Here we are on April 15th and it’s time to take a look at how people perceive their own financial situations to see if they’re in line with reality. We’ll start at the bottom income level and go to the the top using the latest Gallup polling info.
1. “The Poor Aren’t Paying Enough!” -23% Of Americans
“Nearly half of Americans, 49%, believe middle-income people — a group many Americans consider themselves part of — pay too much in taxes, up from 42% a year ago and the highest Gallup has found since 1999.”
Considered low income? Congrats, despite barely making it, nearly a quarter of Americans think you should be paying more taxes and that includes 11% of Democrats. And it doesn’t stop there. We can get more specific.
Granted, people just starting out always struggle more than those that have gotten themselves established but combined with the boatloads of debt Millennials are carrying being viewed as not doing your part as well seems particularly unfair. Remember, this is now a baby boomer economy. Millennials aren’t running anything at all.
Also, notice how those lines have all steadily tightened together since 1992? Keep that in mind. It has to do with scarcity and I’m going to come back to it.
2. The Middle Class Basically Agrees On Taxes Across Parties
This one is actually surprising. From the amount of anti- tax rhetoric from the Right I would have imagined that something like 70% of Republicans and/or Independents would say they were TEA (Taxed Enough Already). More Americans believe the Middle Class (49%) is being taxed too much than believe the Lower Class (41%) is taxed too much.
Only 7% percentage points separate those who think they’re paying a ‘fair share’ and ‘too much’. Of course almost no one thinks they’re paying too little. However, this is a flip from recent years when Middle Americans believed they were paying their “fair share” more than taxed “too much.” In the 90s it was the opposite by a long shot but it did balance the budget.
the perception has grown since 2012 that middle-income Americans pay too much in taxes; this comes as income taxes increase for the first time in 20 years, though mainly for the top earners. President Barack Obama and Congress allowed the Bush tax cuts on the marginal rates for the highest income earners to expire last year, which increased the tax rate for 2013 income from 35.0% to 39.6%. Other taxes, such as capital gains taxes, have also increased, and the bill is now coming due for many taxpayers.
3. Everyone Wants The Rich To Pay Everything
Being the fat wallet at the dinner party means everyone’s always looking to you and this year is no different. 61% of Americans said that the wealthy don’t pay their fair share.
However, that’s 9% lower than it was in 2005 when 68% believed they weren’t paying their fair share. Taxes didn’t go up for the wealthy then either. Back in 1992 taxes were higher for the wealthy and Americans still didn’t think they were paying enough. Poor John Galt, he just can’t win. For purposes of determining how the economy is doing and how Americans are doing, this one is confusing. The higher than average unemployment and underemployment rate could be driving down a demand to tax the upper class more in the hopes that somehow that will equal jobs. It never does. Rich people invest and you don’t pay salaries out of investments.
4. Everyone Hates Corporations (Except The Folks That Own Them)
Only 20% of Americans believe corporations are paying their fair share in taxes. That’s the lowest of any of the above groups.
Granted with public displays such as GE’s “we don’t pay taxes” incident a few years ago and the general perception that offshoring and globalization has allowed corporations to legally move taxable money out of the U.S., it’s unsurprising that Americans who can do neither disapprove of corporations. What’s truly surprising is just how little this perception has changed since 2004. The numbers are almost flat in every category. I don’t know what to say about that. Maybe someone in the comments will.
5. Unemployment Is Still Pretty Darn High And Wages Are Pretty Darn Stagnant
The below is a graph I made at the Bureau of Labor Statistics. It spans from 1992 to present because that’s the time period that Gallup used. If you see the far left, where the graph ends, you’ll note that it’s still higher than at any point in the early and mid 2000s. Granted it’s far lower than in 2009 and 2010 but it’s still high at 6.7%
Additionally, wages have fallen against inflation since 2011 and they were barely exceeding inflation prior to that. Here’s a graph.
So what that means is that corporations are not/not providing raises. So we have a situation where many in the U.S. are just treading water and the economy is not expanding the population or wealth of the work force. So there’s pressure from too little jobs, too little money, and now people believed their being taxed too much. All of this is exacerbated by your money being worth less because of wages falling below the rate of inflation which causes your money to be worth less.
The Middle Class which makes up the majority of the U.S. is feeling squeezed and squeezed badly. This is what was being reported in 2012 (the most recent data) and it hasn’t changed. From here, originally.
- Last year the median wage hit its lowest level since 1998, revealing that at least half of American workers are being left behind as the economy slowly recovers from the Great Recession. But at the top, wages soared — the latest indication in a long-running trend of increasing inequality, with income gains going to top earners while the majority of workers see stagnant or falling wages.
- In 2012, the data show, 67.1 percent of workers earned less than the average, up from 66.6 percent in 2011 and 65.9 percent in 2000. When a rising share of workers makes less than the average wage, it is another sign that wage increases are taking place only high on the income ladder, not on every rung.
- Since 2000 the population has grown by more than 11 percent, but the number of people with jobs increased just 3.7 percent. That is, population is growing about three times as fast as jobs are.
- Since 2000, corporate pretax profits, adjusted for inflation, have more than doubled, reaching record levels.
- Pretax profits of all firms in 2012 totaled $1.77 trillion, compared with $800 billion in 2000. That is a gain of 121 percent. During the same period, total real wages grew by just 7 percent, less than the 11.2 percent population increase.
So, it’s no wonder the Middle Class thinks everyone else needs to pay more and that they should pay less. They have less in the first place but once you start cannibalizing the poor for tax revenue you have arrived in a very dark place.
Now go pay your taxes.