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5 things to know about Tax Day: refunds are up, audits down

5 things to know about Tax Day: refunds are up, audits down

Raising the rates on the wealthy seems like a simple and politically palatable solution to tax reform. The average refund is $2,851, an increase of $53 over previous year.

"Our analysis found that the plan would significantly reduce the cost of capital and reduce the marginal tax rate on labor", the report states.

That means Americans may be sending a garbled message when they voice their opinions on taxes. The attack on the Affordable Care Act is just the start of tax clawbacks.

Americans also appear to have strong views on how people earn their money.

In a nutshell, it's the general consensus among US citizens and politicians of all age groups, income levels, and political affiliations, that the wealthy should pay more into the system than the poor.

Across the board, regardless of party, Americans agreed - 75 percent said they did, including 77 percent of Democrats, 71 percent of Republicans, and 84 percent of independents.

The results indicate that when it comes to actually working out the numbers in their heads, Americans don't think the tax scale is as graduated as it is. The rich tend to earn their income in a different way from most other Americans. Besides paychecks, many make money from capital gains - income they get from selling investments like stocks.

Since 2015, we have urged modernization of our antiquated tax system by replacing it with a combination of VAT and carbon taxes. The cycle goes as follows: the GOP controls the executive brach and passes massive tax cuts for the wealthy which tank the economy, the Democrats come in and more or less prop the economy back up without instituting meaningful reforms, the GOP win the executive again and pass massive tax cuts for the wealthy which tank the economy, the Democrats come in, etc, etc. The penalty is a percentage of what you owe. There are several deductions and tax credits that are specifically created to reduce taxes on lower- and middle-income Americans, and specifically exclude the wealthy. The estimates vary, but the Tax Policy Center calculates that 44 percent of Americans pay no federal income tax.

For example, this question dovetails with questions about what people think the lowest-income Americans' tax rate should be. It even led some observers that Trump might have leaked the return himself, since many people had assumed that Trump hadn't paid any federal taxes at all for years. Chatzky says that cash is the always the best way to pay for your taxes. Why? But for most, its not that bad. But she also discovered that American beliefs about and understanding of taxes are much more complex and even nuanced in some areas than many would expect. That might mean they would advocate expanding the EITC or other tax breaks.

Significant portions of the population do not pay federal income taxes, and this fact is often mangled into the assertion that these people - usually poor people - don't pay any taxes. In reality, it's just under half.

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Vanessa Williamson is a fellow in governance studies at the Brookings Institution and author of the new book Read My Lips: Why Americans Are Proud to Pay Taxes. "That is about $2,731,820,000 more than the $544,491,000,000 in Social Security and other payroll taxes (in constant 2017 dollars) that the government collected in the first six months of fiscal 2016".

The Trump/GOP assault on the estate tax, for instance, is a giveaway to America's aristocracy.

In other words, the wealthy in our country nearly always get the policies they want.

In practice, our tax system achieves its goal of being progressive.

But in our poll, almost half of Democrats - 45 percent - agreed with the proposition that "federal income taxes should be cut for all income levels". Any tax reform proposal must not cut taxes for big corporations or the wealthy. Tax reform should use these one-time-only tax revenues to increase smart public investment in infrastructure rather than cut corporate tax rates permanently.

These are only two examples, but they suggest that partisan messaging in Washington on some specific issues doesn't necessarily filter down to Americans. There are a few more areas where Americans tend to agree across party lines: almost 9 in 10 believe the tax code is too complicated, three-quarters say it's not OK for people to underreport income on their taxes, and 77 percent say their own personal federal income taxes are too high.

Today is tax deadline day. We may need to file for an extension.

The poll was conducted online on April 11-12, with a sample of 1,010 adults age 18 or older.

In every other scenario analyzed by the OECD in its 584-page "Taxing Wages" report, the US tax burden also was below average, from 3 points to nearly 6 points depending on the taxpayers' wages, marital status, and number of children.


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