In addition to the federal estate tax of 40 percent (which is fourth highest in the OECD), many U.S. states levy their own estate and inheritance taxes. Estate taxes are charged against the estate regardless of who...
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Media Leaves Out Key Things in Covering Poll Showing Support for Taxing Rich
A new poll by the Pew Research Center, that found 58 percent of respondents - even the high-income respondents - support raising taxes on the rich, is making the media rounds today:
- Associated Press: "Most Americans say the rich don't pay enough in taxes"
- NPR: "Pew Poll: Most Americans Believe Rich Pay 'Too Little' In Taxes"
- CBS News: "Most Americans say rich should pay more taxes, according to new survey"
- Washington Post: "Survey: Most Americans say income gap is bad for US, believe the rich don't pay enough taxes"
The poll is interesting - one question asked for adjectives describing the rich, and the winners were "intelligent," "hard-working," and "greedy" - but as far as tax policy goes, it offers nothing new. Much of the media coverage is leaving out a few key points:
The survey did not ask respondents what they think the rich should pay, or what the rich pay now. Past surveys that have asked this question find that Americans overwhelmingly think the rich pays far less in taxes than the rich actually do. A 2008 poll by Investor's Business Daily, for example, found that 36 percent of Americans think the rich pay 10 percent or less of their income in taxes, while only 12 percent correctly answered 40 percent or more. Many Americans erroneously believe that most rich pay a lower percentage in taxes than they do. Polls that ask respondents to estimate how much rich people should pay in all taxes usually come up with percentages far lower than what they actually pay now. We asked this question in a series of polls between 2005 and 2009 ("what is the maximum percentage of a person's income that should go to taxes - that is, all taxes, state, federal and local") and the answer was between 14 and 16 percent. A blogger from U.S. News & World Report informally asked the question of 24 delegates to the 2008 Democratic National Convention, with the average answer being 25.6 percent. A Hill poll from earlier this year found 66 percent of Americans want a top income tax rate of 30 percent (compared to the existing 35 percent and proposed 39+ percent), a CNN poll found that Americans support "millionaires" paying about 30 percent in taxes, and a Rasmussen poll found respondents think Americans should pay about 20 percent of their income in taxes. In short, when asked to put numbers on it, Americans generally think taxes are too high for everyone, including the rich.
Nearly all Americans view the wealthy as someone else, which is why support for taxing them is higher in abstract questions than in actual proposals. A 2011 Reason-Rupe poll found Americans willing to tax the wealthy by an even larger percentage than the Pew poll, 69 percent to 28 percent. But the pollsters broke down the responses by income level, and discovered that nearly every respondent defined "wealthy" as someone making more money than them. Those making less than $25,000 defined wealthy as earning $100,000 or more a year. Those making $100,000 defined wealthy as making $250,000 or more a year. Those making $200,000 defined wealthy as making $300,000 or more a year, and so forth. Only when you got to $500,000 a year did respondents concede that they are, in fact, wealthy (although some held out for a definition of a $1 million or more a year). Over the weekend, Robert Samuelson had a piece in the Washington Post reminding us that only 2 percent of Americans consider themselves "upper class," and only 7 percent consider themselves "lower class." An overwhelming majority of Americans - 89 percent - consider themselves "middle class."
Support for increasing taxes on the rich has been dropping over time, not increasing. Even with the public being unsure about what the rich pay now and viewing the wealthy as someone else, the percent who support higher taxes on the wealthy, even abstractly, has fallen sharply over time. The New York Times today has a blog compiling Gallup polls asking the question going back to 1992, when 77 percent answered yes. That was the high-water mark, with it dropping (along with federal income tax rates) to as low as 55 percent just before the current economic downturn. The last three years have seen the number jump back up into the sixties before dropping down recently back into the fifties (sorry, Occupy). State-level income tax proposals to soak high-income people have mostly flamed out recently after a flurry of them were enacted in 2008-9. Voters in Washington State, for example - a state more blue than red in partisan terms - in 2010 rejected a ballot measure (35% to 65%) that would have imposed a tax on the highest-earning 1.2% of the state's population.
What's clear is that issues of tax complexity, fairness, and burdens continue to be important to the American people. The debate over the economic growth impact of higher tax rates is also an important one. But a poll showing that Americans abstractly support taxing someone who is not them is nothing new.
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