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Americans' Views of Federal Income Taxes Worsen
Economy

Americans' Views of Federal Income Taxes Worsen

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Story Highlights

  • 60% say their federal income taxes are too high
  • 46% regard their income taxes as fair, lowest since 1999
  • Federal income tax now regarded as the worst tax

WASHINGTON, D.C. -- Americans’ opinions of federal income taxes are the worst ºÚÁÏÍø has measured in about two decades.

  • Six in 10 Americans say the amount of federal income tax they pay is “too high,” a level last seen in 2001.
  • Forty-six percent believe the income tax they pay is fair, essentially tying 1999’s 45% as the lowest in ºÚÁÏÍø’s trend. A new high of 51% say their income taxes are not fair.
  • More Americans say federal income tax is the worst -- or least fair -- tax, edging out local property tax.

These results are based on ºÚÁÏÍø’s annual Economy and Personal Finance survey, conducted April 3-25.

Growing Percentage Say Income Taxes Are Too High

The 60% of Americans who say the amount of federal income tax they pay is too high is up six percentage points from a year ago and 15 points from the recent low measured in 2018 and 2019. Meanwhile, 36% of Americans say their federal income tax payments are “about right,” while 3% say they are “too low.”

Historically, most shifts in opinion have occurred between the “too high” and “about right” categories, with little change in the percentage “too low.” In all but a few measures, more have said their taxes were too high rather than about right.

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Americans were last this critical of income taxes in 2001, before George W. Bush signed the first of two major tax cut laws passed during his term. Since then, no presidents have significantly raised federal income tax rates for lower- and middle-income Americans, but Democratic Presidents Barack Obama and Joe Biden both raised taxes on upper-income Americans and corporations.

Lower- and middle-income Americans, particularly those who are Republicans, may incorrectly think they are paying a higher income tax rate under Biden than before he took office. It is also possible that Americans’ income tax bill is higher than in the past because they have moved to a higher income tax bracket due to income gains, as wages have increased at a faster pace since 2021 than in most years since 2000. Also, with consumers paying more for goods, energy and housing amid high inflation, they may be less tolerant of the bite taxes take from their pay.

Before the 2001 tax cuts went into effect, the percentage of Americans saying their taxes were too high often exceeded 60%, including the record high of 71% in 1952.

Since 2020, Donald Trump’s last year as president, there has been a nine-point increase in the percentage of lower-income Americans saying their taxes are too high (to 50%) and an eight-point increase among middle-income Americans (to 58%). Among upper-income Americans (those whose annual household income is $100,000 or more), there has been an 18-point increase to 66%.

There is a political component to these attitudes. Republicans (71%) are now sharply more likely to believe their taxes are too high -- under a Democratic president -- than they were in 2020 under a Republican president (46%). Democrats’ attitudes haven’t changed (40% in 2020 and 41% now), while the 14-point increase among independents, from 48% to 62%, is about half as large as the change among Republicans.

Perceptions of Income Tax Fairness Near Record Low

Majorities of Americans have typically believed that the income tax they pay is fair. Now, for only the third time in ºÚÁÏÍø’s trend, that is not the case -- 46% say the income tax they pay is fair, similar to the record low of 45% in 1999. Fifty-one percent currently say their taxes are not fair, the highest ºÚÁÏÍø has measured to date.

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Partisans’ opinions of income tax fairness follow a similar trajectory to their views of the amount of income tax they pay. Republicans are much less likely now than in 2020 (35% vs. 63%, respectively) to say their taxes are fair, while Democrats’ views are unchanged (63% in both years). There has been an 11-point decrease among independents, from 56% to 45%.

Declines in perceived fairness since 2020 are similar among income groups, including a seven-point drop among lower-income Americans (from 61% to 54%), 11 points among middle-income Americans (from 59% to 48%) and 12 points among upper-income Americans (from 55% to 43%).

Federal Income Tax Now Viewed as the ‘Worst Tax’

The latest poll finds that Americans’ views of the worst, or least fair, tax has changed, as they now regard federal income tax as the worst among five common government taxes.

Thirty-four percent of U.S. adults say federal income tax is the worst, up from 20% the last time the question was asked in 2005. Federal income tax has overtaken local property tax as the least fair, named by 29% in the current survey and 35% in the prior survey.

Between 10% and 14% of Americans say federal Social Security tax, state income tax and state sales tax are the worst taxes. There have not been meaningful changes in the percentages choosing these options since 2005.

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Republicans are much more likely now than in 2005 to view federal income tax as the worst, with 41% choosing it compared with 16% in the prior survey during Bush’s administration. Most of that 25-point increase has been offset by decreases in Republicans choosing federal Social Security tax (down nine points) and state sales tax (down seven points) as the least fair.

Independents are also considerably more likely to say that federal income tax is the least fair, from 21% in 2005 to 34% now. Fewer independents than in 2005 say that state sales tax or local property tax is the worst tax.

Democrats’ opinions of federal income tax have not changed. More Democrats now believe state sales tax is the least fair (increasing from 11% to 18%), while fewer today choose local property tax (decreasing from 35% to 28%).

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Middle- and lower-income Americans are about equally likely to choose federal income tax and local property tax as the worst taxes. Significantly more upper-income Americans say federal income tax is the worst (37%) than say this about local property tax (26%).

Bottom Line

Americans’ opinions of federal income taxes, which had been relatively accepting for the past two decades, have become more critical. It is unclear to what extent this is a function of Americans’ paying more in federal income taxes in dollar terms, reaction to larger macroeconomic factors such as inflation and the health of the U.S. economy, or misperception of the reality of their personal tax situation, possibly influenced by their political beliefs.

Much of the recent shift is attributable to Republicans’ more negative views of income taxes under a Democratic president than a Republican one, although Republicans have been more critical of taxes under Biden than they were under Obama. Between 2009 and 2016, when Obama was president, an average of 59% of Republicans said their income taxes were too high and 47% said they were fair. Since 2021, those averages are 67% and 42%, respectively.

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