SURVEY SAYS: What’s Your “Fair Share?”

September 22, 2011 (PLANSPONSOR.com) - There’s been a lot of talk this week about millionaires and paying their “fair share.”  

Setting aside for a second important “nuances” like what is really meant by “millionaire”, the distinctions between tax rates on income versus capital gains, varied tax brackets, uneven deductions and/or credits, or the sliding impact of the FICA tax, this week, I asked readers “What % of YOUR income do you think it’s “fair” to have to pay in taxes to the federal government?

Well, I didn’t ask for income levels – but the “sweet spot” in this week’s responses was between 10% and 20%, with roughly 30% saying they though their “fair share” was between 10% and 15%, and another 27% opting for a range between 15% and 20%. 

14% were willing to go to a range of between 20% and 25%, while just under 5% said between 25% and 30%.

Another 5.6% went with a range between 30% and 35%, and half that many were willing to go as high as 35% to 40%. 

As for millionaires – and here I meant those who actually made more than $1 million, the “sweet spot” was a bit broader in terms of responses, but probably lower than you might have expected considering the recent polling on the subject.   

The most common response – and it was provided by 21% of this week’s respondents – was that the millionaires’ fair share was in the 10%-15% range (which, according to something I heard reported earlier this week would be less than half what they currently pay, on average). 

Another 16% were inclined to place the millionaire share at 15%-20%, while 15% saw that fair range being at between 20% and 25% of income.

As for the rest:

11.4% - between 5% and 10%

  8.6% - between 25% and 30%

13.3% - between 30% and 35%

  7.6% - between 35% and 40%

The remaining 7% were pretty spread out among the higher levels.

As is often the case, this week’s survey brought with it a lot of interesting, humorous, and “spirited” responses.  On the pages that follow you'll find a liberal sampling – and yes, there IS an “editor’s choice”:

  

Why punish those that actually do pay taxes by asking them to pay more?  I would think that if they paid less in taxes, the millionaires would invest more in their businesses and/or purchase more goods . . . . which would create more jobs.  Instead of being able to put their money to use in a productive manner, they are being asked to pay more taxes to make up for the portion of the population who pays no taxes.  It seems to me that we are discriminating against those people who actually have the ability to lead this country out of the recession.

If they actually paid their share it would be more equitable, but they don't.  There are too many loopholes.

No, I am not a millionaire.  Far from it.

I like the idea of a flat tax.  That is truly fair - if you make more, you pay more - what could be easier than that?

Many millionaires inherited their money, so it is not earned income, except for the investment/capital gains part.  People who are trying to become millionaires by working hard should have a better chance to keep some more of their money so they can become millionaires.  For those of us who pay tax on virtually every dollar, it is hard to feel friendly toward those who don't.

If 10% is good enough for God, it should be good enough for the federal government.

I keep thinking that if the whole tax code was thrown out, and everyone, businesses included, paid the same flat tax, life could be much, much easier...at least you would know exactly what to expect from year to year. A flat percentage is non-discriminatory, easily budgetable and fair. That being said, as long as politicians exist to get re-elected, and people are mesmerized by glamour and rhetoric, we will continue riding the current tax juggernaut along the same self-destructive path.

No deductions, no exemptions, no lobbyists -- fair is the same across the board, so pick a percentage and EVERYONE should pay that percentage 

I think when people talk about taxes they mean "income taxes" but there are so many others like FICA, state & local.  Look at all the taxes and fees on your average utility bill.  How about the gasoline tax?  We are all paying way too much in taxes and, for most of us, there aren't any "tax shelters" - except maybe my 401(k) contributions.

These %'s are for their gross income?  Not the adj. gross?

Repeat after me: Flat Tax Rate.

I think the issue should be about the many millions who pay NO tax, even thought they have income.

In times of trouble, we should all come together and share in the burden of getting through.  Cuts in benefits and services (generally called budget cuts) affect low and middle income families.  When service funding is cut but the service is still needed (education, health care), the individual's or family's expendable income is reduced.  In the past, some have called these actions a "tax" increase.  Asking all to participate to the recovery whether through a service cut or a tax increase would be a more equitable way and only relying on budget cuts.

