Tax Me, Tax Me!

You want to hear some deeply wise and thoroughly counterintuitive wisdom from the crowd? How about this: Americans are perfectly happy with how much they are taxed.

That sounds downright un-American. We're supposed to be in a constant state of tax wrath. On tax day this year, activists around the country tried to stage "tea parties" to protest our onerous burden. Promising to cut taxes is supposed to be a surefire way to get votes in the post-Reagan era.

Well, the nice people at the Gallup Poll just discovered that 51 percent of those polled felt their tax bill was "about right" (48 percent) or "too little" (3 percent). "Since 1956, there has been only one other time when a higher percentage of Americans said their taxes were about right," the report said, "in 2003, when 50 percent did so after two rounds of tax cuts under the Bush administration." Indeed, "Gallup finds Americans' views of their federal income taxes about as positive as at any point in the last 60 years."

This is not exactly a finding you would expect in the middle of a whopper recession. These are times of angst, worry and dissatisfaction. This is also a time of enormous disparity in wealth and income; the rich have gotten much, much richer over the past decade, and the rest, well, haven't.

So what's going on here?

First off, the federal tax burden is actually low by historical standards. The effective tax rate (that is, the rate people really pay after deductions, credits and exemptions) was 9.1 percent in 2006, the last year for which the Congressional Budget Office had numbers. This is down from a peak of 12 percent in 1981. The effective federal rate for the middle fifth of all taxpayers is 3 percent. Taxpayers seem to think this is a reasonable levy.

Second, contrary to received political wisdom, the tax system is viewed as pretty fair overall. In 2009, 61 percent thought the tax they pay is fair. That's way up from the years before 2003 and the Bush tax cuts. Republican politicians tend to think taxpayers always resent their tax bills. They don't. Democratic politicians tend to think taxpayers always resent the fact the rich don't pay much more in taxes. They don't.

Third, the Gallup Poll seems to indicate that Americans believe the Obama administration really won't raise taxes on people earning less than $250,000 a year. It may also suggest that citizens believe that government spending can actually help the broader economy.

Finally, and most important, I suspect this anomalous support of the federal income tax indicates that the popularity of President Obama is contagious, and that the whole of government — including the reviled income tax — has greater legitimacy and support because of his popularity.

The popularity of a president is a fleeting thing. George W. Bush went from the ecstasy of historically high approval ratings after the Sept. 11, 2001, attacks to the agony of historically low numbers in 2008. But the confidence and trust in government in general, its institutions and core functions, is not so fickle. Those kinds of approval ratings change slowly, and they have rarely moved up for a sustained period over the past 35 years.

But the Gallup Poll found a big increase in the perceived fairness of taxation from 2008 to 2009, despite the fact that the economy tanked. That is significant. It hints at a deep improvement in public opinion toward government. And so it will be interesting to watch polling about government over the next years, not just polling about politicians.

Since Watergate, there have been three two-term presidents: Reagan, Clinton and Bush. All had periods of great popularity and all had great falls. None of their administrations recovered the public approval for government common before Vietnam and Watergate. The most important challenge to American statecraft is to resurrect that confidence, which is a precondition of great civic accomplishment.

I am not suggesting that Obama is doing what other presidents couldn't. The man has been in office for only a few months.

I am suggesting that the success and popularity of a president changes by the week, while the lack of success and popularity of American government has hindered this country for a generation. So the fact that people are OK with how they are being taxed, despite being in the midst of a ferocious recession, might be a tea leaf of some significance.

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