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Pew Report – Rich Greedy, Don’t Pay Enough Taxes

Pew Report – Rich Greedy, Don’t Pay Enough Taxes

Several months back, I came across a blogger who felt as though the entire American financial sector needed to collapse to some degree so that it could be redefined.

The reason for this, wrote the blogger, was because if nothing changed as the nation emerged from the recession, then nothing changed that would prevent it from happening again.

She was very quick to point out that she didn’t feel as though the wealthy should have to sacrifice what they likely have worked their entire lives for, but rather, rethink society’s approach to prosperity and fair chances. Maybe she felt like there needed to be less politics and more human nature – the good human nature that propels us forward to do good or at a minimum to stay out of the way of those who were trying to do good. It was an interesting column and it’s exactly what came to mind today when the Pew Research Center released a new report.

Rich and Poor

What’s really interesting is the number of Americans who believe the divide between the rich and poor – from a materialistic stance – is widening. Some say it’s widening at a record pace. They also believe the wealthy are paying too few taxes and instead, forcing middle class to shoulder the burdens of not only the wealthy, but the poverty ridden in our communities.

If a stubborn unemployment rate is causing concern in President Obama’s camp, then this report presents a real problem for the Republican who’s hoping to sway voters when they head to the polls in November. There are many who feel as though Romney supports the rich over the middle class and the poor. Another interesting finding had to do with the answers provided by self-described upper or upper middle class. They too say not enough taxes are being paid by those with the most money.

As one might expect, the wealthiest who participated in the role agreed their wealth had indeed increased over the past decade. Sixty two percent said they were more financially secure than they were ten years ago; that number is up from forty four percent in 2002. Only ten percent of those polled said the wealthy paid too much in taxes.

Tax System

Ask any economics professor, and odds are, you’ll learn that the American income tax system was designed to ensure higher earners are expected to pay a bigger share of their income than those who aren’t earning as much. Obama’s plan includes raising the 35% rate for the nation’s highest earners to 39.6%.

The pubs, on the other hand, are thinking lowering those rates to 25% and Romney believes it should be lowered to 28%. Meanwhile, the study reveals 63 percent of Americans say the GOP favors the rich over the middle class and poor while 71 percent say Romney’s election would be good for wealthy people. A smaller share, 20 percent, says the same about the Democratic Party. More Americans -a full 60 percent- believe Obama, if re-elected, will benefit the poor and half say he will help the middle class. Surprisingly, 27 percent say Obama’s plan will boost the wealthy.

The survey then moved to a more “human nature” aspect. The goal was to find out what the middle class and the country’s poor thought of those who were living financially sound lives. The poll found that many Americans believe rich people to be intelligent and hardworking; that said, they also believe they’re “greedy” and “less honest than the average American”. It comes as little surprise that the poll found the wealthiest pay their bills on time. They’re more likely to pay their credit card balances each month and they’re also more apt to pay their mortgages off at a faster rate than their middle class counterparts.

Financially Struggling Voters

The report comes out the same time the Republican National Convention kicked off in Tampa, Florida. Both candidates are wasting no time trying to woo the so-called “middle class”. The middle class, however, is struggling with what one woman said, “the worse of two evils” when it comes to choosing the next president. Both candidates are looking to appeal to a “broad swath of financially struggling voters who identify as middle class”.

Many of us are familiar with the fiscal cliff that’s striking fear in the hearts of Americans; for Romney’s part, he supports an extension of Bush-era tax cuts for everyone including the wealthiest 2 percent, and says his policies will benefit the middle class by boosting the economy and creating jobs. Associate Director of Pew Social and Demographic Trends, Kim Parker, said,

The fact that Romney may be viewed as wealthy doesn’t necessarily pose problems for his candidacy. The challenge for Romney lies more in the fact that large majorities say if he is elected president, his policies would likely benefit the wealthy.

There’s another twist associated with this report and its timing. For months, the data coming out of DC regarding the economy only now serves to solidify Pew’s findings. We are nearing a poverty level not seen since the early 1960s and the middle class continues to struggle in a beaten economy. Neither presidential candidate has the plan for turning the nation’s problems around. Meanwhile, the bad news is rolling out as though it were on a conveyor belt.

If you’re thinking it’s all very confusing with the only clarity being the realization that no one wins – not really – in the current atmosphere, you’re definitely in the majority.

The Pew survey involved telephone interviews with 2,508 adults conducted from July 16 to 26. It has a margin of error of 2.8 percentage points.

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