"I wouldn't mind spending a little more locally....I have a better comfort level of where the money goes.

I would just like to see everybody pay their share, and skip the complaints and attempts to weasel out of it.  The "class warfare" (and worse, the constant accusations of class warfare) are getting so old...don't we have bigger problems to solve?

OK - you limited this to just the federal government. When I think of all of the taxes that I pay (to state, county, township, city, schools, park districts...) and all of the forms I pay them in (income, property, utilization fees, sales tax, etc.) and the "benefits" I do or do not receive from them, my effective tax rate probably accounts for easily more than 50% of my income.  So, the lower the federal rate is, the better. 

The answer depends on which taxes you are including -- income, FICA, Medicare, capital gains, estate???

Flat rate, no deductions, allows all citizens to pay a fair share according to their income.  Those who prosper should not be penalized - they provide jobs and should be encouraged to continue doing so IN THIS COUNTRY.  A simple flat rate/no deduction tax return means we can all pay accurately so that the government gets it's fair share from each person too, not just those who don't have a cadre of accountants to find loopholes.

Whatever happened to discussions about a flat tax?

I'm not a socialist, I do not think that because someone is financially successful, it should mean that they should fund our welfare society that is economically unsustainable. I am not one of those who are well off, but instead of requiring the wealthy to fund an insurmountable deficit maybe we should eliminate our ridiculous (pork barrel and social welfare) programs or require "all" Americans to pay taxes for the right to live in this great country. If they can't pay for that right, then they should be required to perform a service that would benefit America.

WE WORK THREE JOBS TO BE IN THE MIDDLE CLASS.  MIDDLE CLASS AND UPPER CLASS WAGE EARNERS SEEM TO PAY ALL THE TAXES AND A LOT OF THE LOWER OR NO WAGE EARNERS PAY NOTHING AND GET BIG REFUNDS ON THEIR RETURNS.  I STILL THINK A FLAT 10% ON EVERYONE IS THE WAY TO GO.  FAIR TO ALL.  THERE SEEMS TO BE A LOT OF TAKERS THESE DAYS AND THAT NEEDS TO STOP WE ALL HAVE TO PAY OUR FAIR SHARE.

I'd like an outside independent forensic audit of how the various levels of government spent my tax money.  And I'd like the report to be released to the public.  For the record, a budget is not a report of how money was really spent.

 

Political use of the term "class warfare" with respect to taxation is appalling.

"Over the course of the last several years many politicians, primarily the Democrats, have been vilifying the ""wealthy"".  The problem is that they are vilifying income ranges of people that are clearly middle class.  I know that $250,000 seems like a lot of money to someone making $30,000, but it is still middle class.  The fact of perception is that anyone who has more than you do will appear ""wealthy"" to you - and certain individuals are using this perception to turn the much larger population at $30k against those above $250k.  Let's not forget that the same perception applies from those at $250k looking at those making $1M.    Today, $1M is not that much.  It's still middle class, and most people making $1M (I don't by the way) are paying their fair share of taxes on it.  It is ridiculous to compare that to Warren Buffet.  Millionaires and Billionaires aren't close to the same, and to lump them in the same category is mathematically illiterate.  To take it to a more meaningful example to most people, it would be like comparing someone at $30k per, to someone making $30 million per year.  It's much clearer that those people aren't in the same class, yet that is exactly the same relationship between a millionaire and a billionaire.  It certainly highlights the fact that those making $30k and those making $250k are much more the same.

Those that make the most money, pay the least proportionally in taxes because of the many tax breaks available to them.  I say, bring in the flat tax on all income except on income derived from interest earned (up to a maximum amount) in savings and IRA accounts and capital gains on the sale of a principle residence.

I'm a fan of the concept of eliminating the federal income tax (and the IRS) and imposing a tax on purchases. This puts everyone on an even playing field - the more you can afford to buy, the more you pay in taxes.

I only give 10% to God and he does more for me, and for the world, than the government does.

