Are you tempted to fiddle around a bit when filling out your tax return? And if you did, would it be a crime? For many Americans, the answers to these questions are not as clear as one might expect.
A new Harris Poll on the subject of taxation actually shows a country mired in cynicism and distrust, both in relation to how taxes are collected and public spending funded by tax dollars. And it raises questions about the willingness of Americans to circumvent, stretch, and even violate tax laws.
The results speak of a system whose very complexity breeds confusion and suspicion. It’s a mess that our political leaders would do well to clean up, not only because it would make good fiscal and economic sense, but also because it would help restore civic trust and accountability.
Even before there was a United States, citizens here rebelled against paying taxes. That hasn’t changed, according to a survey we conducted of more than 1,000 demographically representative adults in March. A total of 57% of American adults believe they are taxed at unfairly high rates, according to our survey. This extends to all cohorts – age, gender, income, education, and race/ethnicity.
The only difference is in the degree: A whopping 78% of men aged 45 to 54 say they are overtaxed, the highest proportion of any group. People with household incomes between $75,000 and $99,900 per year (71%) and university graduates (57%) are also more likely to feel overtaxed.
As for what the government does with that revenue, nearly three-quarters of American adults disagree with how it is spent. This is not surprising, given the incredible range of government spending – from health care and defense to interest on the federal debt, to name a few of the biggest. Just about anyone can find something they don’t like, which can make feelings of overwork worse.
You can also see those sentiments where people suspect they are paying too little. Half of American adults say companies are most likely to submit misleading tax returns. Nearly 6 in 10 people also say that people with high incomes are more likely to cheat than people with low or middle incomes. (Reality, by the Internal Revenue Service: Three-quarters of tax evaders are individuals – mostly middle income – the rest are corporations.)
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It’s perhaps unsurprising, then, that many Americans occupy a moral gray area when it comes to paying taxes. First, they cannot agree on what actually constitutes fraud. Nearly two-thirds of American adults say deliberately misreporting income is tax evasion. (Note to the remaining third: lying about your taxes is, in fact, a crime). But a slight majority (52%) say there is no difference between under-reporting and using loopholes to reduce what one owes.
Overall, nearly 6 in 10 American adults say it would be a good idea to use loopholes to owe less. The share jumps to two-thirds among those earning more than $100,000 a year and college graduates. Interestingly, most millennials, those currently between the ages of 26 and 41, say that misrepresenting their personal finances to reduce their tax bill is not criminal.
Millennials are an interesting group when it comes to taxes. Despite their reputation for progressive activism, their tax views exemplify a libertarian streak: they are the second most likely group to believe they are overtaxed, the biggest proponents of loopholes and tax evasion, and the only generation in which a majority says they shouldn’t have had to pay taxes to support their community’s resources.
Every few years there is a big push to reform the tax code – everyone seems to agree on the idea of simplifying it by getting rid of unnecessary loopholes and tax breaks. But one group’s waste is another’s essential support, and somehow every reform effort seems to play with marginal rates without greatly simplifying the overall structure. The result is a thicket that fosters doubt and grievances. It’s time for politicians to try again and opt for more holistic changes.
In the meantime, when you feel that wave of bitterness about writing another big check to the government this month, know that you’re not alone: Most Americans feel the same way.
Will Johnson is CEO of The Harris Poll, one of the world’s leading public opinion research companies.