How Americans would change the tax system

Republican presidential hopeful Mitt Romney supporters in Lehigh, Fla., January 24, 2012. How do Americans feel about taxing millionaires more?

Adriene Hill: The number that really got people talking when Romney released his taxes was the amount of money he paid Uncle Sam, which brings us to our weekly Attitude Check: we want to know how Americans feel about taxes -- the taxes they pay, and those paid by their BMW-driving neighbor.

So we turn to Frank Newport, as we do every week. He's the editor-in-chief at the polling firm Gallup.  Good morning Frank.

Frank Newport: Good morning.

Hill: So how do Americans feel about the taxes they pay?

Newport: Well, Americans generally speaking feel a lot better about the taxes they pay now than they did in the past. We’ve seen a clear indication that over the last decade, Americans have become less and less negative about taxes -- and that’s probably a result of the Bush tax cut. Americans still don’t think the amount of taxes they pay is necessarily too low, but we certainly don’t have the angst about taxes that we had ten or fifteen years ago.

Hill: And how do we feel about the taxes wealthier people pay?

Newport: Ahh — that’s a different question. That’s one of the most verified and replicated findings we have in American survey research over the last year or two. Consistently, 60 to 70 percent of Americans -- right in that range --  say that the upper income Americans or wealthier Americans, however you want to define it, need to pay more in taxes.

In fact we just asked Monday night just before President Obama’s state of the Union Address: do you favor higher taxes on upper income Americans. Sixty-three percent said yes, so that’s our most recent iteration of the same thing. Doesn’t matter how you ask it, Americans say: yeah, sure, tax the rich.

Hill: Do you have a sense people are paying more attention now to the tax rates than they were a year ago?

Newport: I don’t think so. Every way we look at the data: what is the economic problem that bothered you most for your family; what’s the biggest economic problem facing the country; what’s the biggest problem in general facing the country -- nowhere do we see Americans at all  talk about taxes. So I don’t think that’s a premiere issue. What Americans are concerned about economically now is jobs and having some kind of income that they can pay taxes on.

Hill: Frank Newport is editor-in-chief at Gallup. Thanks.

Newport: Good to be with you.

About the author

Frank Newport, Ph.D., is the editor-in-chief at Gallup and appears regularly on Marketplace.
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All incomes should be tax at the same tax rate. Why differentiate different source of income. Make it simple, income is income. It should not matter the source of income.

As for Charitable Contribution, I would not eliminate because it encourage contribution to the charitable organizations that provide services to the less fortunate.

"Consistently, 60 to 70 percent of Americans -- right in that range -- say that the upper income Americans or wealthier Americans, however you want to define it, need to pay more in taxes."

Do American's even know how much the wealthy even pay? Of course not. They're ignorant thanks to the MSM.

Top 5% of earners pay 58.7% of all income taxes, although their share of AGI is only 31.7%.

And then we get into the the capital gains argument.

Capital gains are taxed at a lower rate than regular income because a) investors are putting their money at risk (unlike wage earners) b) capital gains taxes are a SECOND TAX (the investor has already paid business taxes as an business owner) and c) tax rates on capital investment need to be lower or capital will go elsewhere.

The idea that the wealthy don't pay enough in taxes is a fairy tale, unless you want a confiscatory tax structure the punishes success.

Not quite right Tom. Private equity earns money investing others' money but pays capital gains tax rates on what they earn instead of paying regular income tex rates. Simple discrimination against the regular wage-earner.

I believe that it is a privlidge to pay taxes and that taxes are the price of civlization. That said I would re-write the tax code to benefit wage earners.

First: Wages and earned income would be taxed at the lowest %. I think that 15% is fair. Unearned income, carried intrest income, capital gains, etc would be taxed at 22%.

Second: I would eliminate all corporate tax breaks. All, I mean all depreciation, capital improvements, cost of wages etc. All of it. Let the market pick the winners.

Third: I would eliminate all charitable donation deductions

Fourth: I would expand family tax deductions to credits. Children are an economic benigfit to society and the cost of raising and caring for children should be a tax deduction. I would expand it to include all additional educational, cultural and athletic enrichment costs.

Fifith: I would impose a tax penalty on any corporation that exports an existing American job. Four years of State and Federal unemployment insurance, one year severence, 100% pension liability funding, and a 15% municipal surcharge on the previous year's gross profits of services and infrastructure costs.

Sixth: A taxpayer funded healthcare option that allows anyone to opt out of for private insurance.

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