Two-thirds of respondents to this week’s RBJ Daily Report Snap Poll say in terms of fairness, the amount of federal income tax they personally pay is too high. Just 3 percent say they believe they’re paying too little in federal income tax, and 31 percent say the portion they pay is about right.
In an April 2013 Snap Poll that asked the same question, the results were similar: too high, 63 percent; about right, 32 percent; and too low, 5 percent.
Since ratification of the 16th Amendment in February 1913, Americans have faced an annual federal income tax deadline. Tax Day 2015 arrives next week.
The federal income tax is designed to be progressive, taking a larger percentage from higher-income individuals than it does from those with lower incomes. The fairness of the distribution of the tax burden has long been debated, however.
A November 2014 report by the Congressional Budget Office provided this breakdown of average before-tax household income in 2011: lowest quintile, 5.3 percent; middle quintile, 14.1 percent; and highest quintile, 51.9 percent.
In 2011, the average federal income tax rates for households in the same quintiles were: lowest quintile, -7.5 percent; middle quintile, 2.4 percent; and highest quintile, 14.2 percent. (A negative average income tax rate occurs if refundable tax credits exceed income tax liabilities.)
The CBO report also calculated an overall average federal tax rate including payroll (or social insurance) taxes, corporate income taxes and excise taxes, in addition to individual income taxes. The overall average federal tax rate in 2011 was 17.6 percent, second lowest in the 1979-2011 period. The shares of federal taxes paid by households in the lowest, middle and highest quintiles were 0.6 percent, 8.9 percent and 68.7 percent.
More than half of poll respondents—57 percent—said the overall average federal tax rate was too high, compared with 32 percent who said it was about right and 11 percent who said it’s too low.
Nearly 560 readers participated in this week’s poll, conducted April 6 and 7.
In terms of fairness, is the amount of federal income tax you personally pay too high, about right or too low?
Too high: 66%
About right: 31%
Too low: 3%
In terms of the overall average federal tax rate (17.6 percent in 2011), do you think it is too high, about right or too low?
Too high: 57%
About right: 32%
Too low: 11%
For information on how the Snap Polls are conducted, click here.
I would not consider my income taxes high, if the tax code had the same loopholes for everyone that it has for the richest. Also, if corporations are now legally persons since Citizens United, then they should pay personal income taxes, just as I do.
—Ken Maher, Rochester
The tax rate could be much lower if there was a concerted effort to evaluate and eliminate unnecessary, duplicative and ineffective federal programs and mandates. It seems that our federal government—including many of its employees, managers and elected officials—has no conscience when it comes to spending other people’s money. They should have a strong sense of stewardship and responsibility to use our money sparingly and wisely. I see no evidence of that at all.
It’s not the tax rate that is too high; it’s the spending that is out of control. Too many interest groups control Congress, the president and the spending. Cut programs until our budget is balanced!
—Harold Ley, Stoney Co.
There should be a flat tax: no deductions, no exemptions. We pay too much for an overcomplicated tax system. Whether it’s federal, state or local taxes, simple is better. More revenue to apply to needs instead of administrative waste.
Between state and federal taxes (sales tax, fees and tolls, as well) about 50 percent of my income is spent here. We cover the full expense for preschool, half-day kindergarten, lunch for the kids, etc. In short, yes, I feel my taxes are too high.
I favor a flat tax of 10 percent across the board.
Our U.S. average rate is fairly low for developed countries in the world, particularly Europe. That is probably the major reason for the strength of our economy has always excelled, with only a few exceptions for the past 230 years. With lower taxes, our national return on invested capital is also the highest in the world.
—Hal Gaffin, Fairport
Imagine if the federal government not only maintained the current tax rate but also instituted good financial and social management practices. But that scenario is impossible. How do you herd cats (Congress and executive branch) who act as independent contractors?
—Frank Duserick, Naples
The “progressive” tax system has become way too progressive. The portion of the population that supports the system is reaching a breaking point in how much they’ll pay (which is far more than their “fair share”). Similarly, the portion of the population that has a negative income tax rate has grown too large. Unfortunately, it might be very difficult to reverse some of those programs now that they are a way of life for people.
—David Fiegel, Blackbird Asset Services
Taxes on middle- and upper-income households are way too high. If we had to write an annual check to the U.S. Treasury instead of having federal tax withheld each paycheck, there would be a revolution.
—Karen Zilora, Creative Scanning Solutions Inc.
