Taxing time - public opinions on taxation

American Demographics, April, 1997 by Tibbett L. Speer

Critics say that's not the point, that it's the effect on individual households that matters. Last year's imaginary "Tax Freedom Day," the first day the average taxpayer got to keep all his or her earnings (having finally made enough to pay the years tax bill), did not arrive until May 7, reports the National Taxpayers Union, a non-partisan watchdog group with 300,000 members. John and Jane Citizen are fed up with overtaxation, according to this organization. As proof, it points to a flurry of anti-tax ballot measures that passed in the November 1996 election.

"It's not as if people are reading economic charts or calculating marginal tax rates," says Pete Sepp, vice president of the Alexandria, Virginia-based group. "It's that they're sitting down with the family and saying, `I'm making a lot more money, but we're not getting ahead." Citing the calculation that taxes devour 38 percent of the median household's income, Sepp says 25 percent would be more appropriate. Under our current system, he adds, if household health-care expenditures are combined with taxes, the burden becomes 46 percent. That's in the range of heavily taxed socialist countries where health care is covered by government.

You don't have to be a rabid anti-tax activist to suspect that if you scratch the surface of most any taxpayer -- particularly blue-collar workers and people who never went to college -- you'll find someone who'd rather pay less to the government. Agreement stops there. There are countless ways to alter our tax systems. We insist that fairness matters more than the amount of money raised, or the social goals furthered, at least that's what people told Roper in 1990. But what is fair? When it comes to taxes, "fair" usually means shoving the burden onto foreigners, big business, the wealthy, or people who drink or smoke. In other words, anybody but us.

Foreign corporations within the United States are the perennial favorite target. Eighty percent of respondents to a 1993 Roper survey thought a tax increase on these firms should be seriously considered. Surcharges on millionaires came in second, followed by higher liquor taxes and higher cigarette taxes. Other popular alternatives selected by 60 to 67 percent of adults include a one-time federal amnesty program to collect unpaid taxes, an increase in the tax-rate ceiling for the wealthiest, and higher corporate income taxes. On the other hand, judging by the response to potential taxes that would affect a larger share of the public -- on Social Security benefits, gasoline, a national sales tax, or airport taxes to be paid by air travelers -- you'd have thought the question was: "Would you like to try a tax audit?" In other words, no thanks.

Tax fever is near its peak right about now. That's certainly true at the IRS, which has been as vulnerable to government downsizing as any other agency. The IRS has seen its employee roster drop from 115,000 to 104,000 in the past four years. To simplify its workload as well as ours, the IRS electronic home page (www.irs.ustreas.gov) went online in January 1996. By January 13 of this year, people were logging on a rate of 1 million a day to download forms, learn about tax law changes, and find answers to commonly asked questions.