Are the Germans and French Really More Hostile to Big Government than Americans?!?

I always view polling data with a bit of skepticism, but I'm nonetheless embarrassed by new data from a 22-nation poll showing that German and French respondents are even more opposed to so-called stimulus spending than American respondents. If Americans are to the left of Europeans on size-of-government issues, that does not bode well for our future. On the other had, at least we're not as naive and/or stupid as Egyptians, Mexicans, Russians, Indonesians, and Nigerians. Here's a blurb from the summary.

In 14 of 22 countries most people--on average 56 per cent--favour an increase in government spending to stimulate the economy. This includes large majorities of Egyptians (91%), Mexicans (80%), Russians and Indonesians (both 78%), and Nigerians (73%). But majorities are opposed in a number of industrialised countries that had large stimulus programmes--Germany (66%), France (63%) and the US (58%).

The good news from the poll is that a majority of people around the world recognize that governments waste money at alarming rates. Americans think that 55 percent of their taxes are squandered. The Spanish, for inexplicable reasons, are most likely to think money is not wasted (perhaps because most of them have their snouts in the pubic trough?).

People believe that their government misspends more than half the money they pay in tax, according to the findings of a new BBC World Service global poll across 22 countries--but many are still looking to government to play a more active economic role. The poll of more than 22,000 people, conducted by GlobeScan/PIPA, found that people estimated on average that 52 per cent of the money they pay in tax is not used in ways that serve the interests and values of the people of their country. ...The countries with the lowest average estimate of misspent tax money were Spain (average 34% misspent), Indonesia (40%), Azerbaijan and Egypt (both 42%). The highest were in Columbia (74% misspent) and Pakistan (69%). In the world's two largest economies, Americans estimate on average that 55 per cent of their taxes are misspent, while in China the figure is 46 per cent. ...As well as being less likely to support action to address the deficit, those who have the highest estimates of tax misspending are less likely to support government stimulus spending--among those who think that more than three-quarters of their tax money is misspent, only 47 per cent believe the government should spend to stimulate the economy.

The full report can be read here.

More than Two-to-One Support for Personal Retirement Accounts

I am pleasantly shocked to see that a healthy majority of respondents favor partial privatization of Social Security. I knew support was reasonably strong several years ago, but I feared that the financial crisis would have made Americans more leery of financial markets. I also wondered whether the idea was discredited by its association with the Bush Administration. But a new Pew survey shows very good results, so maybe Republicans will feel more comfortable about developing a "secret plan" for Social Security reform.

...a majority favors a proposal to allow some private investments in Social Security... The latest Pew Research/National Journal Congressional Connection poll, sponsored by SHRM, conducted Sept. 9-12 among 1,001 adults, finds that 58% favor a proposal that would allow workers younger than age 55 to invest a portion of their Social Security taxes in personal retirement accounts that would rise and fall with the markets; 28% oppose this proposal. Majorities across all age groups -- except for those ages 65 and older -- favor this proposal. ...Support for the general concept is comparable to support for a similar plan advocated by former President George W. Bush in 2004. As he sought reelection in the fall of 2004, 58% of registered voters that September favored allowing younger workers to invest a portion of their Social Security; 26% said they opposed this change. However, after Bush won reelection and debate about the proposal began, support weakened. By March 2005, the public was largely split (44% favor, 40% oppose) and the proposal was not enacted.

P.S. The same poll shows that people are not sympathetic, however, to reforming Medicare, however, so the Social Security silver cloud does have a dark lining.

The Political Elite vs America

The folks at Rasmussen Reports have done a great thing by splitting polling data by a new demographic - the political class compared to everyone else. In other words, instead of just telling us about different polling results based on factors such as race and sex, Rasmussen also tells us how polls differ based on a split that could be characterized as insiders vs outsiders. A stark example is the new poll on whether there should be any limits to federal government power. As this excerpt indicates, regular voters say yes by an astounding 94-3 margin, while 54 percent of the political class thinks there should be no limits to federal government power.

Eighty-six percent (86%) of voters nationwide say there should be "limits on what the federal government can do." A new Rasmussen Reports national telephone survey finds that only nine percent (9%) believe the federal government should be allowed to do most anything in this country. These views are overwhelming shared across virtually all partisan and demographic lines. The only exception is America’s Political Class. By a 54% to 43% margin, the Political Class believes the federal government should be allowed to do most anything. Mainstream voters reject that view by a 94% to three percent (3%) margin.

Maybe the French Aren't So Bad After All

I like poking fun at French politicians for being hopeless statists, and I always assumed that French voters shared their collectivist sympathies. But according to new polling data reported by the Financial Times, there may be a Tea Party revolt brewing in France. Among major European nations, the French are most in favor of smaller government. Sacre Bleu!

