Back in the early 1980s, another president was offering a bold economic program that consisted of major, across-the-board tax cuts. Back then, as today, there were many opponents of tax-rate reductions. The anti-tax cut establishment threw up all kinds of barriers to knock this major tax reduction off the tracks.
One of the stealthier techniques used by the adversaries of President Reagan’s tax plan was the “poll.” Under the guise of attempting to determine how voters felt about the need or usefulness of the proposed tax cuts, the pollsters decided to ask the voters. Of course, the key aspect of a poll is not the answer but the question. In other words, the question can be structured in such a way as to influence the answer without tipping the audience off as to what is going on.
To obtain the answers they wanted, the pollsters of the Reagan era structured what I call a compound question. They wouldn’t come right out and ask the question; they would structure the question with two inextricable parts — one would be the innocent question and the other would imply a certain result if the answer to the innocent part of the question wasn’t what the pollster was looking for.
Let’s take one of the real barnburners that made all the headlines back in early 1981. One poll found that individuals really didn’t want a tax cut at all. Well, at least that is how the pollsters interpreted the results, because that’s all you heard from the media. However, if you looked more closely at the question used by the pollsters, here is what was asked: “Would you choose to have a tax cut and larger budget deficits or keep taxes the same and have smaller budget deficits?”
In those days, every voter feared budget deficits since they were getting the blame for high inflation and high interest rates (sound familiar?). By structuring the question to incorporate an undesirable outcome, the pollsters could easily manipulate the answer to whatever question they asked.
Flash forward to January 2003. Once President Bush’s proposed economic program was “leaked” to the media, the pollsters had to get an opinion from the voters as to how they viewed a tax cut. In some cases, tax cuts were tied to budget deficits in the questioning, but this time the new voters weren’t buying it. Since the budget surplus of 2000 melted away and a large budget deficit took it’s place — without a surge in interest rates or inflation — voters had no reason to bite.
But this time around, the pollsters had a new gimmick: Ask a universe of people about tax cuts, regardless of whether or not the outcome of a tax cut affects them. This was an easy way for pollsters to elicit the response they wanted. The reason: The structure of the progressive tax system.
Under our current personal-income-tax code, an enormous number of people don’t pay any taxes. Since any tax cut wouldn’t accrue directly to those selected voters, they wouldn’t care much about a tax cut. When asked about the need for a tax cut — especially one that appears crafted for the “rich” — the vast majority of non-taxpaying voters said: We don’t need a tax cut now.
Obviously, the pollsters don’t break out the results by taxpayers and non-taxpayers. The results might be somewhat different if this were the case. At least that would allow those interpreting the poll results to get a clearer picture of how voters viewed the proposed tax cut. But the media seems to have little interest in asking: “Hey, wait a minute, this poll doesn’t reflect the opinions of taxpayers.”
Over the next few weeks or months, the battle over tax reform will rise to a fever pitch. In the process, public opinion polls will be used to sway voters and politicians. For those who participate in these polls, be wary of how the questions are worded, and strip apart the compound questions that are intended to elicit specific answers. And for pollsters who should know better, be sensitive to the validity of your answers — have them reflect the different voting groups you seek to poll.
— Tom Nugent is Executive Vice President & Chief Investment Officer of PlanMember Advisors, Inc., and an investment consultant for Wealth Management Services of South Carolina.