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 from David and Rob, 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 Pollster.com]
I agree with Brendan's criticism of that question. Heaven only knows what it was supposed to mean.
One minor quibble with Brendan's post. He wrote: federal income taxes are only part of the overall tax burden; the average effective federal tax rate including payroll taxes, capital gains taxes, etc. is 22%.
The first clause deals with the entire overall tax burden. The second clause deals only with the federal overall tax burden. I would guess that when one adds in state and local sales taxes, state income tax, city wage tax, property tax and other miscellaneous taxes, the mean overall tax burden might be somewhere near double the federal figure -- say, 40% - 50%.
Unfortunately, these taxes are slated to get a lot bigger. The enormous federal and state deficits, the under-funded government pension and health plans, and the rising cost of entitlement spending will drive tax rates through the roof.
Posted by: David | April 21, 2010 at 06:06 PM
Brendan, you and David Leonhardt need to get this right. The effective individual income tax rate in the chart to which you link includes capital gains taxes, which are a component of federal income taxes. You can see this by looking at your Form 1040, which sums wages and salaries, interest and dividends, business income, capital gains, rents and royalties, partnership income, gambling winnings, etc., to arrive (after certain adjustments, deductions and exemptions) at taxable income.
When Leonhardt imagines that capital gains taxes aren't included in federal income taxes, he shows his ignorance.
Posted by: Rob | April 21, 2010 at 07:22 PM