Because of the huge fraction of mouthbreathers who, without pause, respond to such questions with the brilliant, “I didn’t pay any taxes this year. I got some back!”
(That is, they think they had a net gain of money because they over-deducted from their paycheck that year, and the government returned the excess.)
Even considering that, the 3% figure still seems wildly implausible. This would require something like 90% of the population thinking they pay 0% taxes, and the remaining 10% thinking they pay 30% taxes (which is still an underestimate).
The PDF that Louie linked to doesn’t explain what the numbers mean. Surely there would be lots of articles about this epidemic of grossly underestimating taxes. Can anyone provide more evidence?
Consider the impact of interpreting “I got some back” answers as being negative entries in the summation (though I hope the survey would put up a big asterisk about this when reporting the results!).
People took the question as being about federal income taxes, and that value is (incorrecty) compared to all taxes at all levels: social security taxes, state sales taxes, etc.
I’m not sure about those, but it would have been close some years. If I’m not mistaken (source), SS and Medicare are something like 7.6%, and looking at a rather high-paying year out of the bunch I paid about negative 3.6% in taxes. I probably did better than that in years with less money.
Because of the huge fraction of mouthbreathers who, without pause, respond to such questions with the brilliant, “I didn’t pay any taxes this year. I got some back!”
(That is, they think they had a net gain of money because they over-deducted from their paycheck that year, and the government returned the excess.)
Even considering that, the 3% figure still seems wildly implausible. This would require something like 90% of the population thinking they pay 0% taxes, and the remaining 10% thinking they pay 30% taxes (which is still an underestimate).
The PDF that Louie linked to doesn’t explain what the numbers mean. Surely there would be lots of articles about this epidemic of grossly underestimating taxes. Can anyone provide more evidence?
True. A few other possible factors:
Consider the impact of interpreting “I got some back” answers as being negative entries in the summation (though I hope the survey would put up a big asterisk about this when reporting the results!).
People took the question as being about federal income taxes, and that value is (incorrecty) compared to all taxes at all levels: social security taxes, state sales taxes, etc.
But, but… companies actually employ these people? I hope they don’t let them man the cash register!
FWIW, when I wasn’t making much money, my income tax was 0, and tax credits (such as EIC) meant that I was returned more money than was deducted.
Even after accounting for SS and Medicare taxes? (IIRC, student workers don’t have to pay SS.)
I’m not sure about those, but it would have been close some years. If I’m not mistaken (source), SS and Medicare are something like 7.6%, and looking at a rather high-paying year out of the bunch I paid about negative 3.6% in taxes. I probably did better than that in years with less money.