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Bad CBS/NYT poll question on tax burden

Topics: CBS , CBS/New York Times , New York Times , Taxes

If you want to see what the public believes about the size of the federal income burden, this CBS/New York Times poll question is not the way to do it:

On average, about what percentage of their household incomes would you guess most Americans pay in federal income taxes each year -- less than 10 percent, between 10 and 20 percent, between 20 and 30 percent, between 40 and 50 percent, or more than 50 percent, or don't you know enough to say?

As a reader pointed out to me, there's no way for a respondent to know how to answer this question due to the ambiguity inherent in combining "most Americans" with "[o]n average." Many respondents might think that "most Americans" can't be grouped into one of those categories, and others might be confused by how to define "most."

As it turns out, the bottom four quintiles (i.e. the bottom 80%) pay an average effective individual federal income tax rate of less than ten percent -- an answer that was given by only 5% of respondents to the poll. However, as David Leonhardt recently pointed out, federal income taxes are only part of the overall federal tax burden; the average effective federal tax rate including payroll taxes, corporate taxes, and federal excise taxes is 22%. This number, rather than the income tax burden, is probably the more relevant one to poll on since most Americans pay more in payroll taxes than they do in income tax. Let's hope CBS and the Times go back to the drawing board with this question.

Update 4/21 8:24 PM: In response to comments on my blog, I've updated the post to clarify some ambiguous language and to correct an error (following Leonhardt, I wrongly classified capital gains taxes as separate from, rather than part of, individual federal income taxes).

[Cross-posted to brendan-nyhan.com]

 

Comments
Aaron_in_TX:

I believe our overall tax burden is in the mid to upper 30s, which puts us at the low end of industrialized countries.

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GARY WAGNER:

We also have taxes the other countries don't have, Araron. In my case, you have to add 4% state tax, 2% county tax, 7% sales tax, 2% (of the value of my home) property tax, a county wheel tax, a car excise tax. We also pay excise tax on gasoline, telephones, and cable TV. As far as I know, we still pay a tax on our phone bills to subsidize the war of 1892. Now we have healthcare tax on bandaids, wheelchairs, tampons, and other medical devices.

The companies also have to pay most of these taxes and others besides and pass them on to us.

It would be nice to know exactly how much people end up paying in tax per year but it seems that there are far more taxes hidden in the cost of what we buy than what we pay individually.

I'd have to guess that the average tax burden is actually in the 50+ area.

Somehow you would have to know the value of every tax collected on anything anywhere in the country and then divide the total income by that amount.

Then, what do you do with things like the healthcare bill that will increase the cost of our insurance premiums? Shouldn't that also be considered a tax? The cost for someone to buy insurance that doesn't want it. Isn't that a tax?

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Steven Guffey:

GARY WAGNER,
Good post. However, you had to guesstimate, and you may be a bit high, overall. For those reasons, I hope someone remembers a link to a scholarly study of this issue (Cato ?). I would find it very interesting.

As an aside, President Obama and his proxies are beating the drum for the idea that our tax rate is lower than ever for most of us. Thus, their cheerleaders say that the Tea Party and others are hysterical ignoramuses.

This is a typical PR (propaganda) obfuscation. The half of Americans who support the other half know that the bill will be presented to them immediately after the Obama is re-elected.

Being told that a drunk's reckless driving "hasn't killed you, yet" seems an apt comparison.

Republicans could never get away with such transparent disingenuousness (i.e.,"lying"). I think that being treated like Republicans by the press would have a salutory effect on Democrats. Please God, make it so!

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