Wednesday, April 14, 2010

For the "We Despair For Our Republic" Gang

(UPDATE: See comments below -- not mine, the other ones.  See Jonathan Chait's response.  See me concede).

Gallup:
For the second straight year, slightly less than half of Americans say the amount of federal income tax they have to pay is too high, while almost as many say the amount they pay in taxes is about right.
That's 48% say their federal income taxes are too high, compared to 45% who say "just right," 3% who think their federal income taxes are too low.

And, the New York Times:
Forty-seven percent.  That’s the portion of American households that owe no income tax for 2009.
That's from an excellent David Leonhardt article that explains who actually pays taxes, and what kind of taxes.

Did you catch that?  Half of American households don't pay income tax, and half of the American people believe that they, themselves, pay too much income tax.

I realize that households aren't quite the same as people, but either way one of two things is true: either virtually everyone who pays any federal income tax at all thinks that they pay too much, or a whole lot of people who pay zero income taxes believe they pay too much.  A quick look at Gallup's crosstabs make it clear that the answer is the latter, since the "pay too much" answer turns out not to vary much by income.  That's right -- 44% of those who make $20K a year or less believe they pay too much in federal income tax, and 41% of those who make between $20K and $30K believe they pay too much in federal income tax.  The vast majority of those people do not pay a single penny in federal income taxes.

I mean, forget about asking people what they know about government and public affairs.  If they don't know that they, themselves, don't pay any income tax...you know, I don't even know how to complete that sentence.

7 comments:

  1. Most people probably consider FICA and Medicare, and for that matter the state tax, part of their "income tax." Just thinking of my teen son: you look at the gross, and you look at the net, and there's your 'tax.'

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  2. Second ASP's comment. Jonathan, I think your post actually buys into the conservative spin about the 47% who pay no "taxes" ... Americans tend not to differentiate between Federal income taxes and payroll taxes.

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  3. I shouldn't say "buys into the spin." But, I did find it odd that although you scrupulously write about federal income taxes, you don't point out the possibility that the public is less confused about taxes than it seems from this survey. Only about half say they pay too much ... that seems low to me.

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  4. Just to add--the issue here is that people, when asked about their federal income taxes, are unlikely to say 'the federal income tax is fine, but FICA, Medicare, unemployment insurance, state taxes, sales taxes, and payroll taxes seem too high as well as being regressive.' This doesn't even mean that people don't know the difference, because the effect is the same if they are using (and assuming the pollster is using) the common trope of 'income tax' standing for your entire tax burden.

    Now, the fact that this is a common rhetorical figure is problematic, perhaps extremely problematic. And the other part, that people really don't know the difference, is in part attributable to that habit of speech. But this is something different from saying that people don't know that they don't pay taxes.

    Thanks,
    -V.

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  5. Oh, no question that's what's happening. It's just, well, something to take note of that people have no idea about taxes they themselves are (and aren't) paying. That is, large numbers of Americans don't know what "income tax" is.

    FWIW, I'm willing to bet there are a whole lot of people out there that judge their tax burden by whether they owe anything or get a rebate on April 15, vs. how much they're actually paying over the course of the year.

    And also -- I'm not a "despair for our Republic" type. Just thought this item has ammunition for those that are.

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  6. It is generally understood among the media (and educated folks) that when you say "Federal Income Tax," you are not talking about FICA or Medicare. But, technically, these payroll taxes are "income taxes," because they are assessed according to your income.

    So if I were making $20,000 and still paying hefty payroll taxes, I might also say that my "income taxes" are too high.

    One could say that there are two separate concepts here: "Income Tax" and "income tax." Only 53% of us pay the former, but more like 90% pay the latter.

    Because Gallup doesn't explain the difference, I wouldn't pay too much attention to that poll.

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  7. While the point that people confuse income taxes with Income Taxes is a valid one, the larger point is hard to miss. Large numbers of Americans pay very little in taxes, yet many still feel like they pay too much.
    I'm not sure what to do about this. As an aggregate, Americans want lower taxes, more spending, and no deficit. While this may partly be a function of aggregation, it is mostly because people are really pretty misinformed. Honestly, it's childish. Americans want something for nothing. I'm not sure other nations don't as well, but it seems worse to me here.

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