Taxes And Public Opinion In 2023

Gallup will likely release its yearly poll on how Americans view taxes soon. If the past two years are a guide, around half of adults will tell the pollsters that the federal income tax they pay is too high with around four in ten saying it is about right. The first time Gallup asked the question in 1956, 55% said they were too high and 35% about right. For the past 20 years, responses to the question have moved in a narrow range. Very few people (3% in 2022) ever say their federal income taxes are too low.

Fox News provides a different perspective, asking registered voters how “concerned” they are about what they pay. In March 2023, 39% said extremely and another 32% said they were very concerned. Concern about inflation, crime rates across the nation, and political divisions in the country was higher. In the poll, the overall level of concern about taxes was identical to concern about book banning by local school boards.

In another question Gallup has asked for decades, a slim majority believe the amount they pay in income tax is “fair.” Fifty-four percent gave that response in 2022, while 44% said unfair. When the question was first asked in 1943, 85% gave the “fair” response. In the new Pew Research Center poll, however, 56%, the highest response since 2019, said they were paying more than their fair share “considering what they get from the federal government”. More Democrats and Republicans are giving the “more than their fair share” response than in the past.

Fox followed up its question on overall concern with another one asking registered voters about proposals to reduce the deficit. Sixty-eight percent favored increasing taxes on incomes over $400,000 for this purpose. In 2012, when the pollster asked about increasing taxes on incomes above $250,000, the response was a virtually identical 69%. Pollsters use different income thresholds, but most people in recent years seem to want to raise taxes on incomes above around $200,000. Sixty-three percent also favored increasing taxes on businesses and corporation, up from 48% in 2011. When asked about raising income tax rates on all Americans to reduce the deficit, only 17% supported the idea.

When asked by Pew this year what bothered them about the federal tax system, around 60% said the fact that some corporations and, separately, some wealthy people don’t pay their fair share bothered them a lot. Fifty-three percent were most concerned about complexity. Trailing behind, 38% were bothered a lot by the amount they paid. Republicans were most concerned about complexity, and Democrats about corporations and people not paying their fair share.

The difficulty Washington will have dealing with the deficit and entitlement spending going forward was clear in several questions in the Fox News poll. When asked which of two things was most important to them, 26% said reducing the budget deficit, while 71% said continuing to fund entitlement programs such as Social Security and Medicare at their current levels was. In separate questions, 21% said the funding of Social Security was a crisis (43% a major problem), and 28% gave that response about the national debt (50% a major problem). Only 16% supported reducing future Social Security benefits for some future retirees.

Should taxes emerge as a more substantial issue, Republicans may have a political advantage. In a Fox News February poll, 52% said Republicans were better able to handle the issue, and 44% the Democrats. Other polls have shown a closer division of opinions. In the January ABC News/ Ipsos poll, 41% approved of the way Joe Biden was handling taxes, and 57% disapproved. His ratings have been steady since Ipsos first asked this question in October 2021.

Since 1977, a majority have told Gallup that the taxes they pay will be higher next year. Nearly six in ten, 57% in 2021, expected that to be the case and 33% expected no change. Only 8 percent expected them to be lower. With inflation concerns high, we might expect greater concern about taxes, especially when people expect them to be going up. But in 2023, there is little indication of the kind of concern we saw in the late 1970s. In the new early April Economist/YouGov poll, when asked which of 15 issues was most important to them, 5% said taxes and government spending. The top three issues were inflation (19% most important), followed by health care (12%), jobs (11%). Ten percent of Republicans, 7% of independents, and just 1% of Democrats said taxes was their top issue.

Perhaps Americans’ muted concern about taxes is because people don’t believe anything will change, and they are inured to paying more in total taxes each year. They stopped believing politicians’ promises to cut taxes a long time ago. Many Americans have little federal tax liability and that, too, may be contributing. Whatever the case, taxes aren’t top of mind for most Americans in 2023.