European governments have solid public support, at least for now, for the spending cuts they are making in an effort to boost economic recovery, according to the latest Financial Times/Harris opinion poll. ...The poll’s results point to a fiscal conservatism among the European public that contrasts with the eagerness with which most governments ran up high deficits to protect jobs and living standards as the crisis unfolded. ...Asked if public spending cuts were necessary to help long-term economic recovery, 84 per cent of French people, 71 per cent of Spaniards, 69 per cent of Britons, 67 per cent of Germans and 61 per cent of Italians answered Yes. ...Asked if they preferred public spending cuts or tax rises as a way to reduce budget deficits and national debts, strong majorities in the five EU countries as well as the US were in favour of spending cuts. Similarly conservative views on public expenditure emerged when people were asked if EU governments were right to engage in large-scale deficit-spending after the 2008 crisis. In all five EU countries, a majority – ranging from 68 per cent in France and Italy to 54 per cent in the UK – said the governments were wrong to have done so.

Good Polling Data

I certainly don't think public policy should be based on polling data, but I always am happy when the American people are on the right side of an issue since it increases the possibility of good outcomes in Washington. Here are some very encouraging results from a Rasmussen poll on taxes.

The latest Rasmussen Reports national telephone survey of Adults shows that only 19% would be willing to pay higher taxes to avoid layoffs of state employees. Sixty-nine percent (69%) say they would not be willing to pay more in taxes for this reason. Another 11% are undecided. Adults feel similarly when it comes to funding entitlement programs. Twenty-two percent (22%) would pay higher taxes to prevent cuts in entitlement programs for low-income Americans. Sixty-three percent (63%) say they would not pay more to keep these programs afloat. Another 15% are undecided.

Taxpayers vs Bureaucrats, Part XXIV

Here's some more good polling data from the Resurgent Republic website. All demographic groups, including Democrats, agree that excessive pay for federal bureaucrats is a bad thing. Maybe, just maybe, this means the productive people in society are fed up and will successfully fight back:

Voters think higher average pay and benefit packages for federal government workers than for private sector workers is a bad thing for our country. Overall, voters say having higher average pay and benefit packages for federal workers than for private sector workers is a bad thing by a 62 to 19 percent margin, including a 47 to 30 percent margin among Democrats, a 65 to 14 percent margin among Independents, and a 77 to 12 percent margin among Republicans.

Encouraging Polling Data

I realize that public opinion polls are quirky and that answers often depend on how questions are phrased. Nonetheless, these results seem very strong.

As reported on the Bankrupting America website, there is more than three-to-one opposition against a value-added tax:

Voters think a value added tax, or VAT, is a bad idea for America. Respondents were asked which of the following statements they agree with: A value added tax is a good idea. It could raise billions of dollars in new revenue for the federal government, reduce the federal deficit without raising income taxes, and would be paid only by people who purchase certain products. [or] A value added tax is a bad idea for America. It would be a massive hidden tax that would not appear on a bill, it would increase the price of almost everything, it would be paid primarily by the middle class, and it would hurt our economic recovery. Voters think a VAT is a bad idea by 67 to 21 percent, including 53 to 31 percent among Democrats, 67 to 19 percent among Independents, and 82 to 12 percent among Republicans.

And the Rasmussen website shows more than four-in-five voters say the deficit exists because of too much spending and nearly six-in-ten recognize that new taxes would simply lead to new spending:

Only 18% of Americans are willing to pay higher taxes to lower the federal budget deficit, according to a new Rasmussen Reports national telephone survey. Sixty-nine percent (69%) are not willing to have their taxes raised to deal with deficits that are projected to rise to historic levels over the next decade. Thirteen percent (13%) more are not sure. ...Eighty-three percent (83%) of Americans say the size of the federal budget deficit is due more to the unwillingness of politicians to cut government spending than to the reluctance of taxpayers to pay more in taxes. Sixty-six percent (66%) of Americans already believe the country is overtaxed... Even if the president and Congress raise taxes to reduce the federal deficit, 58% of voters think they are more likely to spend the money on new government programs.

Last but not least, here are Rasumussen results showing voters recognize that higher taxes and higher spending hurt economic performance:

3* Do tax cuts help the economy, hurt the economy, or have no impact on the economy?

57% Help
19% Hurt
12% No impact
12% Not sure

4* Do increases in government spending help the economy, hurt the economy, or have no impact on the economy?

25% Help
56% Hurt
9% No impact
9% Not sure

5* Do decreases in government spending help the economy, hurt the economy, or have no impact on the economy?

