Higher Standard Deduction Popular With Voters

The Northam Administration’s plans to spend most of the additional revenue created by federal tax reform may not prove popular if the public understands the alternative plans for real tax relief under consideration.

Three weeks ago, I complained that a poll from the Judy Wason Ford Center at Christopher Newport University didn’t ask the right questions, so the Thomas Jefferson Institute for Public Policy paid Mason-Dixon Polling & Strategy to add a private question to its recent poll of 625 Virginians.  We added just the one question to clarify one aspect of the debate, with the results announced today.

The poll was in the field nearing its end when Governor Ralph Northam released his budget, which did indeed call for spending most of the federal tax change windfall over the next several years.  One way he proposes to spend it is by expanding the existing state Earned Income Tax Credit into a program which pays cash grants to low-income Virginians.  Is that expanding an existing program?  Close enough.

So, the choice in this question was keep and spend it on programs or give it back by doubling the state’s standard deduction.  Once Virginia conforms, up to 2.8 million tax returns are expected to use the standard deduction. That tax reform idea was chosen because it is the Thomas Jefferson Institute proposal, and because the CNU questionnaire provided the choices of a broad based (but undefined) tax cut or a targeted tax credit, with no mention of the state keeping the bread.  

The question Thomas Jefferson Institute posed through Mason-Dixon

With overall support for giving the money back through the standard deduction at 59 percent in response to our question, and with support reaching into the 60 percent plus range in some regions and among those 35-49 years in age, that’s a popular approach.  Support for keeping and spending the money was 28 percent overall and topped out at 36 percent in the Richmond region and among the youngest voters,  and at 41 percent among black voters.  The full report from Mason-Dixon is here.

As today’s earlier EITC discussion demonstrated (two posts back), this whole process has already blown past facts and moved straight into political posturing.  Democrats are starting to drag President Donald Trump into the discussion, because it was his tax changes which set up the whole scenario.  Republicans on the other hand can’t stop tweeting about the Northam tax increase.  The real blame rests squarely with the General Assembly in toto, which punted on this in 2018 and may yet bollix this opportunity in 2019.

Having spent six months writing and talking about conformity, the federal Tax Cuts and Jobs Act and tax policy proposals, it is clear only a handful of people understand this, half of them CPAs.  Most people’s eyes just glaze over.  So as wrong as it is, we might as well decide this based on polling.

A practiced politician would look at first the CNU poll, and then this single additional question, and conclude returning the money is the smart play.  A failure to pass something broad based that counteracts the impact of the inadvertent state tax increase will be punished at the polls.  I further submit that promises made as something passes in February, which do not match with reality when tax returns are filed in May, will also irritate voters.  Don’t promise relief for the middle class and actually leave them out.

Its not my usual practice to post two items on the same general topic on the same day, but this is my last chance for a week.  It has been an interesting start, dear readers, with almost 120 posts for 2018.  I appreciate those who do read these musing, and even more those who spread them around with the forward button.  Enjoy the rest of your holiday!

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18 responses to “Higher Standard Deduction Popular With Voters

  1. ” The real blame rests squarely with the General Assembly in toto, which punted on this in 2018 and may yet bollix this opportunity in 2019.”

    Even NOW – all they seem capable of is the same demagoguing the did last election.. trying to understand what they are FOR as opposed to demonizing others – is a hard thing! But then this is the same party that did nothing about the MedicAid Expansion other than demonize it – and their best effort at coming up with a competitive candidate for the Senate – also was less than impressive.

    My guess is that even if you did put poll questions in explicit form – the folks in blue urban areas would still support the EITC –

    The trouble with Steve is that he’s got a Richmond Conservative mindset!

    Like many Conservatives he doesn’t like paying for others… (not that I do either…) but the reality is that about 48% of folks support Univeral Basic Income and they do know what it is. You can bet if you subtract out the rural more conservative geography the numbers go higher.

    So my guess is that Virginia’s urban areas support the EITC as well as UBI – and Universal healthcare.!

    • Universal Basic Income. Of course people who think they can get some of their neighbor’s money will support this. It’s really not much more than legalized theft.

      Human nature requires us to work for a living. While some people can’t since they are infants, children, severely disabled, infirm or elderly, most of us can. The left-wing of the Democrats want to screw up humanity even more than they have already.

      • Excellent observation. There is a corollary. In the 1950’s and 1960s, relatively few middle and upper middle class wives and mother’s worked outside their home or farm. Often, if they did try to work, their husbands would take offense, fearing that having a wife who worked was evidence to the outside world that he, as a man, was unable to fully support his family by his own labor. This, of course, discouraged married women from work in the outside world.

        But there was a double whammy. Married middle and upper class women who did not work would often try to shame those married women who choose to go out into the world, even though there was no financial need for them to work? Why this shaming by non-working well off married women of their sisters who broke the mold? I was never quite sure. Particularly so because many such women had worked during WW2, but snapped back into their old cultural ways after the war. And now they shamed their sister who did not snap back along with them.

        Perhaps it was jealously, or envy, or fear of another married women out rampaging around a man’s world, doing evil deeds or trying to. Likely there is also biology at play here. Even today, men who work, and successfully so, still get by far the largest share of all the prizes in the world, ladies included, despite what you hear to the contrary. And there is a fierce cultural battle going on about this, and the elites, battle has turned dramatically back into the “old ways”, while disadvantaged and the middle classes are continuing to spin downward out of control, into a sort of modern day version of Hell on earth.

