With Tax Day looming and 74 percent of people disapproving of how the government has used tax dollars during the COVID-19 pandemic, WalletHub today released its 2021 Taxpayer Survey, as well as its yearly report on the States with the Highest & Lowest Tax Rates in order to help people better understand this confusing time of year. You can find highlights from both below, followed by the full list of WalletHub’s 2021 taxpayer resources.
Tax Rates in New York (1=Lowest; 25=Avg.):
- 49th – Overall Effective State & Local Tax Rate
- 45th – Income Tax
- 43rd – Real-Estate Tax
- 1st – Vehicle Property Tax
- 35th – Sales & Excise Taxes
2021 Taxpayer Survey
- 74% of people say the government has not handled their tax dollars wisely during the COVID-19 pandemic.
- 30% of people say making a math mistake is their biggest Tax Day fear, edging out not having enough money (29%) and identity theft (21%) at the top of the list.
- 38% of people would move to a different country for a tax-free future. 27% would get an “IRS” tattoo and 19% would stop talking for 6 months.
- 32% of people think charities would make the best use of their tax dollars, outnumbering by nearly 2.5 times people who trust the federal government the most with their taxes.
- 222 million Americans think the government does not spend taxes wisely.
Why do so many Americans feel the government does not spend their taxes wisely?
“There are plenty of reasons why around 222 million Americans believe the government does not spend their tax dollars wisely, according to a new WalletHub survey, but some of the biggest factors are a general distrust of politicians, the truthful perception that the private sector invests more efficiently than the government, and a mismatch between the amount we pay and the benefits we get in return,” said Jill Gonzalez, WalletHub analyst. “It hurts to part with our hard-earned money, and that’s especially true when every time an election rolls around we hear about billions of dollars in waste, fraud and abuse. When that’s the message we hear over and over, it’s easy to believe that the government isn’t handling our taxes wisely.”
Where would people prefer to divert their tax dollars?
“The largest share of people, at around 32%, would rather their tax dollars go to charities than any level of government. When it comes to paying taxes to the government, people have more faith in local levels,” said Jill Gonzalez, WalletHub analyst. “Americans would rather pay taxes to their local government than their state, and to their state rather than the federal government, which reflects people’s distrust of the federal government and special interests.”
What should taxpayers be worried about on Tax Day?
“The biggest things that Americans fear on Tax Day are making a math mistake and not having enough money, each of which gets close to 30% of the vote,” said Jill Gonzalez, WalletHub analyst. “What people should be most concerned about is having enough money to pay what they owe, as trying to find more money on short notice could be difficult for many people during the COVID-19 pandemic. Avoiding math errors is easier if you start completing your tax return early and take time to check it for errors. There are plenty of free tax-prep resources that can help make sure the math checks out, too.”
What should people do if they can’t pay their taxes?
“If you can’t afford to pay your tax bill, the first thing you should do is still file a return, because that can help you avoid penalties while you figure out how you’re going to pay. If your money issues are temporary, you may want to consider just waiting for a bill or asking for a 120-day extension,” said Jill Gonzalez, WalletHub analyst. “People who need a longer amount of time to pay have several other options, such as setting up an installment agreement with the IRS, paying with a credit card or getting a personal loan.”