As the nation prepares to listen to President Obama give the State of the Union Address this evening we are highlighting our data on Latino’s attitude toward tax policy, an issue the President has been previewing in speeches across the country over the past two weeks. It has been widely reported that several senior administration officials have indicated that the President will call for higher taxes for wealthy Americans and more tax credits for the middle class.
The proposed tax changes are likely to include raising the capital gains rate on couples making over $500,000 a year from 23.8% to 28%. Proposed changes to the tax code would also include removing a tax break that allows heirs to avoid capital gains taxes on large inheritances. It is estimated that these capital gains tax reforms would narrowly impact the top 1 percent of earners in the nation, protecting the vast majority of middle-income families from the hikes.
Latino Decisions has polled Latinos on tax reform for some time, finding consistent and strong support for increased taxes on the wealthy. For example, in the 2012 impreMedia/Latino Decisions election eve poll of more than 5,600 Latino voters, an astounding 77% said they favor tax increases on the wealthy as part of a plan to reduce the deficit. One of the more important findings from this poll was that even a majority (51%) of Latino Republicans support higher taxes on the wealthy compared to only 35% who prefer a cuts-only approach. Results from the more recent 2014 Latino Decisions Election Eve poll reveal that Latino attitudes on this issue have remained consistent over the past two years, as 70% of Latinos said they favor tax increases for the wealthy combined with spending cuts to balance the budget.
The President’s focus on the economy and economic inequality will generate a lot of interest from Latinos, a population slow to recover from the major economic recession. A poll conducted by Latino Decisions for the National Council of La Raza last year found that:
- 53% of Latino registered voters are very or somewhat concerned that someone in their household will lose their job and face unemployment.
- 50% of Latino registered voters said they were worried that they would not have enough money to pay their monthly bills.
- 33% of Latino registered voters said they were worried they might lose their homes to foreclosure due to economic challenges.
It is anticipated that the President’s tax reform agenda includes using revenue generated from the increased revenue from the wealthiest segment of the population to provide tax credits for the middle class. This would include extending the earned income tax credits to families without children, and tripling the maximum tax credits for child care in low and middle-income households.
The tax credits for child care are particularly important to Latinos, a population more likely to have children than non-Latinos who are also more likely to be of low or middle-income. A recent poll conducted by Latino Decisions on behalf of the W.K. Kellogg Foundation found that just under 30% of Latinos say that childcare issues like scheduling and costs make their work situations more difficult. The addition of new tax credits to support child care will help these families off-set the high cost of child care.
As both parties listen to the speech tonight and begin speculating about political implications with an eye toward 2016, the data presented here indicate that Latinos would be highly supportive of a bi-partisan effort to reform the tax code.