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The Tax Foundation Tax Foundation_Episode15 …

Tags: aei, american enterprise institute, conventional wisdom, exit pollsters, harvard university, iraq war, karlyn bowman, kennedy school of government, managing editor, matter of fact, midterm elections, opinion polls, overwhelming majority, pocketbook, pollitics, public opinion, resident fellow, tax foundation, taxfoundation, vote,
Pages: 5
Language: english
Created: Tue Nov 21 15:28:45 2006

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The Tax Foundation Tax Foundation_Episode15 Page 1 of 5
Scott Hodge and Karlyn Bowman

Announcer: Welcome to the Tax Policy Podcast, produced by the Tax
Foundation in Washington. Visit us online at
www.taxfoundation.org.

Scott Hodge: Welcome. I'm Scott Hodge, President of the Tax Foundation. I
am pleased to have with me today Karlyn Bowman. Karlyn is a
Resident Fellow at the American Enterprise Institute. She edits
opinion polls for AEI and writes the column "POLLitics" for Roll
Call. Previously Karlyn has been the editor of American
Enterprise, managing editor for Public Opinion, and a Fellow at
the Kennedy School of Government at Harvard University.

Karlyn, thanks for joining me today.

Karlyn Bowman: Thank you for having me.

Scott Hodge: Well, we are a week out from the election and I suppose now that
the dust has settled, it is time to kind of objectively look at things.
I think the conventional wisdom has always been that elections,
especially midterm elections, are all about local politics. "All
politics is local," or "people vote with their pocketbook" and so
forth, but the Iraq War was really by and far the largest issue in
this election, wasn't it?

Karlyn Bowman: There is no question. And as a matter of fact, the exit pollsters
asked a question. They asked people, "Are local or national issues
more important to your vote this year?" And people said by an
overwhelming majority that national issues were more important to
their vote. And you are correct. It was the Iraq issue that washed
over everything else.

Scott Hodge: That said, obviously we have a new Democratic majority in both
the House and the Senate and they have come forth with an agenda
of their own--"Six for `06" I think they called it--an action plan.
And almost all of those issues in that "Six for `06" action plan are
all domestic issues. Is there a mandate that they can follow here?

Karlyn Bowman: Well that is a good point. I think the issues that they have
identified--implementing the 9/11 Commission's
recommendations, raising the minimum wage, dealing with
subsidies for big oil, and the like--those are pretty popular crowd
pleasing kinds of issues overall.

Scott Hodge: Poll tested maybe?

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Karlyn Bowman: I don't know whether they were a poll test or not. I wouldn't be
surprised since many things are in Washington these days, but
those ideas are pretty popular. And also I think another one is
dealing with the high cost of college tuition.

Scott Hodge: Well, that is kind of interesting. On the minimum wage issue
obviously there has been discussion and the y will tackle that
perhaps even first. Does that look possible or do you think that the
White House is just going to block that altogether?

Karlyn Bowman: I don't know whether the President, who has been very reluctant to
use the veto pen thus far, will veto this if presented to him.
Certainly it is an idea that has very strong popular support. When
Gallup started asking about the minimum wage in 1938, and the
public supported the idea then. I guess the belief being that there
should be a floor for people who were willing to work hard. And I
think in every poll I have seen the issue has enjoyed substantial
majority support. That is true today overall.

So I don't know how the President will approach this one. I don't
know whether the Democrats will accept some sort of amendments
that might make this easier for small businesses who are affected
profoundly by the minimum wage. That remains to be seen.

Scott Hodge: Well on the tax front, which seems to have fallen to the back of the
queue, I guess, is not really at the forefront of the debate. On the
other hand, Democrats have promised to fix the AMT and at the
same time however, they are promising to be fiscally responsible
and bring back the "pay as you go " rules, which would require a
tax increase somewhere else in order to offset the revenue from
fixing the AMT. Now to some degree this could require, if what I
am hearing is right, they would lift the taxes on some of the upper
income brackets to pay for AMT fix. Are Americans supportive of
this kind of thing? Do you see polls which they would support a
higher tax on the other guy behind the tree in order to pay for that
tax cut?

Karlyn Bowman: I think the public, as a general rule, is not very receptive or very
positive about tax increases. It is certainly true that they are more
positive about tax increases for the rich. But I was interested in the
new PSRA Newsweek poll released this morning, which asked
about what should be the top priority of the Democrats. And they
asked about ten or 12 different issues, things like increasing the
minimum wage was cited by 68 percent that should be a top
priority. Separately allowing the government to negotiate directly

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with pharmaceutical companies to lower drug prices--75 percent
said that that should be a top priority for the Democrats.

But then they were asked about rolling back some of the Bush tax
cuts, and only 40 percent said that that should be a top priority; that
probably is about the number of Democrats today. Thirty-
two percent said it sho uld be a lower priority, and 24 percent said it
shouldn't be done at all. So you can see just from this battery of
questions that asked people to rank various issues that it certainly
ranks lower then other issues overall.

Democrats wanted it to be a top priority--58 percent of Democrats
compared to only 20 percent of Republicans, and 35 percent of
Independents. So again you see the Democrats sort of standing
alone on that one overall in terms of the only group in which a
majority supports rolling back some of the Bush tax cuts.

