Loading...

Americans find tax code too difficult to understand

Even as they were asked basic questions about the tax code, many showed misunderstanding of how the tax system in the United States functions.

article image

Most respondents did not know that the top 1% of taxpayers account for roughly 42% of federal income taxes, while roughly one-third knew that the top federal income tax bracket is 33%. File Image.

The vast majority of American taxpayers believe that the tax system is too complex and in need of reform, according to a new survey from the Tax Foundation and Public Policy Polling.

 

The survey, which came one week before Tax Day, found that some 65% of respondents think the federal tax code is “overly complex,” while 86% said the tax code is “in need of reform.” The Tax Foundation said the results “showed a general dissatisfaction with the current tax code.”

 

 

Even as they were asked basic practical questions about the tax code, many demonstrated misunderstanding of how the tax system in the United States functions. When asked whether they would rather receive a $1,000 tax credit or a $1,000 tax deduction, some 64% either answered incorrectly or “were unsure which provided more value.”

 

“This survey reveals how, despite taxes playing a significant role in personal finances and being levied on a sizable portion of the population, most Americans are not just unhappy with the current tax code but also do not understand it,” the Tax Foundation observed. “Education is the first step in achieving more accurate and productive conversations about taxes, more informed financial decision-making, and even better tax policies.”

 

 

Most respondents did not know that the top 1% of taxpayers account for roughly 42% of federal income taxes, while roughly one-third knew that the top federal income tax bracket is 33%.

 

As of three years ago, federal receipts accounted for 64% of all taxes collected, while state receipts and local receipts accounted for 21% and 15% respectively. Some 65% of respondents to the Tax Foundation survey said their federal income tax payments are too high.

 

article image