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Chart of the Day - 4.14.2009
With Tax Day coming up, and astroturf tea parties being organized around the country, a lot of people have been linking to polls showing that most Americans aren't, in fact, actually unhappy with the amount of income tax they have to pay. Gallup, for example, reports that 61% of Americans think the amount they're paying this year is fair. Or there's this one, also from Gallup, that asks directly whether the amount you're paying is too high or not:
Not bad! 49% think their income taxes are just fine or even a bit low. Except for one thing: this chart shows exactly the opposite of what it seems. Consider this: about 40-50% of Americans pay no federal income tax at all1. That's zero dollars. I think we can safely assume that these are the people who think their taxes are about right. What this means, then, is that virtually every American who pays any income tax at all thinks they're paying too much. There are various reasons why this might be so (a sense of unfairness regardless of amount paid, a fuzzy sense of how much they're paying in the first place, simple bloody-mindedness, etc.) but overall it's not exactly a testament to our collective willingness to fund the machinery of state.
1Of course, all of them pay other taxes. There's more to life than just the income tax. But this question was strictly about federal income tax, and it demonstrates that nearly everyone with a nonzero 1040 payment thinks they're paying too much.
Let those
that think they are paying too much move to hmmm, oh say Somalia and then see how they like their tax free life style. It's ignorant fools all the way down (nothing new about that of course).
"The difference between what we do and what we are capable of doing would suffice to solve most of the world`s problem." - Mohandas Gandhi
Taxation is theft but...
tagged as:- solution
To think that 40-50% of all citizens pay zero taxes seems rather alarming doesn't it? While I'd personally vote for reversing the 16th Amendment I know that will never happen with our government's insatiable appetite for funds. Having said that, perhaps we could all agree that EVERYONE should pay their "fair share" in the form of a fixed percentage. Let's keep it stupid simple, put the IRS out of business, and save tax payers a boat load of money along the way.
Surveys should not be strictly construed
You are correct that a large number of Americans currently do not pay federal income tax, and that the survey asks only about federal income tax, not other taxes.
But do you really think that 68% of Americans paid significant federal income taxes in 1999?
It is clear that at least some respondents did not treat the question as literally as you are.
Generational psyche
Just because everyone who pays taxes believes they pay too much doesn't necessarily make it true. This has been a Republican talking point for 30 years, so has lodged itself in the American psyche as a truism, something not even questioned. Of course, they only reinforce the idea when someone like Bush comes along and makes the Federal Government look like bumbling idiots who shouldn't be entrusted with a dime of our money.
Perhaps the better question would be: "Do you think your tax dollars are spent wisely?"
I've got a better question
tagged as:- solution
Should government be performing the "services" they are? Perhaps government should get back to the role originally intended and stop being the single largest charitable organization in the country.
It's time to get off the gubbamint crutch. For the remaining government programs you have a valid question, "Are our tax dollars being spent wisely?"
Taxes
Anonymous: Actually, the Gallup figures are probably about right. The number of unhappy taxpayers went down sharply in 2001-2003, at the same time that George Bush's tax cuts were going into effect. Those tax cuts significantly increased the number of people who pay no federal income tax.
It's true that not everyone takes the question as literally as I am, but considering (a) it's tax season, and (b) most people are barely even aware of payroll taxes, I'll bet most of the respondents really were thinking about their 1040s.
McTee: Absolutely right. I'm just making the point that this Republican talking point is still pretty influential. (And of course, no one likes paying taxes anyway, so this isn't some huge surprise or anything.)
Part of the problem is the
Part of the problem is the sheer complexity of the tax system. Most people who pay income tax just take the standard deduction, and maybe one or two of the easy credits, like the child tax credit. But there's a ton of people who don't take credits they're entitled to, like the college tuition credit, simply because they don't know about them. The IRS is not good at alerting people to credits they might qualify for - if you don't happen to know that something qualifies for a tax credit, you probably won't find out by reading the standard 1040 instructions.
