Less Than Half in U.S. Now Say Their Taxes Are Too High

Less Than Half in U.S. Now Say Their Taxes Are Too High

The FINANCIAL -- Americans are less likely today, than at any time since 2012, to say the federal income taxes they pay are too high. Currently, 45% hold this view, while 48% say their taxes are about right.

The 45% saying today that their taxes are too high is down from 51% last April, shortly after President Donald Trump took office and an average 52% since 2013. It essentially ties 1961, 2009 and 2012 as the lowest in Gallup's trend, all years when 46% of Americans said their taxes are too high. Gallup measured a lower percentage, 43%, in 1949, although that result is based on a sample of those who paid taxes rather than a sample of all U.S. adults.

Americans have been far less concerned about their income taxes since the implementation of George W. Bush's 2001 tax cuts than they were before then. Since 2001, an average of 50% of Americans has said their taxes are too high, compared with an average 59% over the five decades prior to that, from 1956 to 2001, according to Gallup.

Republicans' Concern About Taxes Nosedives Under Trump

The latest decline in Americans' belief that their taxes are too high mostly results from fewer Republicans holding this view. Currently, 45% of Republicans say their taxes are too high, down from 62% a year ago and 72% in 2016 during the presidential primary campaign. Meanwhile, there has been no meaningful change in the percentages of independents and Democrats saying their taxes are too high, at 49% and 39%, respectively, today.

The slight majority of Republicans (52%) and Democrats (52%) now say their taxes are about right. Political independents, at 44%, are less likely to say this.

More Still Disapprove Than Approve of New Tax Law

In recent years, Gallup has measured Americans' perceptions of their taxes each April as part of its Economy and Personal Finance survey. This year's survey took place April 2-11, roughly a month after new income tax schedules associated with Republican tax cuts passed in December went into effect. The new tax law included tax reductions for most middle and upper-income Americans, as well as a steep reduction in the corporate income tax rate.

The poll finds no change in Americans' reaction to the law since the last update in February, with 39% saying they approve of it, and little improved over Gallup's initial post-passage reading in January, when 33% approved. The majority, 52%, disapprove of the law.

Naturally, support for the law differs by party as 78% of Republicans versus 36% of independents and 15% of Democrats approve of it. Republicans broad support conforms to their lower belief that their own taxes are too high.

At the same time, Americans, regardless of party, are largely uncertain what effect the new tax law has had on their own taxes. More say they have noticed their income taxes have gone down since the law went into effect than say their taxes have gone up: 18% vs. 9% respectively. However, another 17% say their taxes have stayed the same and 56% are not sure what the effect has been. Although many U.S. workers may be seeing fatter paychecks since the IRS released the new tax withholding tables, Americans may be suspending judgment of the impact of the law until they file their 2018 tax returns next year.

Notably, Republicans are not much more informed than Democrats about the effect of the tax law on their own taxes, with 44% of Republicans saying they aren't sure compared with 57% of Democrats.

Bottom Line

Republicans have been increasingly more positive about their federal income taxes since Trump took office last year. This positivity has been enough to drop Americans' concern that their own taxes are too high below the majority level for the first time since 2012. Meanwhile, independents' and Democrats' views have not changed much. Still, all party groups are far less dissatisfied with their taxes than they were prior to Bush's major tax cuts in 2001, which may partly explain why the public wasn't clamoring for new tax reductions under Trump.

Republicans' recent change of heart on taxes is most likely a reflection of their more positive outlook about taxes as a Republican president settles into his job after eight years under a Democratic administration.

With a majority of all Americans viewing the new tax law unfavorably, the lack of their awareness about whether their own taxes have decreased under the new law may be a good thing for the president. It means there is still an opportunity for Trump and his party to benefit should taxpayers ultimately determine their tax bill has gone down.