So, if I were the Democrats, I don't think I would start there
because that is just not going to be a very popular idea. I think the
tax issue has changed a lot in the last five to ten years. I think a
politician who is seen as raising taxes still has a lot to fear, but at
least nationally though -- I think it is very different at the state and
local level -- at least nationally I am not sure that a politician, with
the exception of the Republican base, and that is a pretty big
exception, gains a lot from being seen as a tax cutter these days
overall.

Scott Hodge: How about the issue of tax reform? Senator Ron Wyden and
Congressman Rahm Emanual have put forward a Flat Fair Tax,
they call it. Obviously their goal is to make the tax code a little
more progressive, but at least they are talking about reform and
trying to simplify the tax system. Is that something that the basis
of a compromise can be made?

Karlyn Bowman: I actually think that Wyden is someone the Republicans can work
with on this issue overall. They are going to clearly have to. This
is something the Republicans have talked about for a long time, but
they clearly need Democratic allies, and I think Wyden would be
an important one if they move ahead on this. Tax reform doesn't
seem to me to have a lot of political sizzle. But that said, it is the
right thing to do and I think that many Americans, if they believed
it was really going to happen, they would be fairly enthusiastic
about it.

Scott Hodge: People are mentioning some of the poll numbers on allowing the
government to negotiate on prescription drugs. And obviously the

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Medicare prescription drug bill was the centerpiece of some, at
least for the Republican agenda a few years ago, and they thought
it would inoculate them on that issue. And yet we saw a couple of
congressmen go down, Clay Shaw in particular in Florida, and
Nancy Johnson in Connecticut. What happened on that issue? Did
that just simply backfire?

Karlyn Bowman: Well perhaps, surprisingly, seniors were the Republicans' best age
group in this election overall. They split pretty even for the
Democrats over the Republicans in the House vote overall. I think
a lot of Democrats thought that Medicare Part D was going to be a
real difficult issue for the Republicans, but it didn't turn out that
way. The polling suggested that of seniors who enrolled, first of
all, most of them didn't have a difficult time enrolling, and second,
we now have polls from the Kaiser Family Foundation saying that
three-quarters of the enrolled seniors would choose the same plan
over again.

So they seem to be pretty happy with the plan overall. I think it
probably had an affect in a couple of races, and you cited two that
are certainly ones that I would like to go back and look at more
carefully. But it wasn't a big plus for the Republicans, nor was it a
substantial minus.

Scott Hodge: Well, something has kind of troubled me throughout the last
couple months. And as you see good economic data after good
economic data on the unemployment rate coming down to really
the lowest level in a generation, and the stock market has hit well
over 12,000, and everything seems to be flying well, but the public
mood seems to be very bad. They seem to be perceiving the
economy as not being as good as the data would say it is. Where
does the disconnect come from?

Karlyn Bowman: I think the disconnect, perhaps surprisingly, comes from Iraq. Iraq
has such a powerful affect on public opinion and it tends to wash
over everything else, making us pessimistic about the economy,
pessimistic about a lot of things overall. Whenever we have troops
in harm's way as we do right now, I think the public is anxious and
I think that explains concerns about the economy overall. They are
just not appreciating the good news.

Scott Hodge: Looking forward, and obviously there is going to have to be
bipartisanship if anything is going to get done, and both sides are
talking about bipartisanship, and it seems the American people
kind of prefer to some degree split government. Am I right in
reading that or are they saying something else?

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Karlyn Bowman: I think they are. I think they would give probably two cheers for
divided government. If you ask the question about, "Do you prefer
to have one party control, or the White House controlled by one
party, and the Congress controlled by another?" most people say,
"Yes, I prefer divided government."

When you say, "or doesn't it really make much difference?"
again, opinion shifts and people are not sure it really makes a great
deal of difference. But I think they like the idea of one body
having a check on the President, and the President having a check
on the other body. So I think that is popular.

Scott Hodge: Well I guess as a last question I would kind of ask you about the
political color palette of the United States. Obviously for the last
couple of years people thought that the nation was turning red,
toward a more conservative voter base, and yet obviously,
Democrats carried the day on this election. Is America turning
purple?

Karlyn Bowman: Well, we know that the Democrats held their supporters, and the
Republicans held theirs. What we had was a significant increase in
the number of Independents turning out to vote. People in the
middle were always looking for new groups: soccer moms,
security moms, angry white males. What we had this time was the
familiar group that often makes a difference in elections, and that
is Independents, and they pulled the lever for Democrats this time,
and that has really been the story all year in public opinion. I think
we should have been more sensitive to that as we looked at the
numbers in February and March, that Independents were really
very sour on this administration, and that is the explanation for the
Democrats' victory.

Scott Hodge: Well it is certainly going to make next year and the year after very
interesting to watch and see which way it turns.

Karlyn Bowman: It will indeed.

Scott Hodge: Thank you so much Karlyn. I appreciate it.

Karlyn Bowman: Thank you.

Announcer: The Tax Policy podcast is produced by the Tax Foundation, a
nonpartisan, nonprofit tax research group that has monitored fiscal
policy at the federal, state, and local levels since 1937. Please help
support our programs by making a tax-deductible contribution at
www.taxfoundation.org.