There's a perception that the system is riddled with loopholes... probably because, in reality, the system really is riddled with loopholes. That's one of the bigger reasons behind the perception that the individual is paying too much - the idea that people with a lot more money are paying a lot less tax because they know exactly what form to fill out, what kind of fund to put their money in, all that sort of thing.
Heck, I think I paid too much in taxes, and I didn't even pay that high a percentage - but my income's low enough that I ought to be in quite a low bracket, but self-employment tax costs me damn near as much as conventional federal tax. That sort of thing hurts.
Exactly
What Kevin and a lot of other folks here don't stop to think about is that for the folks on the lower end of the income scale, that FICA hit , not to mention all the other taxes, looms very large. (Especially if you're self-employed.)
In the days when I was making a pretty good salary, I had no complaints (or at least serious ones) about the amount of my pay that went to taxes because there was plenty left over for me to live more than comfortably.
Now that I'm self-employed and living on the fringe, the amount I pay in taxes means I can't pay for health insurance, or even to buy groceries in bulk. It's hard in those circumstances not to feel resentful as heck about the amount of money I earn that disappears into the government's coffers, whether it's rational or not.
I doubt it's the same people
I doubt it's the same people who think taxes are fair and aren't paying fed. income tax. I don't even think most people know how much they're paying.
I've known many people making a middle class income - usually conservatives - who think they're paying something like 35% of their income in federal income taxes, and are ready to take to the streets in teabagging parties. They never believe you when you tell them in reality it's probably under 5%, which is the typical effective rate for that income level. I don't think people get withholding or rebates, let alone marginal and effective rates.
No, my guess is that most of the people saying their taxes are too high are conservatives, regardless of their actual tax rates.
Where do you come up with your numbers dude
tagged as:- solution
5%? I wish. I'm middle class and this year will pay over 20% on total income. You hear that giant sucking sound? It's time for this government to go on a crash diet.
not me
i don't think i'm paying too much
I think the chart is meaningless
"Of course, all of them pay other taxes. There's more to life than just the income tax. But this question was strictly about federal income tax, and it demonstrates that nearly everyone with a nonzero 1040 payment thinks they're paying too much."
The question may be specifically about income taxes but even many smart and educated people that I know don't understand the distinction between income taxes - which most poor workers don't pay much of - and payroll taxes - which even poor people pay at the full rate.
Therefore, given the question, "are you're income taxes too high?" a significant portion of respondents are *hearing* the question, "are the taxes coming out of your paycheck too high?" From the information given, there's no way to filter out these responses and match up one group with another.
With that said, I bitch up a storm about my income taxes every year when I have to pay them, but the reality is that they're not honestly all that bad.
My taxes are about right
I'm surprised at this post, Kevin--you're way smarter than the assumptions you seem to make here. What BRussell said is "spot on"--many people don't know how much they're paying, but everybody knows how they feel about taxes.
Here in my "red state" I guarantee that there are many "zero federal income tax" folks who'd say they're paying too much. Meanwhile, in the college town where I live in that red state, since I saw that Gallup poll the other day I've raised the point in several conversations, and at least 50% of my respondents (all of whom pay federal income tax) said "about right" or "too low."
looking into the sun
tagged as:- solution
Any if I look into the Sun for a while it doesn't hurt too bad. We are a frog in boiling water. Repeal the 16th!
Read the rest of the Gallup post
If you scroll down the Gallup post on tax perceptions, you'll see that even people with high incomes are fairly satisfied with their tax levels. The percentage saying their taxes were too high were: 39% (under $30K) 45% ($30-$75K) and 53% (over $75K). Those saying their taxes were "about right" by income group were 51% (under $30K), 52% ($30K-$75K) and 44% (over $75K).
So paying a higher tax rate somewhat increased your belief that your tax rates were too high. I guess that's understandable. But what this chart clearly *doesn't* mean is "that virtually every American who pays any income tax at all thinks they're paying too much."
