Millionaires are often painted as the villains of the tax debate, accused of doing everything they can to avoid paying their fair share. But what if many high earners actually believe they should be paying more? That would put an uncomfortable spotlight on the policymakers who decide what they owe.
The villain narrative is a tidy story, and politicians on both sides have gotten plenty of mileage out of it. One camp promises to make the rich finally pay up. The other warns that they’re already being squeezed dry. What almost nobody does is ask the people in question what they think they owe.
MarketBeat.com, a financial media company, surveyed 3,031 respondents earning at least $250,000 a year and posed a simple question to them:
“Should your own income tax bill be higher, lower, or stay the same?”
The answer will come as a surprise to anyone who assumes the top brackets are united in wanting to hand over less. The study found that 38% of New York high earners said they believe they should be paying more. That’s a sizable group of people volunteering, at least in theory, to write a bigger check to the government.
Where the Willing Wallets Are
The appetite for a bigger tax bill depends heavily on the state and ZIP code. Alaska leads the country by a distance, with two-thirds of its high earners saying they should be paying more. The five states with the highest share were:
1. Alaska (67%)
2. Wyoming (57%)
3. Hawaii (56%)
4. Maryland (49%)
5. Mississippi (47%)
It may be no coincidence that the top two, Alaska and Wyoming, don’t levy a state income tax at all. Generosity comes a little easier when one of the usual bills never arrives.
At the city level, the 5 cities with the highest earners who feel undertaxed were:
1. Riverview, Florida
2. Sandy Springs, Georgia
3. Houston, Texas
4. Chicago, Illinois
5. Plano, Texas
At the New York city level, the 7 cities with the highest earners who feel undertaxed were:
1. New Rochelle
2. New York
3. Brooklyn
4. The Bronx
5. Queens
6. Buffalo
7. Staten Island
Infographic showing study results
Show Me the Receipts
That openness comes with strings attached, however. When asked which single change would make them most willing to pay more, respondents said:
- Clear evidence that the money would be spent effectively (28%)
- Requiring people who earn substantially more than them to pay more, too (23%)
- Having the extra money fund services in their local community (18%)
- Having the extra money fund a cause or service they care about (14%)
- Closing loopholes so people with similar incomes contribute similarly (10%)
As for where the extra dollars should go, healthcare came out on top at 20%, followed by schools and education (17%), affordable housing and homelessness services (15%), and support for older people and people with disabilities (13%).
Further down the list were roads, public transit and infrastructure (10%), police, fire and emergency services (9%), environmental protection (7%) and national defense and veterans’ services (5%).
Dead last, at 4%, was reducing government debt. Nobody, apparently, dreams of their hard-earned money going toward interest payments.
Trust Issues
If there’s one thing standing between high earners and a bigger tax bill, it’s Washington. More than half (53%) named the federal government as the level they trust least to spend additional revenue effectively. State governments were the pick for 28%, and local governments for just 19%. The closer the money stays to home, the easier people find it to let go.
They aren’t convinced lawmakers understand them, either. Asked how well elected policymakers grasp what people in their income bracket consider a fair contribution, the answers were:
- Very well: 18%
- Somewhat well: 29%
- Not very well: 29%
- Not at all: 24%
That adds up to 53% who think the people writing the tax code are largely guessing.
Guilt, Loopholes and the Question of Who Counts as Rich
The survey also turned up some candid admissions. One in four respondents (25%) said they have felt guilty about paying less income tax than they could reasonably afford. And 36% admitted to publicly supporting higher taxes on high earners while quietly taking steps to reduce their own bill.
Finally, respondents were asked at what annual income level a person has a moral responsibility to pay a higher percentage of taxes than a middle-income earner. More than half (53%) set the bar just under $500,000.
“We tend to talk about high earners as if they all think the same way about taxes, and these numbers show they don’t,” says Matt Paulson, founder of MarketBeat.com. “Nearly a third are telling us they would be willing to pay more. The sticking point is trust. They want to see where the money goes before they hand over another dollar.”