Tax Bill: Wise to Spend Extra Money in Your Paycheck?
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This is Your Money Matters from The Wall Street Journal. Welcome to Your Money Matters. I'm J.R. Whalen in New York. The tax bill approved by Congress this week put sweeping changes into place across the U.S. economy. But many Americans are skeptical that the work of their elected officials will have a positive impact on their finances. That's the finding of a new report from Bankrate.com. And its senior economic analyst, Mark Hamrick, joins us via Skype with more details. So, Mark, amid all the fanfare surrounding the tax bill, we saw congressional votes almost right down the middle on Tuesday and Wednesday with Republicans notching a slim victory. But the percentage of those polled who have a sense of optimism is actually far less than 50 percent.
That's right, JR.
What does Bankrate's survey reveal about Americans' confidence in Washington's impact on their finances?
We polled Americans, not specifically on the tax legislation, but more broadly about how they feel about their elected leaders in Washington and the impacts, essentially, that their decisions have on their money. After all, it is the taxpayers' money. And our bank rate survey found that Americans are, in fact, increasingly pessimistic. about that issue. In fact, 23% of Americans, we might say only 23% of Americans, think their elected leaders in Washington will have a positive impact on their finances. And then on the more negative side of the equation, 40% believe the impact of their decisions and their actions will be negative. That's up sharply in the sense of more negative from a year ago. And 30% see no impact either way.
So back away from all that, 70% of Americans think that there will either be no impact that's seen on their finances or there will be a negative impact, and that's a pretty bad grade.
You know, you would think that the stock market run-up in the last 12 months would have a sweeping sense of optimism, but people are sort of looking past that, as your poll indicates, and they're saying, you know, the stock market run-up, put that aside, we're not really in love with what Washington is doing.
Yeah, I think perhaps many Americans disassociate themselves from the stock market's performance. And over time, that's probably wise to some degree. The other part is, we would just say, you know, to what degree do Americans credit elected leaders in Washington with the stock market's performance? And different people have different answers to that. But I think a couple of things here. Number one, as we know, over the long term, Americans have low trust in institutions broadly and particularly low trust in Congress and particularly this Congress and typically low trust in the president and in particular this president So these things are probably being reflected here You know when we looked at how this breaks down among members of political parties 57% of Republicans expect a positive impact on the part of what their elected leaders are doing essentially for them and 68% of Democrats expect a negative impact so
let's say the passions are more broadly felt on the part of Democrats and perhaps we can understand why. And then when you think about the middle being so important in electing the president and others, uh, independence were divided between having a negative outlook, 42% of them or believing that there's no impact. And, uh, broadly that was 80% overall. So either no impact or negative impact, uh, as expressed by independence. And, um, So, you know, and I think we can also look to the way that this tax legislation works out to the extent that we know the broadest part of the benefits go to one corporations and two wealthier Americans. And so credit Americans for being smart enough to recognize that.
to understand that it's possible that the broadest part of the American public is not being well served by this legislation. And that's what the polling on the tax bill shows as well.
You mentioned that people were not polled specifically on the tax bill. We should mention that Bankrate's survey was conducted about a week before Congress approved the tax bill, but the main points of the bill were well known at the time that people were polled.
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