Ditto most commentators -
Ditto most commentators - you're assuming too much. Coming from a rural area where most people make little money, I can tell you without a doubt that many of these folks (i.e., the non-payers) have no idea how much they pay, and yet still bitch at length about "tax-and-spend" Democrats, and of course are up in arms about Obama's "tax increase" - even though none of them will break the $250k mark. You're presuming some element of rationality.
Agree with others
Agree with others above--most people on the lower end think the FICA withheld from their paychecks is "income tax."
So ask them if their "income tax" is too high, and they'll say yeah. And their FICA *is* too high--it's an extremely regressive tax, as we all know.
As a matter of fact, don't I remember some trickle-down conservative (Norquist, maybe?) admitting that the Republicans intentionally keep FICA as high as possible, so as to generate anti-tax feeling among the have-nots? What vermin.
Why don't we let liberals
Why don't we let liberals who think they're undertaxed pay more,
and conservatives who feel the're overtaxed pay less? Everyone
would be happy :).
Seriously though...The 1040 specifies the minimum tax due, not the maximum. If Warren Buffett and other guilt-ridden rich liberals want to pay more, have at it. Strange that Buffett won't voluntarily do what he seeks to mandate on others.
on that note, i do find it
on that note, i do find it humorous that Bill Clinton, who has access to the greatest tax advice around. Couldnt figure out that if he were "undertaxed" by Bush's tax break that he and anyone else could just write a check to the treasury.
but he certainly knew enough to tax peoples estates upon death. Its never about "people paying their fare share, its about someone other than liberals paying that".
taxes
The real problem is that taxes are a necessary evil. However, the tax structure that is set up in this country is a huge ponzi scheme. It has been designed to allow a very few people amass a great deal of power. Im quite certain if taxes were apportioned by how we consumed things, people would feel just fine about paying. If i dont like the tax, i dont buy the item. But this would make the consumer in control of the amount of money the idiots in congress would have to waste.
Next is the idea that giving money "arbitrarily" to idiots who can barely balance their own check books to spend it any way they think is appropriate is in itself a disastrous premise.
Congress is about power, the idea that they are there "serving" the people is laughable. They are their for their own selfish means, and have mastered the art of playing one group of voters against the others. How else could one explain that they have voted against the wishes of the people on things such as the TARP, Immigration reform, Taxes, Education reform, Tort reform, and thousands of other issues. People feel they must be in the "game".
Taxes
I had sort of a eureka moment in the tax area this year. I've never minded paying taxes because my husband and I earned (past tense) an above average income and I didn't miss the money paid to the government, there was plenty left for a decent lifestyle, although luckily we tended to be savers and not spenders. But this year, our daughter finished her first complete year as a real estate photographer. Her employer doesn't pay FICA taxes for her nor do they withhold taxes nor do they pay benefits, so she's considered self-employed by the IRS. Even though most of the big tax chunk of $3000 was FICA, it still hurt her to write the check, since she's trying to save money for grad school, etc. Anyway, my eureka moment came when I realized that it's much harder for lower income people, despite being in lower tax brackets, to make ends meet and hence the money paid in taxes is considered a real loss. I guess everyone in the world had this figured out already but me. It's hardly difficult to understand. Now I know why people used to call me a 'limosine lib' on political forums in the 90's.
The problem, of course, is
The problem, of course, is that taxes are extracted by force of arms, an extremely "illiberal" act. Democracy then leads to greater and greater tyranny of one group over the other.
MJ liberals will never reconcile themselves to the use of force (i.e., gunplay) as the collection mechanism for taxes.
perfect
perfect
Federal? What's that?
I think the survey is useless. Without first ascertaining whether the respondent even knows the difference between state and federal taxes, and what they are paying of each, they may think they pay more than they actually do. Remember - we are not a smart country. Half of us believe in aliens and 90% of us believe in a talking snake.