Wednesday, July 8, 2020

The public vs. the 1%?

I realize I left something out of my last post, which said that Americans were not in favor of high taxes on the rich.  The Paul Krugman column that I mentioned said "A . . . large majority has consistently said that upper-income Americans pay too little, not too much, in taxes."  He is right--since 1992, the Gallup poll as asked if upper income people are "are paying their FAIR share in federal taxes, paying too MUCH or paying too LITTLE?"  In the latest survey (2019), 9% said too much, 27% fair share, and 62% said too little.  The share saying too little has never gone below 55%.  But as my post pointed out, when you ask how much high-income people should pay, most people don't suggest high rates.  In addition to the questions I mentioned last time, here's a Gallup/USA Today poll from 2011:  "Now thinking about the wealthiest one percent of Americans, what percentage of their income do you think they should pay to the federal government in income taxes each year?"  Among those who gave an answer (28% didn't), the mean was about 24%, and only 10% said 40% or more.

How do you reconcile these results?  The answer is that most people seem to think that people with high incomes are taxed at lower rates than most middle-income people.  A 2003 survey asked "In the United States, which group do you think pays the highest percentage of their income in total federal taxes: high-income people, middle-income people, or lower-income people, or don't you know enough to say?"  25% said high-income people, 51% said middle-income people, and 11% said low income people (13% said they didn't know).  Even among people with college degrees and people earning $75,000 or more (the highest income class distinguished in the survey), most people thought that middle income people paid the highest percentage. Other surveys show that most people know that in principle marginal tax rates increase with income, so presumably they think that high-income people are able to get out of taxes by finding loopholes. 

So when people say that high income people should pay more, they are just saying that they want them to pay at the same rate that middle-class people do, or maybe a slightly higher rate.  In reality, they already do pay at a somewhat higher rate.  Most people haven't thought about the issue all that much, so you can't make precise statements about public opinion.  But in a rough sense, Americans are getting about as much redistribution as we want.

[Data from the Roper Center for Public Opinion Research]

2 comments:

  1. At least one of the 2019 figures is wrong. Should it be something like 10/27/62?

    ReplyDelete
  2. Yes, only 9% said "too much." I have fixed it.

    ReplyDelete