Regular readers will know that I have a distinctive explanation of why public opinion has shifted since the mid-1990s to favour more taxing and spending. Most researchers in this field think it is an ideological shift towards government services, while I argue that it is linked to household finances. Under my theory, when economic times are good people tend towards spending more on everything, including those services they pay for via taxation. When economic times are not so good, people want to protect their household budgets, and opinion tends towards preferring lower taxation.*
According to my theory, in a mild recession we should be starting to see a shift in opinion back towards lower tax. One indicator of perceptions of household finances I used in my original research, Roy Morgan’s consumer confidence poll, shows that while confidence is rising again it is still well below its 2007 levels, when pro-tax opinion was high.
An Essential Research poll published on Pollytics blog earlier this week on whether tax increases to fund more spending have support appears consistent with that theory. Continue reading “Is opinion turning back against tax and spend?”