Homer Gets a Tax Cut: Inequality and Public Policy in the American Mind

In 2001 and 2003, the Bush administration engineered two enormous tax cuts primarily benefiting very wealthy taxpayers. Most Americans supported these tax cuts. I argue that they did so not because they were indifferent to economic inequality, but because they largely failed to connect inequality and public policy. Three out of every four people polled said that the difference in incomes between rich people and poor people has increased in the past 20 years, and most of them added that that is a bad thing—but most of those people still supported the regressive 2001 Bush tax cut and the even more regressive repeal of the estate tax. Several manifestly relevant considerations had negligible or seemingly perverse effects on these policy views, including assessments of the wastefulness of government spending and desires for additional spending on a variety of government programs. Support for the Bush tax cuts was strongly shaped by people’s attitudes about their own tax burdens, but virtually unaffected by their attitudes about the tax burden of the rich—even in the case of the estate tax, which only affects the wealthiest one or two percent of taxpayers. Public opinion in this instance was ill informed, insensitive to some of the most important implications of the tax cuts, and largely disconnected from (or misconnected to) a variety of relevant values and material interests.