A startling majority of Americans think income from investments should be taxed at least as much as wages, a new survey reveals. The respondents also said the tax code was too complex but didn’t favor a flat tax.
Desire for tax fairness more important than measures to improve economy
The study of 1086 American by WalletHub, a web site media property designed to assist individuals with financial planning, showed that 61 percent of Americans view tax fairness as more important than measures to improve the economy.
While the economy is typically a method to improve individual income, the survey showed that respondents didn’t support a flat tax, with just 24 percent of respondents backing the tax concept that collects the same percentage from the ultra-rich as middle America.
Equal tax on investment income and wages debated
As a proposal to tax financial transactions languishes in Washington DC and taxes on investment income are significantly lower than a tax on ordinary wages, the survey showed that a whopping 90 percent of respondents think income off investments should be taxed at least as much as wages. Typically the top 1% of the most wealth significantly benefit from investment income to a large percent, much higher than middle class Americans, who primarily depend on wages for their income. Of these respondents 57 percent said investment income should be taxed the same as wages, while 33 percent said investment income should be taxed more than wage income.
“I’m glad to see that,” said Dorothy Brown of Emory University, speaking to higher taxes on investment income.”Given that only 1 in 4 Americans own stock in a way that is eligible for the preferential rate, it should be repealed. Most Americans will never receive this tax benefit. This raises the question, if most people think the current law should be changed, why isn’t the law changed?”
“The problem with taxing investment income is that capital tends to be much more mobile than labor. This means that high taxes on investment returns could lead to reductions in investment which is not good for anyone,” commented Alexis Anagnostopoulos of Stony Brook University.
Not supporting flat tax
While Americans support tax fairness, only 24 percent say the best method to achieve income equality comes from a flat tax. This said, Americans view taxes on wages and gasoline as the least fair, while sin taxes on alcohol and tobacco were considered the most fair. In light of global warming, apparently survey respondents didn’t consider a gas consumption a sin to be curtailed.
As corporations continue to flee the US to find lower taxes in foreign governments, survey respondents nonetheless largely want higher US corporate taxes. 65 percent of respondents think corporations should pay higher taxes.