On April 28, in his first presidential address to Congress, President Biden outlined his economic policy agenda and explicitly asked that corporations and the wealthiest Americans to pay more in taxes — or as Biden put it, “pay their fair share.”
Indeed, in only the first 100 days of his presidency, Biden has passed and proposed large government interventions in the economy — much larger, most observers agree, than would have been considered before the pandemic. He signed a $1.9 trillion covid-19 relief package in early March, soon followed by the American Jobs Plan, a $2 trillion proposal for infrastructure spending that would include bridge and road repairs, expanded high-speed broadband, new and upgraded schools, and more. Now the White House has announced the American Families Plan, which would spend another $1.8 trillion on child care, education, paid leave and tax credits for those with lower incomes. The infrastructure proposal would be funded by higher taxes on corporations, while the families proposal would be paid for by higher income and capital gains taxes for the wealthy.
Sen. Bernie Sanders (I-Vt.) and others on the left applauded the plans, while congressional Republicans condemned them.
But what do everyday Americans think? Before the pandemic, Americans’ political views — and even perceptions of reality — had increasingly divided along partisan lines. But our new research suggests that a much wider swath of Americans — including Republican voters — support Biden’s economic policy plans, sometimes called “Bidenomics.” When we remind Americans how hard the coronavirus pandemic has hit the United States, both economically and socially, we find bipartisan support for tax increases. That suggests the GOP’s adamant rejection of Bidenomics might erode over time.
How we did our research
American responses to the pandemic have been sharply polarized, with strong partisan splits over issues such as wearing masks, lockdowns and vaccinations. Interestingly, that’s not what we find in the current debate about how to pay for the pandemic measures.
To find out how Americans thought about government involvement in pandemic rescue, we surveyed a nationally representative sample of 2,245 Americans during the first peak of the pandemic, from April 17 to 21 in 2020 via Prolific’s platform. Online participants were invited to participate in a survey in which they would choose between pairs of policy packages that would deal with the pandemic’s fiscal burden. This approach, called a “conjoint experiment,” enabled us to determine which policy features would be most popular. We asked participants to think about who should bear the financial burden; whether the policy should be funded through tax increases or spending cuts; and where else the government might cut spending to pay for pandemic rescue efforts.
To see whether thinking about the pandemic’s effects influenced respondents’ answers, we divided them into three groups. Before they received the survey, we had one group read about how many Americans were expected to die from covid-19; a second group read about how experts expected the pandemic to affect economic growth and household income; and a third group, the control group, simply heard a short piece of instrumental music.
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Information changed Americans’ decisions
A year ago, we found, Americans’ perceptions of the pandemic were polarized along partisan lines — and so were their views on post-pandemic fiscal policies, in predictable ways. For instance, Democrats were more likely than Republicans (by 8 percentage points on the margin) to support policies that emphasized placing the pandemic’s financial burden on businesses and the wealthy. Republicans were more likely to support (by 5 percentage points on the margin) spending cuts. In one area, they agreed: No group wanted broad tax increases.
But when participants read expert predictions either about how many Americans would die from covid-19 or about how the pandemic would devastate incomes, partisan differences disappeared.
Startlingly, they also changed their minds on tax increases. After reading about the pandemic’s expected devastation to both lives and livelihoods, both Democrats and Republicans supported broad tax hikes. An overwhelming majority said they would support a post-pandemic fiscal plan relying almost exclusively on across-the-board tax increases, with especially large support for taxes on corporations and the wealthy. Our analysis suggests that between 55 and 65 percent of Americans would support plans that increased taxes, compared against the baseline (control) option of a balanced fiscal package that relies equally on tax hikes and spending cuts.
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A post-pandemic New Deal?
A new Reuters poll, conducted by Ipsos, found that 73 percent of Americans agreed with Biden’s economic message to Congress this week. In particular, the poll found that 65 percent supports tax hikes for the wealthy — a percentage almost identical to ours, suggesting our findings were accurate. In other words, living through the pandemic and watching the death toll and the collapse of the economy delivered the information that our survey predictions suggested to people a year ago.
Of course, broad popular support does not automatically lead Congress to support a policy. Corporations quickly mobilized against a corporate tax increase, and congressional Democrats are not united in supporting Biden’s proposals. But it does suggest that as Americans continue to suffer the pandemic’s effects, Biden may get his multi-trillion-dollar plans through Congress.
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Shaun P. Hargreaves Heap is a professor of political economy at King’s College London.
Christel Koop is an associate professor of political economy at King’s College London.
Konstantinos Matakos (@kostasmatakos) is an associate professor of economics at King’s College London.
Asli Unan (@aslunn) is a doctoral candidate in political economy at King’s College London.
Nina Sophie Weber (@NinaSophieWeber) is a doctoral candidate in political economy at King’s College London.