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Taxpayers Say More Relief Is Needed; Corporations, Not Individuals, Should Be Top Tax Revenue Source, Finds CCH Survey
Taxpayers say proposed tax legislation does not go far enough; want more tax breaks; and express their opinions on where government income should come from and how to spend it in CCH CompleteTax nationwide survey
(RIVERWOODS, ILL., February 9, 2009) – Taxpayers believe more needs to be done to help them than the tax legislation currently being debated in Congress, according to the nationwide CCH CompleteTax survey of nearly 900 taxpayers.
The survey, commissioned by CCH and conducted by GfK Roper, also asked taxpayers about their opinions on where the government revenue should come from and what should be priorities for government spending. Survey findings reveal taxpayers’ views are not the same as actual government action.
“This tax season people are confronted with a variety of tax issues from the immediate need to complete their own tax returns to the larger debate about broad tax policy moving forward,” said David Bergstein, CPA, a tax analyst for CCH CompleteTax®.
“All of this is amplified by a weak economy that has battered taxpayers’ wallets over the past year. They’re clearly saying they need tax breaks and they want change in Washington,” added Bergstein.
More is Needed
The CCH CompleteTax survey asked taxpayers which of the various tax-break provisions being debated in Congress as part of the tax stimulus package would help them the most.
Nearly two-thirds of taxpayers (63%) said all the provisions identified would help, but that more needed to be done. Among the individual provisions cited as the single most helpful to taxpayers:
- A credit of up to $500 against a taxpayer’s income tax, according to 9% of taxpayers overall; taxpayers earning $30,000 or more selected this tax break more often than other taxpayers as the single most helpful;
- Increasing the amount of Earned Income Tax Credit (EITC) available to low-income taxpayers, according to 9% of taxpayers overall; this was the single most cited tax provision identified by taxpayers earning less than $30,000 as most helpful;
- An increase in the Hope higher education credit from $1,800 to $2,500, according to 7% of taxpayers;
- Making the $1,000 child tax credit available to more taxpayers with dependents, according to 7% of taxpayers; and
- A credit to first-time homebuyers that does not require future repayment, according to 5% of taxpayers.
“Many in Congress also believe more needs to be done, which is why more proposed tax breaks were added to the legislation on the Senate floor,” said Bergstein.
Saving for Retirement Tops Tax Breaks People Want
With many people’s 401(k) and other retirement savings severely diminished after last year’s poor stock market performance, taxpayers overwhelmingly want to see tax breaks for fortifying their nest eggs. According to CCH CompleteTax survey respondents, the biggest tax breaks for taxpayers should come from:
- Saving for retirement, identified by 84% of taxpayers; individuals 35 years old and older selected this more often than younger taxpayers;
- Buying and owning a home, identified by 82% of taxpayers;
- Saving for education, identified by 79% of taxpayers; young taxpayers, under age 35, selected this more often than older taxpayers;
- Having and raising children, identified by 77% of taxpayers;
- Donating to charities, identified by 70% of taxpayers; and
- Living in an environmentally friendly way, identified by 69% of taxpayers.
President for a Day: Taxpayers Prioritize Government Income and Spending
Each year, the federal government reports its sources of income and outlays. Among its top 2007 income sources, the most recent available, were:
- Personal income taxes, accounting for 43% of income;
- Social Security, Medicare, unemployment and other retirement taxes, accounting for 32% of income;
- Corporate income taxes, accounting for 13% of income; and
- Excise, customs, estates and gift taxes, accounting for 6% of income.
However, if taxpayers had their way, they would reorder revenue sources. According to the CCH CompleteTax survey, taxpayers believe corporate income taxes should be the largest source of federal income followed by personal income taxes and excise, customs, estate and gift taxes.
As for spending, taxpayers’ priorities also don’t appear to be the same as actual federal outlays. For 2007, federal government spending was on:
- Social Security, Medicare and other retirement programs, 38% of spending;
- National defense, veterans and foreign affairs, 23% of spending;
- Social programs, including Medicaid, food stamps, unemployment compensation and public health programs, 19% of spending; and
- Physical, human, and community development, including education, environment, transportation, job training and housing credits, 9% of spending.
If taxpayers were in charge of the federal checkbook, however, their priorities would be different. According to the CCH CompleteTax survey, taxpayers believe the most should be spent on physical, human and community development. Following this, taxpayers would spend most on Social Security, Medicare and other retirement programs, followed by national defense, veterans and foreign affairs.
“Taxpayers may be choosing development as their top choice because they see it as the area of spending most likely to help ensure job creation and help restore the economy,” said Bergstein.
The nationwide telephone survey was conducted by GfK Roper on behalf of CCH CompleteTax from January 30-February 1, 2009, among 871 taxpayers (age 18 and over). The margin of error on weighted data is +/- 3.5 percentage points.
About CCH CompleteTax
CCH CompleteTax, an online tax preparation and e-filing service for the do-it-yourself taxpayer, continues to set the standard when it comes to making online tax prep and e-filing easy, efficient and affordable. CCH CompleteTax offers comprehensive support to help taxpayers through each step of preparing and e-filing both federal and state income tax returns.
About CCH, a Wolters Kluwer business
CCH, a Wolters Kluwer business (CCHGroup.com) is a leading provider of tax, accounting and audit information, software and services. It has served tax, accounting and business professionals since 1913. Among its market-leading products are The ProSystem fx® Office, CorpSystem®, CCH® TeamMate, CCH® Tax Research NetWork™, Accounting Research Manager® and the U.S. Master Tax Guide®. CCH is based in Riverwoods, Ill.
Wolters Kluwer is a leading global information services and publishing company. The company provides products and services globally for professionals in the health, tax, accounting, corporate, financial services, legal and regulatory sectors. Wolters Kluwer has annual revenues (2007) of €3.4 billion ($4.8 billion), maintains operations in over 33 countries across Europe, North America and Asia Pacific and employs approximately 19,500 people worldwide. Wolters Kluwer is headquartered in Amsterdam, the Netherlands. For more information, visit www.wolterskluwer.com.
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