Reflections on Tax Day
Gallup always releases a poll on April 15 that asks people about their tax burden. So I awoke this morning to a Politico headline saying "Poll: shrinking belief taxes are fair." The hed and the accompanying story are presented to make it look as if people are just pissed off about the amount of taxes they're paying, which in turn is supposed to reflect negatively on you-know-who, the big tax and spender (who has actually cut more taxes than he's raised and, after 2009, dramatically reduced spending, but that's another post).
Classic Politico Drudge-bait. So I asks myself, I sez: Okay, but why are people pissed off? Well, I went to this page and clicked on the .pdf of the entire poll. And it seems that yes, to some degree, people in general have a perception that they are paying higher taxes to some small extent; clearly some fraction of Americans saw the headlines about the tax increase in the fiscal cliff deal, which applied only to the top 1 percent, and maybe over-generalized.
But then, there was this other question: As I read off some different groups, please tell me if you think they are paying their FAIR share in federal taxes, paying too MUCH or paying too LITTLE? First, how about -- [ITEMS A-C ROTATED, ITEM D READ LAST]?
And here are the answers. The three numbers after each category represent the responses "fair share," "too much," and "too little."
Middle-class people: 53, 42, 3
Low-income people: 37, 40, 19
High-income people: 26, 11, 61
Corporations: 21, 8, 66
Now here is what those numbers say:
1. People think, and strongly so, that rich people and corporations are paying too little. So this shrinking sense of fairness is quite obviously tied in some way to people's conviction that the big boys aren't paying their freight. Somehow, the Politico write-up missed this result!
2. With only 19 percent grousing that the poor pay too little, there doesn't seem to be much "47 percent" animosity afoot in this country. In fact the percentage that believes the poor are paying too little is slightly down.
3. And most importantly: The tax conversation we are having in Washington DC is completely on a different planet than the conversation a majority of Americans would like us to be having. We have one party that wants to cut taxes on rich people by anywhere from 20 to 33 percent or so. We have another party that did manage to raise them by 13 percent (from 35 to 39.6 percent, a 13-point increase in percentage terms) on less than 1 percent of filers. And that's it. Those are our two poles. As for corporations, nearly every important figure in Washington from both parties wants to lower taxes on corporations.
On the Times op-ed page today, Joseph Stiglitz sees the picture more clearly:
About 6 in 10 of us believe that the tax system is unfair — and they’re right: put simply, the very rich don’t pay their fair share. The richest 400 individual taxpayers, with an average income of more than $200 million, pay less than 20 percent of their income in taxes — far lower than mere millionaires, who pay about 25 percent of their income in taxes, and about the same as those earning a mere $200,000 to $500,000. And in 2009, 116 of the top 400 earners — almost a third — paid less than 15 percent of their income in taxes.
I will note, for the record, that for 2011, I paid 27 percent of my income to the federales. I don't know the 2012 number yet, but it will be similar. And that doesn't count what I sent to Annapolis. I'm not wild about it, but as I've noted many times, I know that I'm fortunate and I'd willingly pay a little more, especially in the form of an increased FICA cap.
In any case, I think it would be interesting and illuminating if every pundit and high-level editor published this information. I bet it would explain a lot about the parameters of our tax debate.