With Tax Day looming and 81% of people being more worried about inflation than taxes this year, WalletHub today released its 2023 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.
Tax Rates in New York (1=Lowest; 25=Avg.):
- 49th – Overall Effective State & Local Tax Rate
- 45th – Income Tax
- 44th – Real-Estate Tax
- 1st – Vehicle Property Tax
- 35th – Sales & Excise Taxes
2023 Taxpayer Survey
- 73% of people say the government does not spend their tax dollars wisely.
- Almost 34% of people say not having enough money is their biggest Tax Day fear, followed by making a math mistake (23%) and getting audited (22%).
- 39% of people would move to a different country for a tax-free future, while 37% would get an “IRS” tattoo and 23% would stop talking for 6 months.
- 49% of people would do jury duty rather than do their taxes, while 36% would talk to their kids about sex and 26% would miss a connecting flight.
- 72% of people think their current tax rate is too high.
Why do most people think their current tax rate is too high?
“Around 72% of Americans think that their current tax rate is too high, according to a recent WalletHub survey. One major reason for this could be that during this time of high inflation, people’s wallets are already stretched thin, so taxes hit even harder than usual. In fact, 81% of people are more worried about inflation than taxes in general. Perhaps people feel that a tax break is necessary to lessen the pressures of inflation,” said Jill Gonzalez, WalletHub analyst. “Another reason why people think their current tax rate is too high could be that they feel the benefits they receive from the government do not equal the money subtracted from their income. They may also disagree with how their tax dollars are being used or think they are being used inefficiently.”
Why do so many Americans feel the government does not spend their taxes wisely?
“There are many reasons why around 73% of Americans believe the government does not spend their tax dollars wisely, according to WalletHub’s latest survey, but some of the biggest factors are a disconnect between the amount of taxes we pay and the benefits we receive, a general lack of trust in politicians, and the truthful perception that the private sector is more efficient at investing than the government,” said Jill Gonzalez, WalletHub analyst. “When Americans hear about billions of dollars in waste, fraud and abuse, they are even more reluctant to part with their hard-earned money. When that’s the message that’s always in the news, it’s easy for people conclude that that the government isn’t spending their tax money wisely.”
What should taxpayers be worried about on Tax Day?
“The biggest things that Americans fear on Tax Day are not having enough money and making a math mistake. In third place is a fear of getting audited,” said Jill Gonzalez, WalletHub analyst. “What people should be most concerned about is having enough money to pay what they owe, as trying to come up with additional funds on short notice is difficult for many people during this time of high inflation. Taxpayers can avoid making math errors by completing their tax return early reviewing it thoroughly for mistakes before submitting it. They can also take advantage of free tax-prep resources that can help make sure that the math checks out.”