        Why?

        Perhaps, by way of paradox, these “old fashioned truths” are still at play today. So certain people who work are being disrespected, ignored, trampled on, and regularly insulted, called names, and stereotyped in demeaning ways. Most especially middle class males, and also disadvantaged males, they too are now often encouraged not to work or to succeed in the outside world, but to rely on handouts from government, while the same government bids for their single mother’s vote, and the vote of single women too, encouraging them not to marry at all, the government will take care of them as well, a government run by elite males.

        So the world has changed, drastically so, is even upside down. But I suspect likely it really underneath has not changed that much. The same primal forces of human nature are still at work, just in different disguises, with different consequences, but still designed to achieve the same old fashioned goals – power, money, and control over others.

  2. As mentioned under your earlier post on this subject: Sen. Stuart needs to crank up his outreach on doubling the standard deduction and why that’s the better approach for the reasons you clarify. Thank you for sorting through what the WaPo article clearly did not.

    I don’t agree this is an urban-vs-rural issue. Yes, the urban areas support the basic concept of the EITC as a matter of fairness, but they also support a fair distribution of the federal tax realignment that includes people earning over $30K — which is most urban dwellers. And, demographically, our urban population is our future.

  3. re: ” Yes, the urban areas support the basic concept of the EITC as a matter of fairness, but they also support a fair distribution of the federal tax realignment”

    I think if you said they had to choose – seems like a poll asked that – that NoVa folks would choose the EITC – and the irony is this:

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    so the GOP is opposed and it would benefit their constituency and the Dems being the bleeding hearts they are – support it – even though it does impact urban middle/upper income earners!

  4. Looks like nothing in the stocking for itemizers, who seem to the ones who will be asked to pay for these other ideas.

    What are we expecting schedule wise, some discussion and vote when GA convenes 9-Jan? We do need to get some Va. tax forms for tax filing.

    • An extra 6 grand in standard deduction will help if you choose to go that route. Sorry. Itemizers have not been frozen in place 30 years like the standard deduction. They’ve been screwed long enough.

      If they divide the issues, conformity and tax policy, any tax policy bill will run the whole table all the way to the Veto Session, probably.

  5. So we are already socialists? We’re in socialism/communism not capitalism? Sure looks like it. Russia and China are probably laughing their heads off. Venezuelans can look elsewhere.

  6. Anyone who thinks we’re not socialists will get a gentle reality check by visiting the Virginia DMV! Once there – it don’t matter if you are a PHD or a college dropout – a convicted Felon or a Priest or an “itemizer” or an entitlement “taker”.

    Take a number and sit down and wait until you are called and once you are called – everyone gets the SAME treatment!

    The term “socialism”is another one of those silly words we use in politics these days anyhow.

    EVEN Republicans support the concept of the EITC !!! And now days they support EVERYONE not being denied insurance because of “pre-existing” conditions!

    Even a third of Republicans support universal basic income!

    It just seems like if we are not going to deny folks things like education, healthcare, public roads, etc… we’re essentially already “socialists” by strict political definitions.

    We talk long and hard about Greece and Venezuela but all of the OECD countries around the world European and Asian – the gold standard of Socialism!

    In fact , the primary difference between developed countries and 3rd world countries is some level of universal health care!

  7. I’m glad the VA politicians are keeping the money and spending it. It’s a healthy lesson for voters. When you decide to go the route of the New Blue Wave Deal it is going to cost money. You want “free” health care and college then you have to give up that tax return check each year and may have to send one to the government. 30 trillion doesn’t grown on trees. It’s fine to decide you want society to go in that direction, but it costs real money and you may need to give up Apple, Patagonia, lattes, and granite countertops.

  8. Speaking of not asking the right questions, Steve, I would suggest you have done the same thing! You have created a binary choice: “Keep and spend it on programs or give it back by doubling the state’s standard deduction.”

    But there’s a third choice: Keep the money and use it to repair the state’s balance sheet so it can better survive the next recession.

    • At which time they will spend it preserve programs. Your point? Question remains valid.

    • I have a better idea. Keep taxpayers whole, do not conduct a stealth tax increase until the proposal to increase state tax is adopted by normal GA deliberation and debate.

      • P.S.- Here’s when the **** might hit the fan:

        In a few months, when Va. taxpayers start filing taxes:
        (1) and realize they must take a loss on federal tax (by itemizing) because failure to itemize results in a big tax loss in Virginia; or
        (2) or they do not realize #1 and later realize they made a mistake and have to decide if they want to file ammended returns

        Givng higher standard is tactic to make some people happy so the losers lose traction on their complaint.

  9. Any/all of these alternatives could well be the Va GOP position and to be honest, I’m surprised they’ve not staked out a position and gone public with it!

    I suspect Northam is expecting to not get everything he asks for – he’ll have to negotiate… and if the GOP has a hard line – Northam may have to fold.

    but again….. is the GOP just waiting for the most oportune time to do their thing?

    I know the GOP is a mess in Va right now… but surely there are some who are still of sound mind!

    • Of sound mind? Like their federal counterparts who just have to have that Wall?

      • well some of them are of sound mind but don’t have backbones and are willing to stand up for the facts and truth… of which 2/3 of our “illegals” are actually ones that overstayed their Visas… don’t have valid work vista but employers routinely hire them anyhow..

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