiment is unconvinced on whether to cut or raise the capital gains tax -- profits from interest income or the sale of stocks and bonds -- among other things. But with more information, the idea of increasing taxes on capital gains becomes more popular.
Without any description of the going rate, over half, 55 percent, say taxes on capital gains should be kept about the same. Just one in five say they should be increased, with 14 percent holding out for a tax cut in this area.
But opinions are not firmly held and subject to change based on new information. When informed that the current rate on capital gains are lower than most income tax rates, there is a 16 percentage point spike in the number who would like to increase that rate.
With that additional information, the public splits about evenly between increasing the rates and keeping them the same, 36 and 38 percent respectively. The shift toward increasing the capital gains tax when people are offered more information is fairly broad-based.
The capital gains tax is highlighted by Romney’s struggles to explain his own tax rate. When asked about his 2010 tax situation, when he paid a rate of about 14 percent on about 22 million dollars in income, two-thirds of the public thinks he hasn’t paid his fair share. Up to 50 percent feel strongly that he is not paying his fair share.
Romney qualifies for this relatively low tax rate because his income is mostly in the form of capital gains. Romney’s tax policy calls for eliminating taxes on interest and capital gains for people who earn less than $200,000 a year.
Last fall, Obama proposed a “Buffett Rule” to reform the tax code, named in recognition of the notion that billionaire Warren Buffett’s secretary pays a lower effective tax rate than her employer. The proposal would raise taxes on millionaires so they would pay a similar tax rate on interest income as on income from wages.
Democrats are among the most likely to want an increase in that tax rate, going from about a third initially to about half with the added information. Republicans and independents are also convinced to increase the tax, but less so than Democrats; 21 percent for Republicans and 34 percent for independents overall.