Bonus Plan: Tax ‘Em

Jan 20, 2010 5:00pm

With Wall Street rolling out its bonus packages, most Americans have a simple response: Tax the big ones.

A broad majority in the latest ABC News/Washington Post poll, 73 percent, favors a direct, special tax on corporate bonuses over $1 million. That’s far more than the support for two other notions – taxing banks themselves, or limiting the size of bonuses they can pay in the first place.

A direct tax on big bonuses has the advantage of majority support across the partisan spectrum, albeit to different degrees: Sixty-two percent of  Republicans and 69 percent of independent are in favor, rising to 85 percent of Democrats.

Behind these views is plenty of public ire, with financial institutions continuing to take the brunt of the blame for the condition of the national economy. Seventy-nine percent of Americans blame the downturn on “banks and other financial institutions, for taking unnecessary risks,” with nearly six in 10 saying they deserve a “great deal” of the blame. That’s essentially the same as last fall – no slack in sight.

Still, despite the financial industry’s unpopularity, plenty of people remain loath to involve the government in private enterprise. Americans divide evenly, 50-49 percent, on whether the government should try to limit the size of bonuses banks that have repaid their TARP loans can give to their top employees. There are big partisan and ideological differences here.

Also there’s nearly an even split, 48-44 percent, on the notion of a tax on stock transactions by banks, again with sharp partisan breaks – 65 percent of Democrats in favor, falling to 35 percent among Republicans. (The administration’s actual tax plan, announced after the poll began, turned out to be on bank liabilities, not stock transactions.)

The nation’s big banks have been rolling out their employee bonus packages this week – hardly endearing figures to the rest of the public, given the nation’s continued broad economic distress. The ABC News consumer confidence index is down sharply the past two weeks to very near its record low. And our ABC/Post poll finds the economy still far and away rated as the nation’s biggest problem, with only 35 percent saying President Obama’s policies have improved it.

That sort of discontent, as yesterday’s Senate election in Massachusetts indicated, can be a powerful political force.

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