52% Help
25% Hurt
11% No impact
11% Not sure

Don't Give Up on the American People...at Least not Yet

Gloominess and despair are not uncommon traits among supporters of limited government - and with good reason. Government has grown rapidly in recent years and it is expected to get much bigger in the future. To make matters worse, it seems that the deck is stacked against reforms to restrain government. One problem is that 47 percent of Americans are exempt from paying income taxes, which presumably means they no longer have any incentive to resist big government. Mark Steyn recently wrote a very depressing column for National Review Online about this phenomenon, noting that, "By 2012, America could be holding the first federal election in which a majority of the population will be able to vote themselves more government lollipops paid for by the ever shrinking minority of the population still dumb enough to be net contributors to the federal treasury." Walter Williams, meanwhile, has a new column speculating on whether this cripple the battle for freedom:

According to the Tax Policy Center, a Washington, D.C., research organization, nearly half of U.S. households will pay no federal income taxes for 2009...because their incomes are too low or they have higher income but credits, deductions and exemptions that relieve them of tax liability. This lack of income tax liability stands in stark contrast to the top 10 percent of earners, those households earning an average of $366,400 in 2006, who paid about 73 percent of federal income taxes. ...Let's not dwell on the fairness of such an arrangement for financing the activities of the federal government. Instead, let's ask what kind of incentives and results such an arrangement produces and ask ourselves whether these results are good for our country. ...Having 121 million Americans completely outside the federal income tax system, it's like throwing chum to political sharks. These Americans become a natural spending constituency for big-spending politicians. After all, if you have no income tax liability, how much do you care about deficits, how much Congress spends and the level of taxation?

Steyn and Williams are right to worry, but the situation is not as grim as it seems for the simple reason that a good portion of the American people know the difference between right and wrong. Consider some of the recent polling data from Rasmussen, which found that "Sixty-six percent (66%) believe that America is overtaxed. Only 25% disagree. Lower income voters are more likely than others to believe the nation is overtaxed" and "75% of voters nationwide say the average American should pay no more than 20% of their income in taxes." These numbers contradict the hypothesis that 47 percent of Americans (those that don't pay income tax) are automatic supporters of class-warfare policy.

So why are the supposed free-riders not signing on to the Obama-Reid-Pelosi agenda? There are probably several reasons, including the fact that many Americans believe in upward mobility, so even if their incomes currently are too low to pay income tax, they aspire to earn more in the future and don't want higher tax rates on the rich to serve as a barrier. I'm not a polling expert, but I also suspect there's a moral component to these numbers. There's no way to prove this assertion, but I am quite sure that the vast majority of hard-working Americans with modest incomes would never even contemplate breaking into a rich neighbor's house and stealing the family jewelry. So it is perfectly logical that they wouldn't support using the IRS as a middleman to do the same thing.

A few final tax observations:

The hostility to taxation also represents opposition to big government (at least in theory). Rasumssen also recently found that, "Just 23% of U.S. voters say they prefer a more active government with more services and higher taxes over one with fewer services and lower taxes. ...Two-thirds (66%) of voters prefer a government with fewer services and lower taxes."

There is a giant divide between the political elite and ordinary Americans. Rasmussen's polling revealed that, "Eighty-one percent (81%) of Mainstream American voters believe the nation is overtaxed, while 74% of those in the Political Class disagree."

Voters do not want a value-added tax or any other form of national sales tax. They are not against the idea as a theoretical concept, but they wisely recognize the politicians are greedy and untrustworthy. Rasumussen found that "just 26% of all voters think that it is even somewhat likely the government would cut income taxes after implementing a sales tax. Sixty-six percent (66%) believe it’s unlikely to happen."

Fiscal restraint is a necessary precondition for any pro-growth tax reform. If given a choice between a flat tax, national sales tax, value-added tax, or the current system, many Americans want reform, but it is very difficult to have a good tax system if the burden of government spending is rising. Likewise, it would be very easy to have a good tax system if we had a federal government that was limited to the duties outlined in Article I, Section VIII, of the Constitution.

Republicans should never acquiesce to higher taxes. All these good numbers and optimistic findings are dependent on voters facing a clear choice between higher taxes and bigger government vs lower taxes and limited government. If Republicans inside the beltway get seduced into a "budget summit" where taxes are "on the table," that creates a very unhealthy dynamic where voters instinctively try to protect themselves by supporting taxes on somebody else - and the rich are the easiest target.

Last but not least, I can't resist pointing out that I am part of a debate for U.S. News & World Report on the flat tax vs. the current system. For those of you who have an opinion on this matter, don't hesitate to cast a vote.