6 percent of Americans in households earning over $250,000 a year think their taxes are “too low.” Of that same group, 26 percent said their taxes were “about right,” and a whopping 67 percent said their taxes were “too high.”
OK, fine. Most people don’t like taxes. No surprise there. But get this next part:
And yet when this same group of high earners was asked whether “upper-income people” paid their fair share in taxes, 30 percent said “upper-income people” paid too little, 30 percent said it was a “fair share,” and 38 percent said it was too much.
30 percent of these upper-income people say that upper-income people pay too little, but only 6 percent say that they personally pay too little. 38% say that upper-income people pay too much, but 67% say they personally pay too much.
Rampell attributes this to people’s ignorance about population statistics–these 250K+ families just don’t realize that they’re “upper income.” Another possible explanation is that most upper-income people feel that other upper-income people should pay more–perhaps these surveys have an idea that they don’t cheat on their taxes but lots of others in their income bracket too.
I think Rampell’s explanation is correct, though. There’s lots of evidence that people don’t have a good feeling for population statistics–one of my favorite examples is a Washington Post survey from 1995 that found that “Most whites, blacks, Hispanics and Asian Americans said the black population, which is about 12 percent, was twice that size.” They similarly way overestimated the percentage of Hispanics and Asians in the country. Whites overestimated the proportion of minorities, and minorities overestimated the proportion of minorities too. Given that people haven’t even learned these simple percentages, it’s not shocking that they can’t come to grips with something more complicated such as an income distribution.
As a statistician, I’m upset when people are so clueless about numbers that affect them personally, but as a social scientist, I recognize that this is just the way things are. Most people aren’t quantitatively minded.
P.S. Some of Rampell’s commenters said that they made about $250,000 but didn’t feel that they were rich because they lived in expensive places like New York City. So, just to calibrate . . . the median household income in Manhattan in 2009 was $68000. It may very well be true that Rampell’s commenters aren’t rich–but they are definitely “upper income,” which is what the survey asked.
The headline to Rampell’s article used the word “rich” which I’ve changed to “upper-income” to be more consistent with the survey question. Also, the word “rich” seemed to freak out many of her commenters who started going off on rants without seeming to grasp her key point.
To put it another way, if you and your spouse make $125,000 each and you don’t feel rich, than that’s fine. Rampell isn’t saying you’re a bad person. She’s just saying going with the statistics and pointing out that you’re “upper income.” Her headline was a distraction.
P.P.S. This discussion also relates in some convoluted way to my point #6 here.