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Poll: Tax Code Complex, Needs Reform; Federal Incomes Taxes "Too High"
2009 Survey Asks New Questions on Junk Food Taxes, State-Run Lotteries; Sharp Divergence of Opinion Between Adults of Different Political Parties, Philosophies
Washington, DC, April 8, 2009 - A new national survey commissioned by the Tax Foundation and conducted by Harris Interactive® shows a majority of U.S. adults think that federal income taxes are "too high" (56 percent), while four in every five adults say the federal tax code is complex (85 percent) and say that the tax system needs to be completely overhauled (82 percent).
Despite the recent political and economic shakeups, the Tax Foundation's 2009 Survey of U.S. Attitudes on Taxes, Government Spending and Wealth Distribution shows that American opinions on tax issues have not changed markedly since 2007, the last time the survey was done. Issues of tax complexity, fairness and burdens continue to be important to the American people.
To test whether U.S. adults view their tax burdens as too high or too low, the poll asked what the maximum percentage of a person's income should go to all taxes-federal, state and local. This year, the average response given is 15.6 percent.
"This average is significantly lower than he Tax Foundation's estimates of the nation's actual average total tax burden: 28.2 percent of income," said Matt Moon, the Tax Foundation's Manager of Media Relations, and author of the report on this year's survey, Tax Foundation Special Report No. 166.
Sharp Differences Between Adults of Different Political Parties, Philosophies
This year's survey includes two new demographic categories, where the survey asks respondents to identify their party affiliation and their political philosophy.
Republicans are more likely to say that their federal income tax bill was too high (62 percent) than Democrats (51 percent). Independents come in at 61 percent. Two-thirds of conservatives also say their federal income tax is too high (66 percent) compared to just over half of moderates (55 percent). For liberals, more people say their income tax bill is about right (45 percent) than those who say that it is too high (44 percent).
Yet, when asked how much one would be willing to pay for all services provided by governments in one year, the results are counterintuitive. Republicans are willing to pay an average of $9,985 compared to $7,616 for Democrats. Independents respond with an average of $5,805. Moderates are willing to pay an average of $8,171 with liberals coming in at $7,714 and conservatives coming in at $6,668.
Estate Taxes, Gas Taxes Seen as the Most "Unfair"
At the federal level, the estate tax is considered the least fair, receiving an unfairness ranking of 3.9 on a scale of one to five. This is followed by the gas tax (3.6), federal income taxes and corporate income taxes (3.4 each), and Social Security taxes (3.3). Cigarette, beer and wine taxes receive the lowest unfairness ranking at 2.9.
At the state and local level, the gas tax is considered the least fair. It has an unfairness score of 3.7 on a scale of one to five. This is followed by local property taxes (3.6), motor vehicle taxes (3.5), state income taxes (3.4), retail sales taxes (3.3), and cigarette, beer and wine taxes (2.9).
"A notable demographic difference on state and local "sin taxes" comes in levels of education," Moon explains. "Those with a high school diploma or less give cigarette, beer and wine taxes an unfairness ranking of 3.2; those with graduate degrees or more give them an unfairness ranking of 2.3."
"Non-Payers" Viewed as Unfair, Yet Government Redistribution of Wealth Has Support
According to the most recent IRS statistics for 2006, some 45.6 million tax filers-one-third of all filers-have no federal income tax liability after taking their credits and deductions. When asked whether it’s fair or unfair that some pay zero federal income tax while others pay large amounts, a full two-thirds of adults (66 percent) believe that everyone should be required to pay some minimum amount of tax to help fund the government, while only 19 percent believe that it is fair that some do not pay taxes at all.
Yet those same adults support some sort of progressivity in the tax code for the purposes of redistributing wealth. Just over half of Americans (52 percent) support redistribution of wealth by a larger tax on high-income earners, while 31 percent oppose doing so. Only 10 percent say they "neither support nor oppose," suggesting that this issue is certainly a polarizing one.
"Because the results of these two questions seeming to be counterintuitive, it is unclear whether or not Americans want more or less redistribution of wealth by the government," Moon explains.
Widespread Opposition to Junk Food Taxes, Support for Government-Run Gambling Operations
This year's survey includes two new questions on taxes on food and drink deemed unhealthy, and government-run gambling operations such as lotteries and Keno terminals.
There is widespread opposition to taxes on food and drink deemed unhealthy, with adults being most opposed to taxes on foods with salt (71 percent), followed by opposition to taxes on sugary drinks (59 percent) and junk food (55 percent).
Even though lotteries constitute an implicit tax similar to excise taxes on goods like cigarettes and alcohol, there is widespread support for government-run gambling operations. The majority of adults support this policy (53 percent), with 27 percent somewhat supportive and 26 percent strongly supporting them. Only 12 percent strongly oppose them, while 10 percent are somewhat opposed.
Harris Interactive® conducted the study online within the United States between February 18 and 27, 2009 among 2,002 adults (aged 18 or older). Figures for age, sex, race, education, household income, and region were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents' propensity to be online.
With pure probability samples, with 100 percent response rates, it is possible to calculate the probability that the sampling error (but not other sources of error) is not greater than some number. With a pure probability sample of 2,002 adults one could say with a ninety-five percent probability that the overall results have a sampling error of +/- 2.2 percentage points. However that does not take other sources of error into account. This online survey is not based on a probability sample and therefore no theoretical sampling error can be calculated.
Special Report No. 166 on the 2009 Survey of U.S. Attitudes on Taxes, Government Spending and Wealth Distribution can be found at http://www.taxfoundation.org/files/sr166.pdf.
Topline results from Harris Interactive® are at http://www.taxfoundation.org/legacy/show/24585.html.
The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.
To schedule an interview, please contact Matt Moon, the Tax Foundation's Manager of Media Relations, at (202) 464-5102.
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