Your Take on the Tax Cut


Readers of BusinessWeek Online aren't especially impressed with the latest Bush Administration tax cut -- and a majority doubt that it will be large enough to stimulate the economy much. That's a key finding from our July 22 Reader Survey.

Of the more than 1,000 readers who responded, about 67% say they're somewhat or very familiar with the provisions of the new tax law.

A little more than half regard the extra money they're getting as not very significant or insignificant. In fact, nearly 20% say they haven't noticed any extra income at all, vs. the nearly 13% who say they're getting an extra amount that's somewhat or very significant. About 19% say they'll spend any extra money they get right away, compared with 22% or so who say they'll save it for future spending.

HOW FAIR? Taken together, these responses may explain why readers generally don't expect the tax cut to pull the economy out of the doldrums. Only about 18% think the chances are good or very good that the cut will boost economic growth, while nearly 71% think the chances of that happening are either not very good or poor.

Those who participated seem well attuned to two other major issues that surfaced during the tax-package debate: Around 69% say the tax cut is pretty unfair or very unfair in the way it is being distributed among Americans of various income levels, vs. the 20% who think it's pretty or very fair.

Moreover, 72% think the tax cut is uncomfortably risky or too risky, given the country's large budget deficit at the moment, vs. the 16% who regard the tax reduction as not risky or only a little risky. Both reactions are especially interesting given that many of those who participated in the survey are in income groups that should benefit from the President's tax package: About 45% earn between $50,000 and $100,000 a year, while 30% earn more than $100,000 a year.

Here are the detailed results of the survey, which as always wasn't a scientific poll, since anyone who wished to could participate:

How familiar are you with the provisions of the new tax law?

Option

Total

%

Very familiar

275

27.23 %

Somewhat familiar

400

39.6 %

Familiar enough

187

18.51 %

Not very familiar

105

10.4 %

Not familiar at all

36

3.56 %

Not sure

7

0.69 %

Most likely, you've already noticed some change in your take-home pay as a result of the tax cut. Would you characterize the extra amount you're receiving as:

Option

Total

%

Very significant

34

3.36 %

Somewhat significant

100

9.89 %

Better than nothing

157

15.53 %

Not very significant

171

16.91 %

Insignificant

338

33.43 %

Haven't noticed any extra money

196

19.39 %

Not sure

15

1.48 %

What do you intend to do with the extra money?

Option

Total

%

Spend it on necessities

149

14.78 %

Spend it on discretionary items

51

5.06 %

Spend some and save some

152

15.08 %

Save it for future spending on necessities

145

14.38 %

Save it for future spending on discretionary items

79

7.84 %

Haven't noticed any extra money

369

36.61 %

Not sure

63

6.25 %

What do you think the chances are that the tax cut will boost economic growth?

Option

Total

%

Very good

82

8.09 %

Good

100

9.86 %

50-50

102

10.06 %

Not very good

211

20.81 %

Poor

505

49.8 %

Not sure

14

1.38 %

In terms of the benefit the Bush tax cut provides to Americans of various income levels, do you regard the tax package as:

Option

Total

%

Very fair

100

9.86 %

Pretty fair

107

10.55 %

Neither more fair nor less

74

7.30 %

Pretty unfair

164

16.17 %

Very unfair

538

53.06 %

Not sure

31

3.06 %

How would you assess the risk involved in issuing a large tax cut at a time when the U.S. is running the biggest budget deficit in its history?

Option

Total

%

It's not risky

92

9.12 %

It's a little risky

72

7.14 %

It's risky, but necessary

100

9.91 %

It's uncomfortably risky

201

19.92 %

It's too risky to do

531

52.63 %

Not sure

13

1.29 %

What's your annual income?

Option

Total

%

Less than $25,000

69

6.91 %

$25,000 to $49,999

188

18.84 %

$50,000 to $74,999

248

24.85 %

$75,000 to $99,999

195

19.54 %

$100,000 to $125,000

148

14.83 %

More than $125,000

150

15.03 %


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