Study: People Prefer a Progressive Tax Structure That’s Geared Toward Fairness
Over 75 percent of Americans surveyed in a recent study said the U.S. tax code is currently “complex” or “extremely complex,” according to a press release issued September 13, 2016 by WalletHub, a personal finance website owned by Washington, D.C.-Based Evolution Finance, Inc. The results are based on a nationwide survey of 1,040 people conducted between August 26, 2016 to August 29, 2016 by WalletHub, with a 3.1% margin of error. WalletHub normalized response data age, gender and income to reflect U.S. demographics for income-earning adults.
Other findings include:
- Nearly half of respondents, 47.8%, said the fairest possible tax code would have fewer deductions than current U.S. tax code.
- Nine out of 10 respondents said investment income should be taxed at least as much as wages.
- Over half, 57.1% of those surveyed, said wages and investment income should be taxed equally, while one-third said taxes on investment income should greater than taxes on wages.
- About one in four respondents, 26%, support a flat income tax.
- Nearly three-fifths of participants, 57.8%), said corporations should be taxed a higher rate than consumers.
- Respondents said taxes on wages and corporations were the “least fair” and taxes on alcohol and tobacco was the “most fair.”
- Over half of participants, 56.7%, ranked “tax fairness” as more important than what is best for the economy.
- Overall, 71% of surveyed Americans prefer Clinton's tax plan over Trump’s.
James Edward Maule, Professor of Law at Villanova University of School of Law, who participated in WalletHub’s expert panel to interpret the results said he agreed with the majority of respondents who believe investment income should be taxed at least as much as wages. “Income is income; a dollar is a dollar,” Maule said in a Q&A posted on WalletHub. “When shopping, the shopkeeper doesn’t ask whether the dollar being spent came from wages, interest, capital gains or pension.” Vaughn E. James, Judge Robert H. Bean Professor of Law at Texas Tech University School of Law, who also interpreted the data, noted that, theoretically, corporations already pay a higher tax rate than individuals. “However, with the many deductions corporations receive, their effective tax rates are much lower,” James said. “We need to cut down on these deductions and allow corporations to pay the tax rates stated in the IRC.”
Meanwhile, panel member Robert M. Finkel, Business and Taxation Lawyer at Morse Barnes-Brown & Pendleton and Adjunct Professor of Law at Boston University, attempted to explain why 71% of respondents prefer Clinton’s tax policy towards the rich over Trump’s when the candidates’ names are not disclosed. “Most people still support a progressive tax structure,” Finkel told WalletHub. “They believe that the U.S. presents the very best platform for business; that the wealthy have benefited from the availability of this platform; and that the platform costs money. “In a very real way, each of us, poor, middle class and rich, are partners in creating and maintaining this platform,” Finkel said. “The progressive structure of the tax system, in part, reflects a return on this platform.” James’s response to the data regarding the candidates tax plans was more blunt: “Hers makes more sense.”
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