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Rich don’t pay enough taxes

By Kay Bell · Bankrate.com
Thursday, December 29, 2011
Posted: 11 am ET

It's no surprise Americans aren't happy with their federal tax system.

But a new poll finds the problem isn't necessarily the taxes they're paying. Instead, folks are concerned the wealthy aren't paying their fair tax share.

In a survey conducted Dec. 7 to Dec. 11, the Pew Research Center for the People and the Press found that 52 percent of Americans say they pay the right amount in taxes.

However, fewer people now consider the overall tax system as even moderately fair. Forty-three percent of those surveyed this month said the system is fair, compared to 51 percent of people who viewed the U.S. tax system as fair eight years ago.

And roughly 6 in 10, or 59 percent, want a totally new tax system.

Political differences on tax code problems: There's no big partisan divide over the need to overhaul the tax code, reports Pew. Regardless of political affiliation, the survey found most people agreed there is so much wrong with the federal tax system that Congress should completely change it.

But there are differences between Democrats, Republicans and voters who call themselves politically independent when it comes to what bothers them most about taxes.

Most Democrats (73 percent) and Independents (57 percent) said their biggest tax concern is the feeling some wealthy people get away with not paying their fair tax share.

Republicans, on the other hand, said the complexity of the system is their biggest complaint.  That concern was cited by 43 percent of GOP poll respondents, with 38 percent of that group worried about the tax-paying status of the rich.

Pew pollsters say the closeness of the answers by Republicans "reflects substantial intra-party differences along socioeconomic and ideological lines."

Republicans who agree with the Tea Party movement are among the most likely to say the complexity of the tax system is what bothers them most; 57 percent chose that answer.

But Republicans who don't agree with the Tea Party said, by a 49 percent tally, that the feeling some wealthy people don't pay their fair share of taxes is their biggest complaint.

Tax talk, but little change: For the immediate future, though, everyone is probably just going to have to learn to live with the tax system as is.

In 2012, there will be a lot of talk, mainly from Democrats, about taxing the wealthy more. In fact, they plan to bring up a millionaires' surtax again when the payroll tax rate cut extension debate resumes next year.

And Republicans will continue to fight to keep income tax rates at their current levels or cut all of them more.

But precisely because 2012 is an election year, no politician wants to actually take responsibility or blame for any tax changes before election day.

What irritates you most about the current tax system? Will a candidate's stance on taxes affect your voting choice?

Find out what progress Congress makes on tax reform by subscribing to Bankrate's free tax newsletters. You can sign up for a Daily Tax Tip beginning Jan. 9, 2012; for a Weekly Tax Tip; or for both.

You also can follow me on Twitter @taxtweet.

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18 Comments
Ray in MD
December 30, 2011 at 2:08 pm

CP: So you want to rage at the "freeloaders" while the investor class pays 15% on capital gains & dividends but grandma pays 25% on the interest she earned when she cashes in a US savings bond. The rest of the no taxes group have either tax-advantaged situations (some of which we might think are dubious) or perhaps they had unusual expenses (like healthcare) so although their AGI seems "non-poor", their net taxable income is too low to pay taxes.
Fix the tax code, but in the meantime recover from the uber-rich the tax cut they received from that Harvard MBA grad, GWB43, because in his words, the surplus (when he took over) belongs to the American people.
Some of his statements-
"A surplus in tax revenue, after all, means that taxpayers have been overcharged...And usually when you've been overcharged, you expect to get something back."
"After paying the bills, my plan reduces the national debt, and fast," Mr. Bush said. "So fast, in fact, that economists worry that we're going to run out of debt to retire. That would be a good worry to have."
Not exactly Nostradamus.

Deadpool
December 30, 2011 at 9:28 am

But... bu... but Warren Buffet said he wants to get taxed more!!!

CP
December 30, 2011 at 8:54 am

Ray,

We all understand that many people are exempt from taxes because they have low income. But just a few points.

1) You say: "most cases how little one's income must be to be in that zero-tax category." But the very report you cite states that only half of those who pay no income tax are allowed to do so in order to maintain subsitance level income. Half does not equal most cases. Even if we assume that this is 100% accurate, it still leaves us with 25% who can afford to pay income tax but dont.

2) As I said before, we understand that some of those who pay no income tax have low incomes. But that is neither here nor there. If you pay 0% tax but still receive the benefits of those taxes, then you have no right to complain because someone else is ONLY paying an effective tax rate of 15-20%.

There are two types of people in this world.

The first type will look at a rich person, envy what they have, and wonder what they have to do to earn it.

The second type will look at a rich person, envy what they have, and wonder what they have to do to take it.

Ray in MD
December 30, 2011 at 7:27 am

Suggest you folks screaming about how unfair the tax system is go to the Tax Policy Center and read a report entitled "Why Some Tax Units Pay No Income Tax". Think you'll be astounded at the reason(s) that this is the case, and in most cases how little one's income must be to be in that zero-tax category.
Read the PDF, not just the article.
From the article, however:
"These standard income tax provisions include personal exemptions for taxpayers and dependents and the standard deduction. These provisions are part of the basic progressive income tax structure that intend to exempt subsistence levels of income from tax and to adjust for differences in ability to pay based on family size."

Frank
December 30, 2011 at 6:29 am

People who say the rich don't pay enough in taxes are either stupid or ill informed. They already pay the bulk of income taxes in this country. And I'm a middle class guy. I have no wealth envy. Matter of fact, I hope to b rich one day. The problem is as cited earlier, the complexity of the current tax code. No one understands it so you get all this confusion. And lots of people understand that. that's why you have groups out there like AFFT (the FairTax), RATE, WIN, Tax Reform Coalition, etc... And don't forget, 50% of Americans don't pay any taxs at all. How is THAT fair? I personally aupport the FairTax HR25/S13. I hope others will join me.

Save First
December 29, 2011 at 11:51 pm

Part of the issue is the fixed brackets. With technology today (70% filing electronically), why can't we have an infinite sliding scale for rates?

I'm sure there is an algorithm floating somewhere in the ether that will solve this, just a matter of who will be the first to tap into it. The "equality in taxation" theory...quantum taxation...who knows?

If someone earns X, spends Y, deducts Z, they pay A in taxes.
If someone earns X', spends Y', deducts Z', they pay A' in taxes, which may be a fractional difference from A.

No more 10-15-25-28...more like 10.125, 10.126, 10.127, etc...

ctl
December 29, 2011 at 9:21 pm

The only issue is should americans pay 5% more on amounts over 250K just like they did 20 years ago. With all that has happend the last 15 years someone needs to step up, instead those who can least afford it are being gouged.

John Q Taxpayer
December 29, 2011 at 4:00 pm

The rich pay too much in taxes. I pay too much in taxes. I wish I knew what liberal think-tank college Bankrate was hiring their writers from.

JH
December 29, 2011 at 2:17 pm

I completel agree with CP!! why should I go to work everyday and pay more in taxes so you can sit home and get money for nothing??

CP
December 29, 2011 at 1:44 pm

"What irritates you most about the current tax system?"

Well, that would have to be the fact that 50% of Americans dont pay any income tax at all yet still have the gall to say that the other 50% should be paying more.