Taxing time - public opinions on taxation

American Demographics, April, 1997 by Tibbett L. Speer

Remember the Boston Tea Party? Taxes were one of the big reasons why the American colonies declared independence from British rule to begin with. We're still up in arms over the issue.

When it comes to taxes, our nation teems with schizophrenics. On one hand, we love democracy. On the other, were loathe to pay for it. Internal Revenue Service workers wince as they recall the vials of blood, packets of feces, and the undershirt (off someone's back) mailed to them by disgruntled taxpayers. But IRS staffers also receive thank-you notes, as well as hundreds of Christmas cards each year.

Proportionally speaking, taxes far outstrip an other expenditure categories. In the four decades since 1955, the bite from combined taxes of all types has deepened from about 28 percent of the median incomes of single- and dual-income families in the U.S., to an estimated 36 percent and 38 percent, respectively. That's more than twice as much as two-income families spend on homes and households; four times more than on food; nearly five times more than on medical costs. No wonder we tighten our grip on those No. 2 pencils. With T-Day, April 15, at hand, it's a fitting time to probe boldly yet gingerly into this sensitive subject.

THE FEDERAL TAB

About 119 million income tax returns poured into the IRS last year. That was up from 112 million in 1990. Individuals paid $590 billion in 1995 income taxes, representing 39 percent of the federal government's entire take. Corporations chipped in another 10 percent; Social Security, retirement and insurance premiums, 32 percent; excise, customs, estate, gift, and miscellaneous taxes, is percent; and borrowing to cover the deficit, 11 percent.

Here's where those dollars went: Social Security, Medicare, and other retirement programs, 36 percent; national defense, veterans, and foreign affairs, 21 percent; social programs, 18 percent; net interest on the debt, 15 percent, physical, human, and community development, 8 percent; and law enforcement and general government, 2 percent.

To support this gargantuan system, the vast majority of us pony up our payments on time and as directed. But do we believe we get our moneys worth? Not exactly.

Just 42 percent of Americans believe they get their money's worth from federal income taxes, according to a survey conducted by Maritz Marketing Research, Inc. of Fenton, Missouri, for American Demographics. Forty-eight percent say they do not, and 8 percent don't know. Women are more disenchanted than men; 38 percent of female respondents voice satisfaction, compared with 46 percent of their male counterparts. Faith increases with age. Among 18-to-24-year-olds, 39 percent speak positively. In the 65-and-older set, 46 percent do. Income -- or lack thereof -- has an effect, too. Slightly more than half of the poorest group with annual household incomes of $15,000 or less are convinced that their taxes provide benefits that are worth the expense. Just 40 percent of the affluent with incomes of $65,000-plus agree.

Social Security taxes (FICA) draw the same amount of negative reaction. As with federal taxes, 42 percent of all adults think these taxes merit their cost. Women are more likely than men to feel this way, A percent versus 41 percent. One-third of all adults think Social Security taxes are not worth it. Its indicative of the confusion surrounding this program's immediate future that such a big bloc of people -- 25 percent -- haven't a clue and don't mind admitting it. As for the elderly, well, they've got theirs and they're happy. Eighty percent of respondents aged 65 older say FICA taxes are worth it. Fewer than half of people in their 20s through 40s agree. Those on the brink of retirement, aged 55 to 64, turn in a middle-of-the-road 51 percent approval rating.

Despite doubts about federal taxes, dollar-for-dollar value, taxpayers are a much more contented lot than they were in the bitter tax-revolt years of prior decades. In 1978, 29 percent of Americans felt federal taxes were fair, according to Roper Starch Worldwide, Inc. of New York City. By last year, 43 percent thought so. That's why former Senator and presidential candidate Robert Dole's proposed 15 percent federal income tax cut failed to ignite the electorate. Not to mention that half of us suspect our state and local taxes would increase if federal taxes declined.

"When the country is in a good period, I don't think people mind as much about paying their taxes as they do during bad times," says Philadelphia-based IRS public affairs officer Gerri Seravalli. "There's a feeling within the country just like there is in families: when it's in a good mood and all's right with the world, people don't complain so much."

Probably not, yet people remain far happier about the value they get from mail service, telephone service, banks, electricity, doctors, hospitals, and cable television than they are about their taxes, either federal or local. Year after year, taxes pull in the worst ratings in Roper surveys, ranking just below ever-unpopular car insurance. This is because most of us believe government wastes money -- especially at the federal level. Half of the people responding to Maritz's question about why they don't feel they get their money's worth from federal income taxes say the government provides good services, but does so inefficiently. "It's a beast," says Beth Painter, a 42-year-old farmer in Cripple Creek, Virginia. "These idiot bureaucrats feel like they have a blank check."