American’s opinion on tax reform in one (long and confusing) sentence

August 1, 2013 — Leave a comment

With all the talk about tax reform swirling around the news lately, I thought I’d take a few hours to compile some polls on what Americans really think about tax policy.  If the majority opinion was mashed into one American rambling statement, here’s what it would sound like:

The IRS sucks; Obama’s handling of the IRS sucks; Congress sucks (but not because they’re sucking on tax reform);  wealth should be re-distributed, but it can’t be through a tax policy that re-distributes the wealth; I’m definitely paying too much in taxes, but I think my tax rate is fair.. did I just contradict myself?;  oh well, I actually don’t care that much; you see, I don’t know much about taxes, but I definitely don’t like them!

If you’re confused, you should be.  If you think this is a joke, it’s not (not really, at least).  Let’s break America’s sentiment down, phrase by phrase:

The IRS sucks:  

Following the IRS scandal over its unfair targeting of mostly conservative groups in their applications for tax-exempt status, Gallup conducted a poll on American’s opinion of the government’s revenue collector.  Drum roll please….. 42% of Americans say the IRS is doing a “Poor” job, 29% said “only fair,” and only 27% said “excellent.”  That’s a -15% net positive rating.  Now, the IRS has never been particular popular, but this level of displeasure is unprecedented.

Needless to say, the agency has some work to do to repair its image.  That won’t be easy though, because the same poll revealed that 60% of Americans believe the IRS abuses its power, and 62% believe it has more than enough money to do its job.  Unfortunately for the IRS, they don’t.  A 2012 IRS Watchdog report revealed that the agency receives too little funding to do its job properly. Over the past three years, the IRS budget has declined, with the biggest reductions coming in FY2013 through the sequestration.  Now House Republicans are proposing slashing the agency’s budget by another $3 billion – nearly a quarter drop from what was approved in March.  Ouch.

Obama’s handling of the IRS sucks:  

50% of national adults believe high ranking officials in the Obama administration were aware of the IRS targeting of conservative groups.  Despite an FBI investigation, Treasury probe, and three separate congressional investigations, nothing –  not a single congressional testimony or shred of documentary evidence – has linked the Obama administration to the scandal.

The President has limited power over the IRS, but does have two political appointees.  He fired one, the acting commissioner, immediately after the scandal. The other – the IRS Chief Counsel – still retains his post.  The President has repeatedly called the scandal “unacceptable,” but that’s not good enough for America.  58% of Americans disapprove of his handling of the situation.

Congress sucks (but not because they’re sucking on tax reform):

Congress’ approval rating is abominably low – no need to cite a poll for that fact.  Yet, despite not having passed comprehensive tax reform in 27 years and having added so much to the Internal Revenue Code that it now topples 70,000 pages, only 1% of Americans who disapprove of the job congress is doing cited inaction on tax reform as a reason for their disapproval.

Wealth should be re-distributed, but it can’t be through a tax policy that re-distributes the wealth

60% of Americans believe wealth should be more evenly distributed among a larger percentage of people in the U.S. They have a point: the top 20% own 85% of America’s wealth, and it’s only getting worse.  One way to alleviate that is by increasing taxes on the rich.  The top 0.1%, for example, capture nearly 10% of all the wealth in America, but their tax bills have actually fallen recently, to about 23%.  (See our post: Did the rich get richer because their taxes got smaller?).  But does America want to tax the rich in order to redistribute the wealth?  Sort of: 52% support heavy taxes on the rich to lessen income inequality, but that margin is well within the poll’s sampling error.  Anyone have any better ideas?

I’m definitely paying too much in taxes, but I think my tax rate is fair.. did I just contradict myself?

Yes America, you did.

Gallup Editor-in-Chief Frank Newport reveals that 55% of Americans perceive their income taxes as fair, the lowest percentage Gallup has measured since 2001; however, the same poll found that 50% also believe their taxes are too high, with 45% of respondents saying they are too low – figures consistent with results from the last decade.  Historically, Americans are actually in a period where they are LESS likely to complain about taxes.  Anyone else find that surprising?  Still, make up your mind America – if you think you’re tax rate is fair, then don’t complain about it being too high.

Oh well, I don’t really care that much

When compared with 12 other major issues, reforming the tax code ranked significantly below the overall average as a top priority for americans.  Nine other issues: creating more jobs, helping the economy grow, reducing the federal deficit, making government work more efficiently, improving access to healthcare, reducing the costs of healthcare, improving education, reducing poverty, and addressing the financial problems with social security and medicare were all more likely to be considered a top priority for Americans.

You see, I don’t know much about taxes, but I definitely don’t like them!

The American Recovery and Reinvestment Act – the $800 billion stimulus package passed in 2009 – contained over $300 billion in tax cuts.  Most families  saw about $70 more in take home pay every month.  But three months later, when asked whether the Obama Administration had increased, decreased, or kept taxes the same, here’s what they said:

  • 24% of respondents said they INCREASED taxes.
  • 53% said they kept taxes the same
  • And 11% said they didn’t know

One thing is for sure though:












5% love it? Really?

JDKatz: Attorney's At LawJDKatz, P.C. is a full-service law firm focused on tax law and estate planning. We are dedicated to minimizing your existing liability and risks while providing valuable tax planning to streamline your tax issues in the future. Please call us at 301-913-2948 to schedule an appointment to meet with one of our trusted attorneys.

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