One-phrase answer: Flat tax.
The question about average federal tax makes no sense. I have paid almost twice the average for 25 years.
This is a ridiculous question. Go to fairtax.org to see a better alternative.
—Devon Michaels, Chili
Isn’t it about time the federal government simplified the tax code? It has become too complex; the average person needs to either buy software or hire a professional to do their taxes. If people don’t understand how to fill out the forms, then how are they going to understand what to do during the year to put their money in the right places for the tax advantage? The alternative minimum tax needs to be revisited or eliminated. The middle class is being taxed out of existence. The wealthy will always find a way to shelter their income because they have the means to hire the professionals to direct them.
Income tax rates for productive Americans are excessive. Approximately 50 percent of unproductive Americans pay minimal or no federal income taxes. Current government policy is severely flawed. The current administration should take an Economics 101 course. Their overuse of Keynesian economics has resulted in national debt of almost $19 trillion, of which $8 trillion has accumulated since 2009. At the same time, the recovery has been the slowest in history because the government increased many taxes on productive Americans which shifted resources from the private sector to the inefficient government sector. What make matters worse is Obamacare, which was declared a tax by the U.S. Supreme Court. Instead, supply-side economics would decrease taxes which would shift resources back from the inefficient government sector to the more efficient private sector. This is the real solution, not the current failed economic policies.
—John Rynne, president Rynne, Murphy and Associates Inc.
This poll makes no sense. How do you define fairness? If there is no definition for fairness, you are in the realm of emotions and other immeasurable quantities. We should be measuring our tax rates by how they help or hinder job creation in the private sector. But politicians like to manipulate us with emotional garbage, even when it logically hurts the country. So let’s stop wasting time and energy on the fruitless “fairness” argument and focus on shrinking government, so the private sector can grow and generate more good jobs.
—Dennis Ditch, Delta Square Inc.
Boy, it appears the RBJ stacked the deck on this issue. In your intro to this issue, you mentioned a progressive tax system; well, it appears we do not have a progressive system in place. I think Warren Buffet had it right: “Those earning more than X (e.g.; $1,000,000) should pay a minimum of 30 percent tax rate.” Since I don’t see this happening any time soon, I think the average rate of 17.6 percent is too low, especially in light of the fact the federal government is spending at a 22 percent clip.
—Peter Bonenfant, Fairport
Since “they” ruined capital gains and inheritance taxes, I may move to Chile, the country. I have no faith in New York whatsoever, and the Feds only care about their obnoxious retirements and health care.
—Daniel Mossien, architect
Let me take a page out of Steve Forbes’ book. A flat tax on income above a certain level would do wonders for the economy, get the IRS out of our wallets and our bank accounts and would be revenue-neutral. Capital gains income would be treated like earned income, and most people’s 1099 form would only be one page long.
—Clifford Jacobson M.D.
Personally, I believe we are totally missing the point here. We cannot have a government unless we pay for it! All taxpayers would benefit if we continually looked for ways to reduce government, fraud and entitlements!
—J.A. DePaolis, Penfield
I think it is ridiculous that anyone receives a “refund” (handout?) of more than they’ve paid in. I also believe the federal tax rates could be much lower if only constitutionally mandated duties were performed. The federal government has grown like cancer grows since the imposition of the federal income tax. What we need to be talking about is how to cure federal overspending, not whether or not we think we’re paying enough in!
—George Thomas, Ogden
The overall tax rate reported by the IRS only includes those households that actually pay taxes. If you include those households that pay zero taxes, and those households that get refunds in excess of what they paid, the overall percent is significantly less than 17.6 percent and much less than the nominal rate of 36 percent that I pay. Now, I might not mind paying half of my income (including state tax and Medicare tax) if I felt the money was being spent wisely. But when I read about the $30 million we gave to Pakistani mango farmers, the $10 million we spent remaking “Sesame Street” for the Pakistani market, all while Pakistan was harboring Osama bin Laden—not to mention $100,000 for a celebrity chef show in Indonesia, $765,000 for an IHOP franchise for a politically connected franchisee in Columbia Heights, a tony D.C. area … According to a recent GAO report, three government agencies have spent $321 million in duplicative IT systems over the last four years. So you tell me, are federal taxes too high? If you collect it, they will spend.
—Joseph Fabetes, Rochester
4/10/15 (c) 2015 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email firstname.lastname@example.org.