Americans' 'fiscal cliff' fix? Cut government spending – but not Medicare.
Economists have warned that going over this cliff could send the country back into recession early next year, slowing the economy and pushing unemployment up as the tax hikes hit home. But avoiding any tax hikes or spending cuts would cause the public debt to keep growing, which could harm economic growth.
With the fiscal cliff increasingly making news headlines, the Monitor/TIPP poll sought to test what policy options the public preferred.
A majority described their current federal tax burden as "about right," and a similar majority (55 percent) supported the the general idea of extending current tax rates for all Americans, rather than letting them expire.
The poll also took the nation's pulse on 12 specific fiscal policy options, including some spending cuts and tax hikes. Only one of them, raising taxes on high-earning households, garnered majority support – a poll result hinting at the politically tortuous choices facing elected officials.
Here are the ideas tested in the poll, ranked by popularity:
- Increase federal income taxes on households earning $250,000 or more (54 percent).
- Reduce corporate tax rates to a level comparable to other developed nations, but offset the change by eliminating many corporate subsidies and tax breaks (47 percent).
- Increase corporate taxes (47 percent).
- Limit the tax deduction for homeowners with mortgages over $500,000 (42 percent).
- Increase capital gains taxes (39 percent).
- Increase the Social Security payroll tax cap from the present $110,000 to 170,000 dollars (36 percent).
- Cut defense spending (34 percent).
- Introduce a tax on carbon-based fuels (31 percent).
- Increase the top rate of the estate tax to 45 percent from the present 35 percent (24 percent).
- Cut Social Security spending by increasing the retirement age (23 percent).
- Introduce a value-added tax on consumption, on top of sales taxes currently imposed by many states (19 percent).
- Cut Medicare spending (19 percent).