The percentage of Americans who think their income tax is fair has fallen to 55%, the lowest level since 2001 according to a recent Gallup Poll on Income Tax Fairness.

Gallup’s history of asking this question stretches back to the 1940s. From 1943 through 1945, during World War II, few Americans complained about their taxes, with an average of 87% of Americans saying their taxes were fair. That dropped down to an average of 61% in 1946, the first year after the war.

Gallup resurrected the question in the late 1990s, when an average 48% said their income taxes were fair, including the historical low of 45% in 1999. Americans’ views of their taxes as fair improved from 51% in 2001 to 58% in 2002, shortly after the Bush administration put into place a round of tax cuts.

46.4% Pay No Income Tax

According to the Tax Policy Institute 46.4% paid no income tax in 2011.

The Gallup question specifically stated “Do you regard the income tax you will have to pay this year is fair?” It did not ask if the system was fair.

If those who pay no income tax think their zero share is fair (and logically they should), then a mere 16% of those who do pay taxes think their share is fair.

Here is my math: 55% think their share is fair. Subtract the 46.4% who pay nothing (and logically should be happy about that),  the net is 8.6 percentage points. (8.6 / 53.6) * 100 = 16%

I wonder if some people who pay no income taxes misunderstood the question and said taxes were unfair because they want those who do pay taxes to pay more. Perhaps some of those who pay nothing, want more money back.

Bear in mind that most of those who pay no income tax still pay property taxes, sales taxes, and payroll taxes (Social Security and Medicare). So, perhaps some of those who said their zero share was “unfair” do not realize they pay no income tax.

For more on who pays and who doesn’t, How Stuff Works answers the question Is it true that only 53 percent of Americans pay income tax?

Here is the answer in a nutshell: The top 20 percent of Americans earn 53.4 percent of the total U.S. income, but pay 67.2 percent of total income tax.

Is that fair? Are your taxes fair?

Mike “Mish” Shedlock