Tax policy -- who pays what and how -- is a hot-button issue.
Politicians from both parties cry out for reform, yet there is
little consensus about what needs to be done. And while
politicians and pundits argue, everyday Americans are struggling
to navigate an increasingly complex tax code.
With tax season behind us and the 2014 midterm elections ahead
of us, we thought now would be a good time to find out what
exactly Americans think of our current tax system and how it
could be improved.
To investigate attitudes toward taxation, WalletHub.com
conducted an original online survey of 1,086 Americans. The
sample was designed to be nationally representative of all
Americans by age, race, and gender.
- More than 80% of respondents rated the current tax code as
either "complex" or "extremely complex."
- A full 44.2% believe the fairest possible tax code would
have fewer deductions than today.
- An overwhelming 90% of respondents believe income from
investments should be taxed at least as much as wages:
- Well more than half (57.64%) think wages and investment
income should be taxed equally; 33.06% say investment income
should be taxed
- Less than one-quarter (24.31%) of respondents support a
flat income tax.
- Almost two-thirds of respondents (65.10%) believe
corporations should face higher tax rates than consumers.
- Americans view taxes on wages and gasoline as least fair;
taxes on alcohol and tobacco seen are as most fair.
- Americans view tax fairness (61.23%) and tax equality
(20.81%) as more important than whatever is best for the
Investment and wage income
How to tax income from investments relative to wages has been a
major area of disagreement among politicians. Current policy
taxes income from investments at a lower rate than income from
wages, which means someone like Warren Buffett pays a lower
effective tax rate than his secretary.
We asked respondents what they thought is the fairest
possible relationship between tax rates on investment income
and wages -- should tax rates be higher on wages or on
investment income, or should the tax rates be the same?
- Over 90% of respondents believe income from investments
should be taxed at least as much as income from wages.
- Notably, we did not see any significant differences by
income, age, or education. Across groups there appears to be
strong support for higher taxes on investment income,
relative to current policy.
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