As economists, researchers at the TaxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. Foundation spend most of their time talking about tax efficiency. But tax fairness matters also. So which taxes do Americans view as fair, and which are unfair?
Last week we released our third Annual Survey of U.S. Attitudes on Tax and Wealth, which surveys a representative sample of roughly 2,000 U.S. adults age 18 and over about their views on tax policy. One improvement this year is that we’ve asked much more detailed questions about the fairness of various taxes.
So which taxes are most and least fair? Here are the answers, both for federal taxes and state-local taxes:
Q620. Some taxes are paid to the federal government in Washington and some are paid to state and local governments. Using a scale of 1 to 5, where one means “very fair” and five means “not at all fair”, please indicate what you think of these federal taxes in terms of fairness.
Very fair
(1)
(2)
Fair
(3)
(4)
Not at all fair
(5)
MEAN
Unweighted Base
2,012
2,012
2,012
2,012
2,012
2,012
Cigarette, beer and wine taxes
29%
12%
24%
15%
21%
2.9
Corporate income taxes
16%
10%
32%
17%
25%
3.3
Social Security payroll taxes
8%
9%
42%
21%
19%
3.3
Gas taxes
6%
7%
24%
28%
35%
3.8
Estate taxes
5%
6%
23%
25%
42%
3.9
Federal income taxes
4%
9%
39%
31%
17%
3.5
Source: Tax Foundation
Q625. Using a scale of 1 to 5, where one means “very fair” and five means “not at all fair”, please indicate what you think of these state and local taxes in terms of fairness.
Very fair
(1)
(2)
Fair
(3)
(4)
Not at all fair
(5)
MEAN
Unweighted Base
2,012
2,012
2,012
2,012
2,012
2,012
Cigarette, beer and wine taxes
27%
13%
22%
14%
24%
2.9
State income taxes
7%
10%
38%
24%
20%
3.4
Retail sales taxes
6%
11%
46%
23%
14%
3.3
Motor vehicle taxes
5%
10%
37%
27%
20%
3.5
Gas taxes
5%
8%
25%
26%
36%
3.8
Local property taxes
4%
8%
38%
27%
23%
3.6
Source: Tax Foundation
The finding that estate taxAn estate tax is imposed on the net value of an individual’s taxable estate, after any exclusions or credits, at the time of death. The tax is paid by the estate itself before assets are distributed to heirs. es are still viewed as the least fair federal tax, despite the fact that they are paid by a fairly small number of Americans each year and are currently being phased out through 2010, is consistent with many other survey findings. Results such as these may have direct implications for Congress as they consider the merits of extending the 2001 and 2003 tax provisions—including the estate tax repeal—that will be expiring over the next four years.
The one surprise this year was at the state and local level, where gas taxA gas tax is commonly used to describe the variety of taxes levied on gasoline at both the federal and state levels, to provide funds for highway repair and maintenance, as well as for other government infrastructure projects. These taxes are levied in a few ways, including per-gallon excise taxes, excise taxes imposed on wholesalers, and general sales taxes that apply to the purchase of gasoline. es were viewed as the least fair tax. That’s the first time any state-local tax has edged famously-disliked local property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. es out for the honor of most unfair tax.
There are plenty of other interesting results to browse here, which we’ll be blogging about over the next few weeks leading up to the April 17th tax filing deadline. For a comparison with our past two annual surveys, click here.
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