April 5, 2006
Poll Shows Majority of U.S. Adults Support Major Tax Reform, Willing to Give Up Some Deductions to Make Tax System Simpler
For immediate release
Media contact: William Ahern (202) 464-5101
WASHINGTON, D.C.—A new national survey commissioned by the Tax Foundation shows most U.S. adults think the federal tax system needs major changes or should be completely overhauled, and a majority are willing to give up some deductions in exchange for tax simplification. (Veiw full survey results here.)
“The poll results show a majority of Americans believe federal income taxes are too high, the value they receive from the taxes they pay to federal government is only fair or poor, and they are unwilling to pay additional taxes even to eliminate the deficit and balance the budget,” said Tax Foundation President Scott A. Hodge.
An overwhelming 80 percent of U.S. adults believe the current federal income tax is somewhat or very complex. Nearly six-in-ten (59 percent) consider the amount of federal income tax they have to pay as too high. In addition, 80 percent believe the federal tax system needs major changes or a complete overhaul—up from 77 percent in 2005.
Majority Support Tax Reform
While political momentum for tax reform has stalled in the nation’s capital, the survey shows support for reforming the nation’s tax system. When asked to choose between a flat-rate income tax with no deductions, a national sales tax or the current graduated income tax with deductions, 33 percent of adults chose a flat tax, while 20 percent favored a national sales tax and 21 percent favored the status quo.
Willing to Trade Deductions for Simpler Taxes
“Conventional wisdom is that deductions are a stumbling block for tax reform, as voters may be unwilling to give them up in exchange for a simpler tax code,” said Hodge. “These survey results challenge that belief.”
When asked if they would be willing to give up some deductions to make the tax system simpler, a majority (52 percent) of adults said they would. Surprisingly, the survey suggests that those most willing to trade deductions away for tax simplification are the same ones who may likely benefit from deductions—adults who itemize when filing federal tax returns, who claim the home mortgage interest deduction, and with incomes over $75,000 per year.
Support for Repeal of Estate Tax
“While divided on tax reform plans, Americans appear united in one respect—their aversion to the federal estate tax,” said Hodge. When asked about completely eliminating the estate tax, an overwhelming 68 percent of adults favored elimination. Currently the estate tax is scheduled to be phased out in 2010 only to return in 2011 unless Congress takes action.
Other key results include:
• When asked if they would be willing to pay an additional $2,470 in federal taxes to eliminate the U.S. deficit and balance the budget, just 9 percent of adults said they would be willing to pay. Of those willing to pay, 63 percent believed today’s Congress would mostly increase spending and not pay off the deficit with the additional tax dollars.
• 65 percent of all adults rated the value they personally get from the taxes they pay to the federal government as “poor” or “only fair.”
• The maximum percentage of anyone’s income that should ever go to taxes is just 15 percent—the mean response given by adults—far below the nation’s tax burden of 30.9 estimated by the Tax Foundation in 2005.
• When told that an estimated 42.5 million Americans file tax returns each year, but pay no federal income tax because of credits and deductions, 63 percent of adults said that everyone should be required to pay some minimum amount of tax to help fund government.
• The federal estate tax (31 percent) and income tax (25 percent) were seen as the least fair federal taxes (from a list of 4) by adults, while local property taxes (39 percent) and state income taxes (20 percent) are seen as the least fair state-local taxes (also from a given list of 4).
Methodology
Survey results are based on a Harris Interactive® online survey conducted on behalf of the Tax Foundation within the United States between March 8 and 16, 2006 among a nationwide cross section of 2,017 adults aged 18 and older. Figures for age, sex, race, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents’ propensity to be online. In theory, with probability samples of this size, one can say with 95 percent certainty that the overall results have a sampling error of plus or minus 2 percentage points.
About the Tax Foundation
The Tax Foundation has monitored tax policy at the federal, state and local levels since 1937. Best known for its annual calculation of Tax Freedom Day®, the Tax Foundation is a nonprofit, nonpartisan 501(c)(3) organization based in Washington , D.C.
About Harris Interactive®
Harris Interactive Inc. (www.harrisinteractive.com), based in Rochester, New York, is the 13th largest and the fastest-growing market research firm in the world, most widely known for The Harris Poll® and for its pioneering leadership in the online market research industry. Long recognized by its clients for delivering insights that enable confident business decisions, the Company blends the science of innovative research with the art of strategic consulting to deliver knowledge that leads to measurable and enduring value. Harris Interactive serves clients worldwide through its United States, Europe (www.harrisinteractive.com/europe) and Asia offices, its wholly-owned subsidiary Novatris in Paris, France (www.novatris.com), and through an independent global network of affiliate market research companies.
For more information about the 2006 Annual Survey of U.S. Attitudes on Tax and Wealth, please contact William Ahern at (202) 464-5101 or ahern@taxfoundation.org. For questions about the polling methodology please contact Jennifer Cummings of Harris Interactive at (585) 214-7720.
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