Talking About Taxes

Chris from Left Center Left had a very thoughtful post last week about the need for Democrats in Massachusetts to appeal to unenrolled voters, particularly on the issue of taxes. I disagree with Chris on who unenrolled voters actually are -- I think he makes the mistake that they are synonymous with centrists which obscures the fact that they are, in the aggregate, more aligned with state Democrats on policy issues than state Republicans (such as they are). I was rummaging around the Internet looking for 2002 exit polls, which were not released that year, to prove my assertion and found instead the quality of life survey sponsored by MassINC in 2003. After reading through that, I am beginning to think that Chris is right that "independent voters don't trust us progressives to decide the appropriate tax rate or even to insist on government services." In fact I think he understates the problem -- voters of any stripe may not trust the state government in general to decide the tax rate or deliver services.

Taxes ranked fifth among "areas that need major improvement" in that survey, behind affordable housing, traffic, health care and the cost of a college education. What's interesting to me, though, is that the respondents most likely to think that average families need major tax relief were minorities (57%), working mothers (57%) and those who identified themselves as working class or poor (54%). Of course, those subsamples are subject to larger margins of error given the smaller number of people in those categories than the entire sample, but it does make sense that those with the least amount of disposable income would be concerned about holding on to as much of it as possible.

That said, these three groups are not exactly your core Republican constituencies, so finding that a tax message could resonate with them particularly is concerning. Overall, Democrats polled were more likely than Republicans to indicate that major improvements were needed in all those areas aside from taxes. Independents were more similar to Democrats in those areas as well, and on taxes Republicans were only marginally more likely than both Democrats and Independents to think that major improvement was needed to decrease the tax burden.

That's not to say, of course, that taxes are not an important issue. In the survey, 79% of respondents claimed that the amount of taxes an average family had to pay needed either "major" or "some" improvement (as opposed to "satisfactory as is" or "more than satisfactory as is"). That's a lot of people, but it's smaller than those who want to improve the traffic situation or want affordable housing. In addition, 79% of the respondents also wanted to improve "the way the political system is working."

So, how do three year old survey results inform the 2006 elections? Well, one thing's for sure: if people were concerned about the cost of living then, they're probably even more concerned today after the cost of heating oil has skyrocketed.

Democrats have to worry that when the focus is on taxes, they're alienating groups that traditionally vote for them -- minorities, women and the working class. They can try to shift the conversation so that the services your tax dollars pay for get the spotlight, but ultimately, people don't trust the state government to deliver services. In that poll, only one-in-ten people said they trusted the state "a lot", and slightly more than half said they trusted it at least "some". I doubt there's been much movement on those numbers under the Romney administration.

So how should Democrats talk about taxes? In my opinion, the focus should be on the property tax first, since it's more regressive than the income tax, and it also adds to the high cost of housing. I think given the choice, most homeowners would prefer a reduction in property tax rates over a reduction in the income tax anyway, but I don't have any data on that myself other than my own experience as a landowner (all .08 acres of it). What I'd really like someone to show is that a dollar of income tax goes farther than a dollar of property tax. I think that this has to be the case because every community that takes in property taxes must duplicate the administrative means to collect it, and to distribute the services -- town agencies, school administrators, etc. The state needn't have those sorts of inefficiencies; the overhead cost to the state should theoretically be lower than that for the sum total of all 351 cities and towns. If this is the case, then lowering the income tax could cause property tax rates to end up costing taxpayers more than they saved with the tax cut, assuming that the amount of money spent by localities stays even with inflation.