Recs

0

America: This Part of the Tax Code Needs to Be Fixed

Tax policy -- who pays what and how -- is a hot-button issue. Politicians from both parties cry out for reform, yet there is little consensus about what needs to be done. And while politicians and pundits argue, everyday Americans are struggling to navigate an increasingly complex tax code.

With tax season behind us and the 2014 midterm elections ahead of us, we thought now would be a good time to find out what exactly Americans think of our current tax system and how it could be improved.

To investigate attitudes toward taxation, WalletHub.com conducted an original online survey of 1,086 Americans. The sample was designed to be nationally representative of all Americans by age, race, and gender.

Key findings:

  • More than 80% of respondents rated the current tax code as either "complex" or "extremely complex."
    • A full 44.2% believe the fairest possible tax code would have fewer deductions than today.
  • An overwhelming 90% of respondents believe income from investments should be taxed at least as much as wages:
    • Well more than half (57.64%) think wages and investment income should be taxed equally; 33.06% say investment income should be taxed more than wages.
  • Less than one-quarter (24.31%) of respondents support a flat income tax.
  • Almost two-thirds of respondents (65.10%) believe corporations should face higher tax rates than consumers.
  • Americans view taxes on wages and gasoline as least fair; taxes on alcohol and tobacco seen are as most fair.
  • Americans view tax fairness (61.23%) and tax equality (20.81%) as more important than whatever is best for the economy (17.96%).

Investment and wage income
How to tax income from investments relative to wages has been a major area of disagreement among politicians. Current policy taxes income from investments at a lower rate than income from wages, which means someone like Warren Buffett pays a lower effective tax rate than his secretary.

We asked respondents what they thought is the fairest possible relationship between tax rates on investment income and wages -- should tax rates be higher on wages or on investment income, or should the tax rates be the same?

Source: WalletHub

  • Over 90% of respondents believe income from investments should be taxed at least as much as income from wages.
  • Notably, we did not see any significant differences by income, age, or education. Across groups there appears to be strong support for higher taxes on investment income, relative to current policy.

Take advantage of this little-known tax "loophole"
Recent tax increases have affected nearly every American taxpayer. But with the right planning, you can take steps to take control of your taxes and potentially even lower your tax bill. In our brand-new special report "The IRS Is Daring You to Make This Investment Now!," you'll learn about the simple strategy to take advantage of a little-known IRS rule. Don't miss out on advice that could help you cut taxes for decades to come. Click here to learn more.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2984095, ~/Articles/ArticleHandler.aspx, 8/23/2014 2:12:58 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

WalletHub
wallethub

WalletHub is a leading personal finance social network that helps consumers save money on their credit cards, car insurance, bank accounts, mortgages, and many more financial products.

Today's Market

updated 16 hours ago Sponsored by:
DOW 17,001.22 -38.27 -0.22%
S&P 500 1,988.40 -3.97 -0.20%
NASD 4,538.55 6.45 0.14%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes


Advertisement