What sort of top income tax rate does the public favor?
By Scott Sumner
I have no idea how to answer this question, partly because I don’t believe in public opinion polls. But for those who do, here are the results of asking the public what tax rate the rich should pay:
21 percent of respondents recommend a rate below 20 percent;
17 percent recommend a rate of 20 percent;
23 percent recommend a 25 percent rate;
14 percent recommend a 30 percent rate;
13 percent recommend a 35 percent rate;
4 percent recommend a 40 percent rate;
no one recommends a 45 percent rate.
It’s unclear to me whether this refers to just federal income taxes (which currently has a top rate of roughly 41%), or all income taxes (where the top rate ranges from roughly 41% to roughly 54%), or whether the share of corporate income taxes absorbed by the rich should also be included.
I’d add that these rates may be maximum average rates (as few voters understand the term ‘marginal’), and thus do not necessarily imply that voters believe the rich are currently paying too much. Nonetheless, these results suggest that something like a 28% marginal tax rate on income over $200,000, with no loopholes, might be acceptable to most voters. In that sort of tax system the average income tax rate paid by the rich would be slightly below 28%. But again, that’s just if you trust polls. I don’t.
BTW, the same poll found that low-income people are the most likely to support low tax rates for the rich.
The Hill Poll, conducted by Pulse Opinion Research of 1,000 likely voters, also found broad support for lower rates across income groups. The group most supportive of lowering tax rates on the wealthy below current rates made between $20,000 and $40,000 a year; 81 percent supported tax rates of 30 percent or lower.
Either lower middle class people tend to be supply-siders or they expect to win the lottery. Or perhaps they are simply young people who hope to make much more money in the future.
HT: Brandon Berg