This Tax Day, 55% of Americans regard the income taxes they have to pay as fair, the lowest percentage Gallup has measured since 2001.
The results are based on Gallup’s Economy and Personal Finance poll, conducted April 4-7, and annually since 2001. The recent high in Americans’ perceptions that their taxes were fair, 64%, came in 2003, after President Bush signed tax cuts into law and weeks after the Iraq war began.
Gallup’s history of asking this question stretches back to the 1940s. From 1943 through 1945, during World War II, few Americans complained about their taxes, with an average of 87% of Americans saying their taxes were fair. That dropped down to an average of 61% in 1946, the first year after the war.
Gallup resurrected the question in the late 1990s, when an average 48% said their income taxes were fair, including the historical low of 45% in 1999. Americans’ views of their taxes as fair improved from 51% in 2001 to 58% in 2002, shortly after the Bush administration put into place a round of tax cuts.
Perceptions of income tax fairness, perhaps surprisingly, vary little by household income level. Fifty-seven percent of those whose annual household income level is below $75,000 say their taxes are fair, as do 54% of those whose income is $75,000 or above.
In fact, there are no notable differences by most major demographic groups. The biggest differences are based on political affiliation, with Democrats and political liberals much more likely than Republicans and conservatives to believe their taxes are fair.
The gaps by party and ideology have expanded modestly since President Barack Obama took office. In 2008, the last full year of the Bush administration, 67% of Democrats and 55% of Republicans said their taxes were fair, a gap of 12 percentage points, compared with 17 points today. In 2003, the recent high point in Americans’ belief that they pay fair taxes, there were essentially no party differences (66% among Democrats, 62% among Republicans).
Thus, the decline in Americans’ belief that their taxes are fair is due mostly to Republicans’ changing views. Taxes have been at the forefront of much of the debate over economic and budgetary policy in recent years, although, in reality, federal income taxes have not changed for most Americans since Obama took office, because the president has preserved the Bush-era income tax cuts for all but the highest-income Americans.
The poll also finds half of Americans saying their income taxes are “too high,” with most of the rest (45%) saying they are about right. Two percent believe their taxes are “too low.”
Last year, 46% of Americans said their taxes were too high, tying the record low in the Gallup trend dating back to 1956. A record-high 69% of Americans said their taxes were too high in 1969.
Americans are also more likely this year (64%) than last year (53%) to believe that their taxes will be “changed so that they are higher” during the next 12 months. Thirty-one percent expect no change in their taxes and 3% expect to pay lower taxes.
Gallup has asked this question periodically over the years — in 1977 and 1978, in 1994, and three times since 2010. In almost every instance, at least a plurality of Americans have expected their taxes to be raised.
Although a majority of Americans still believe the income taxes they pay are fair, the 55% who say so is the lowest Gallup has measured since 2001, before the first of two rounds of federal income tax cuts went into effect. Since the second round of tax cuts in 2003, income taxes have held at about the same level, though Congress and the president did agree to raise income taxes on the wealthiest Americans as part of the agreement to avoid the “fiscal cliff” tax increases that were scheduled to go into effect this year.
It is possible that this tax increase affected how Americans perceive their own federal income taxes, even though very few Americans on a percentage basis would likely have seen an increase. However, nearly all working Americans are now getting less take-home pay since the Social Security payroll tax holiday expired at the beginning of this year.
The percentage of Americans who say their federal income taxes are too high is on the low end of what Gallup has measured historically, but more Americans than in 2012 expect their taxes to go up this year. It is unclear whether taxes will change this year, given that President Obama and the Republicans in Congress disagree on the need for, and the desirability of, tax increases.