Senate Republican leader Mitch McConnell of Kentucky, who will lead the chamber as majority leader starting in January said Wednesday that tax reform is one priority he could pursue. But it’s unclear how the caucus he leads could possibly produce a tax reform that the public would support, given exit polling that indicates little interest among voters in the sort or revenue-neutral, rate-reducing tax overhaul that Republicans support.
Hart Research Associates conducted an exit poll for the AFL-CIO in states with key Senate races (Alaska, Arkansas, Colorado, Georgia, Iowa, Kansas, Kentucky, Louisiana, Michigan, North Carolina, New Hampshire).
Voters were asked, “Which one of the following do you think should be the higher priority for the president and Congress right now–(A) reducing taxes on businesses and individuals or (B) investing in key priorities like education, healthcare, and job creation?” A solid 67 percent said “investing in key priorities” and only 29 percent said “reducing taxes.”
It seems public opinion is particularly set against the idea tax reform that is revenue-neutral for corporations (which many Republicans and Democrats, including President Obama, have proposed).
To the question “What should revenue from closing corporate tax loopholes be used for?” 66 percent chose “reduce budget deficit and invest” while only 22 percent chose “reduce tax rate on corporations.”
And the public supports a worldwide tax system, which would subject American corporations’ profits to the same tax rates regardless of whether they are earned domestically or offshore. This is the very opposite of a territorial tax system, which would exempt the offshore profits of American corporations from U.S. taxes and which is the basis of Republican tax reform proposals.
A whopping 73 percent of voters said they would support “increasing taxes on the profits that American corporations make overseas, to ensure they pay as much on foreign profits as they do on profits made in the United States,” while only 21 percent said they would oppose this.
It’s not immediately obvious how pursuing his party’s unpopular positions on taxes could possibly be appealing for McConnell. But he may have no choice. In the House of Representatives, Paul Ryan will likely chair the Ways and Means Committee and could demand action on tax reform and force his hand.
Keep in mind that the tax reform proposal from the outgoing chairman, Dave Camp of Michigan, turned out to be a regressive $1.7 trillion tax cut and was abandoned by his caucus because it was thought to not cut taxes enough. Apparently House Republicans are determined to give away even more revenue and it’s unclear whether they would allow something as trivial as public opposition to change their plans.