Friday, December 7, 2012

Taxes on high, low, and middle incomes

About a week ago the New York Times had a story on taxes which said that over the last 20 years, the percentage of people who thought high-income people paid too little income tax had fallen, while the percentage who thought low-income people paid too little had risen.  That seemed like a surprisingly big change, so I checked the source (the Gallup Poll).  

The figure shows the percent who say taxes for the given group are too high minus the percent who say they are too low.  The changes are almost mirror images of each other, so you can combine the two sets of numbers into one--differences between opinions about the tax burden of the rich and the poor.  The Gallup Poll also asked about "middle-income people" and "you."  Those figures tracked each other closely, so they can also be combined into one.   The result is two numbers, one representing views about the tax burden of the average person and the other representing views about the relative burdens of the rich and poor.

Here are the averages for four periods:
                         Average       High/Low
1992-3               104               118
1994-9               115                 94
2003-8                 87                 92
2009-12               80                 65

Those years don't quite correspond to administrations:  I count 1993 with 1992 because the survey was taken in April and Bill Clinton's tax program wasn't passed until August 1993.  After that happened, people were more inclined to say that the average person paid too much, and less inclined to think that the rich paid too little and the poor too much.  In contrast, after the Bush tax cuts people felt considerably better about their own tax burdens; views about the gap between rich and poor didn't change.  Finally, there's been little or no change in how people feel about their own tax burdens since 2009 (I haven't checked, but I don't think the difference between 2003-8 and 2009-12 is statistically significant), but people have been much less inclined to say that the rich paid too little and the poor paid too much.

The changes in opinion through 2008 can plausibly be exchanged by actual changes in tax rates--Clinton increased them and made the system more progressive, while Bush cut them.  There haven't been major changes in tax rates under Obama, so my guess is that views about the gap between rich and poor have changed in response to political discourse--in the last few years, many Republican leaders have made a point of  saying that low income people pay too little and high income people pay too much, so ordinary people who support the party followed along.  The puzzle is why the Bush tax cuts didn't have any discernible impact on opinions about the tax burden on people with high income. 


No comments:

Post a Comment