Sen. Bernie Sanders (I-Vt.) and others on the left applauded the plans, while congressional Republicans condemned them.
But what about ordinary Americans? Before the pandemic, Americans’ political views — and even perceptions of reality — had increasingly become divided along partisan lines. Corn our new research suggests that a much larger number 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 see bipartisan support for tax increases. This suggests the GOP’s outright rejection of Bidenomics could erode over time.
American responses to the pandemic have been sharply polarized, with strong partisan divisions on issues such as mask-wearing, lockdowns and vaccinations. Interestingly, this is not what we find in the current debate about how to pay for pandemic measures.
To find out how Americans thought about government involvement in the pandemic rescue, we surveyed a nationally representative sample of 2,245 Americans during the pandemic’s first peak, April 17-21, 2020 via Prolific’s platform. Online participants were asked to participate in a survey in which they would choose between pairs of policy packages that would address the fiscal burden of the pandemic. This approach, called a “joint experiment,” allowed us to determine which features of the policy would be most popular. We asked participants to think about who should bear the financial burden; whether the policy should be financed by tax increases or spending cuts; and where the government could cut spending to pay for pandemic rescue efforts.
To see if thinking about the effects of the pandemic influenced respondents’ answers, we divided them into three groups. Before they received the survey, we asked one group to read how many Americans were expected to die from covid-19; a second group read how experts expected the pandemic to affect economic growth and household incomes; and a third group, the control group, simply heard a short piece of instrumental music.
The information changed the decisions of Americans
A year ago, we found that Americans’ perceptions of the pandemic were polarized along partisan lines — as were their views on post-pandemic fiscal policies, predictably. For example, Democrats were more likely than Republicans (by 8 percentage points on the margin) to support policies that emphasized placing the financial burden of the pandemic on corporations 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 large tax increases.
But when attendees read expert predictions about how many Americans would die from covid-19 or how the pandemic would devastate incomes, partisan differences disappeared.
Surprisingly, they also changed their minds on tax increases. After learning of the expected devastation of the pandemic on lives and livelihoods, Democrats and Republicans backed sweeping tax hikes. An overwhelming majority said they would support a post-pandemic fiscal plan based almost exclusively on broad-based tax increases, with particularly strong support for taxes on corporations and the wealthy. Our analysis suggests that between 55 and 65 percent of Americans would support plans to raise taxes, compared to the baseline (control) option of a balanced budget program based equally on tax hikes and spending cuts.
A post-pandemic New Deal?
A new Reuters poll, conducted by Ipsos, found that 73% of Americans agreed with Biden’s economic message to Congress this week. In particular, the poll found that 65% support tax hikes for the wealthy – a percentage almost identical to ours, suggesting that our findings were accurate. In other words, living through the pandemic and watching the death toll and the collapse of the economy provided the insights that our survey forecasts suggested to people a year ago.
Of course, broad popular support does not automatically lead Congress to support a policy. Businesses quickly rallied against a corporate tax hike, and congressional Democrats are not united in backing Biden’s proposals. But it suggests that as Americans continue to reel the effects of the pandemic, Biden could push his multi-trillion-dollar plans through Congress.
Christel Koup is Associate Professor of Political Economy at King’s College London.
Konstantinos Matakos (@kostasmatakos) is Associate Professor of Economics at King’s College London.
Asli Ounan (@aslunn) is a PhD student in political economy at King’s College London.
Nina Sophie Weber (@NinaSophieWeber) is a PhD candidate in political economy at King’s College London.