Not surprisingly, many think they are simply over-taxedA new survey from GoBanking Rates, a consumer focused site focused on saving & investing, taps into the mood of America on one of its biggest concerns: money.
LOS ANGELES, Feb. 12, 2020 /PRNewswire/ — A majority of Americans not only disapprove of how the government spends their tax dollars, 51% also believe they are overtaxed. This is according to a new GOBankingRates survey aimed at getting to the bottom of how Americans view taxation as well as how they want their tax dollars to be spent.
Whether it’s balancing your checkbook at home or the government’s allocation of tax dollars for programs and services, budgeting comes down to priorities. Basically, Americans believe their taxes could be more effectively spent.
Here are some of the key findings from the survey:
- Only 18% of Americans believe their tax dollars are being spent effectively.
- 7% of men and 45% of women believe they are overtaxed.
- Men and women also agree that social insurance (e.g., Social Security and Medicare) as well as education should be the top government spending priorities.
Despite the aggressive push for climate change action, less than 30% of Americans think the environment is a top priority for their tax dollars. Democrats ranked education as well as social insurance ahead of the environment while only 12% of Republicans believe the environment should be considered a top spending priority.
Meanwhile, Republicans believe social insurance, defense and international security, and infrastructure should be the top government spending priorities when it comes to their tax dollars.
Republicans and Democrats are also sharply divided on public assistance programs (e.g., SNAP and Medicaid) with more than half of Republicans saying too much is spent on them while 65% of Democrats believe not enough is spent. The U.S. government spent nearly $500 billion on these programs in 2018.
GOBankingRates’ findings show a majority of Americans are not pleased with how much they’re being taxed, and a recent Tax Foundation report1 shows Americans spend more money on taxes than food, housing and clothing combined.
“It may not be all that surprising to hear most Americans don’t approve of how their tax dollars are spent,” said Cameron Huddleston, award-winning personal finance writer for GOBankingRates. “However, it’s important to note that the survey highlights that a significant percentage of taxpayers — 27% — don’t even know where their tax dollars are going. This lack of knowledge about how their money is being used might be contributing to a sense that it’s being used ineffectively.”
Excerpts From The Survey
More Than Half Want Taxes Spent on Social Insurance
When asked if they could choose how their tax dollars were spent, 53% of respondents said spending on social insurance such as Social Security and Medicare would be of top importance. This was the most popular choice, followed by education and infrastructure. Respondents were least likely to say that the national debt should be a top priority.
“People are more likely to want their tax dollars to go to Social Security and Medicare because it’s money coming back to them,” said Tom Wheelwright, a certified public accountant and author of “Tax-Free Wealth.” Workers pay into these programs through payroll taxes on their wages. In fact, payroll taxes account for 35% of the revenue collected by the federal government, according to the Tax Policy Center.
Not surprisingly, the survey found that older adults were much more likely than younger adults to say that social insurance would be of top importance if they could choose how their tax dollars are spent. That’s likely because adults 65 and older benefit from programs such as Social Security and Medicare. Young adults ages 18 to 24, on the other hand, said overwhelmingly — 71% — that education would be a priority if they could choose how their tax dollars were spent.
One-Third Don’t Want Tax Dollars Paying for War
When asked what they weren’t OK with their tax dollars paying for, respondents’ top response was war — with one-third choosing this option. War also was the top thing that respondents in all age groups and men and women said they didn’t want their tax dollars paying for.
However, war was not the top response among Republicans. GOP respondents were most likely to say they didn’t want their tax dollars going to public assistance programs. “Public assistance programs may have a negative connotation among the respondents because they may not have benefited from these programs recently or at all,” Mazur said.
Nearly 40% Think the U.S. Doesn’t Spend Enough on Public Assistance Programs
The survey found that, overall, Americans are split over whether the government spends the right amount of their tax dollars on public assistance programs. However, the divide is much more prominent between Democrat and Republican respondents.
The government spent 11.8% of the federal budget on public assistance programs in 2018. About 27% of all respondents said this was the right amount. Nearly 35% said this was too much. And about 39% of respondents said the government didn’t spend enough on public assistance programs.
“What this suggests is that there is only about 20% of people in the middle,” Leguizamon said. “As we see in politics, there seems to be a reduction in what we call the ‘median voter.’ A greater amount of people are identifying with one of the two major parties, which then translates into preferences for public assistance. Democrats tend to favor these programs, while Republicans think they are very inefficient.”
Read the full report here.
GOBankingRates surveyed more than 1,000 people from across the U.S. who planned to file a tax return this year.
GOBankingRates.com is a money lifestyle website dedicated to helping visitors Live Richer™. From tips on saving money to investing for retirement or finding a good interest rate, GOBankingRates helps turn financial goals into milestones and money dreams into realities. Its content is regularly featured on top-tier media outlets, including MSN, Yahoo! Finance, AOL, Fox Business, CNBC, USA Today and dozens of others.
1 “Tax Freedom Day Is April 16th,” Tax Foundation, April 10, 2019