There should be a flat tax across the board. A percentage is a percentage and we would all pay the "same" and have an equal participation in taxes. Instead, the wealthy find loopholes to pay less while the poor pay little or nothing at all, so the so-called middle-class gets stuck footing the bill for everyone. Flat tax rate is the only way to make it fair and equitable across the board.

Let's all move to Puerto Rico--they get all the benefits of the US Government but pay only 12% taxes!

 

As any good compensation analyst knows, you can actually design a plan to (inadvertently) demotivate people.  Why work harder in more difficult fields when you get to keep less and less of your money than if you worked in a different field with lower pay that was taxed at a lower rate?  Why try harder if the payout curve begins to decline?

I say let's all pay a flat rate tax and save money doing away with the IRS. Besides if I make $10,000 a year and pay $1,000 in taxes anf the next guy makes $26,000,000 a year and pays $2,600,000 in taxes that is fair. The same with businesses, The large mega companies should pay the same % in taxex as the small business owner. That is fair.

The more we give them, the more they spend. If someone's going to spend my money on foolish things, I'd prefer to be the one doing it.

The best way to be "fair" is some minimal income tax then make up for it with consumption tax.  Tax people when they spend the money to buy stuff. (Exempt some basic need items, though.)  Then it doesn't matter if the poor person gets a Cadillac or a rich person gets a Cadillac, because they both pay the same tax when they buy it.  That would be fair.

We need to do away with the IRS and their regulations - their own employees don't even understand them!  Bring on the flat tax or federal sales tax and do away with everything else!

"There aren't enough millionaires that even if you taxed them at 100% could you pay for all the crap our federal government has promised to the moocher class. And let's be clear here, Obama defines ""millionaire"" as anyone making more than $250,000 a year. A lot of folks fall into that bracket. We barely do, and I can tell you we are NOT driving around in Mercedes Benzes and are not sipping cocktails on the back lawn. We feel like we are barely making ends meet and saving for the future. Our kids go to public schools.  We do not own a second home.  We take one nice vacation a year.  But yes, Obama wants to tax us more to give more $$$ to folks who pay absolutely nothing but probably have more cell phones, video games, and big screen TVs than I do.   And now yes, I do feel better."

 

My percentages are based on getting something for them. Europeans pay much more in taxes but they also get health care, education, and other things that we don't. However, yes, the millionaires should be paying more (esp that congressperson who whined about not being able to make it on $400,000 a year).

Everyone should contribute something; as your means improve your percentage of contribution to the general welfare of all citizens should increase, but there should be a limit, so that incentives to improve oneself financially should not be totally discouraged.

It is a percent, that is fair for everyone.  Why punish smart or talented individuals for "making it"?  I hope to take my 30k/ year job and make it 1m/ year someday 🙂

I am so not voting for Obama in 2012.

To quote Herman Cain: “if it’s good enough for God it should be good enough for the federal government.

"Let's have a flat tax.  No deductions.  Everyone pays.  10% on all income (earned and unearned - INCLUDING ""entitlement"" payments).  10% is what I'm supposed to offer to God; I don't think the government is entitled to any more than that! 

When I lived in PA in the early 90s, PA had a flat tax of 2% (don't know if they still do).  It took about 30 seconds to fill out the state tax return.  I thought it was the most fair tax I've ever had the pleasure to pay."

 

I think the 49% (depending on which source you believe) of Americans workers who pay nothing in Federal income tax should be paying something, the cap on Social Security should be adjusted (either raised or removed) and there should be a limit on the number of dependents you can claim.  Just because you're trying to out-reproduce the Duggar family, shouldn't mean getting that level of tax breaks.

Too tough to call for this KISS kind-of guy, but I would venture to say the solution could probably be sealed with a KISS.

Simplify the tax code. Eliminate all the loopholes. This way everyone pays their fair share. No more lobbying Congress by companies like GE to amend the already complicated tax code. Everyone and every company pays the same rate no matter what your income.

Flat tax would end this discussion.

But this week’s Editor’s Choice goes to the reader who said, “It's time for politicians with sound bites to stop taking advantage of the mathematically illiteracy of the general population."

Thanks to everyone who participated in our survey! 

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