Taxes

Americans Say Government Wastes Half of Every Tax Dollar it Collects

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With Tax Day just a few days away, the latest Reason-Rupe poll finds that Americans think their government wastes fifty cents of every dollar they hand over in taxes. In fact, the middle half of Americans thinks government wastes anywhere from 30 cents to 80 cents of every tax dollar.

This suggests Americans believe the federal government should be able to make do with just half of the money it collects each year. With perceived waste this high, it's less surprising that only 17 percent of Americans think their income taxes did more to improve society than had they given that money to charity or invested in private businesses.

Gallup first began asking this question in the late 1970s and early 1980s, finding that Americans generally thought the government wasted about 40 cents of every tax dollar. This number has steadily increased, rising to 46 cents on the dollar in 2002, and then in September 2011, Gallup reported Americans' perception of government waste had exceeded the 50 percent threshold. Reason-Rupe has continued re-asking this question since 2012, finding perceived government waste hit a record of 60 cents of every dollar in September 2013. However, since last fall concerns of government waste have fallen back to 50 cents on the dollar.

Tea party supporters are considerably more likely than their Republican counterparts who don't support the movement to perceive government waste. Tea partiers estimate the government wastes 65 cents of every dollar it collects compared to 55 cents among regular Republicans who don't support the movement. Not only does the average tea partier perceive more waste, their estimates ranged far wider. The middle fifty percent of tea party responses (the interquartile range) range from 50 cents to 95 cents on the dollar. In contrast, the middle fifty percent of regular Republicans ranged from 35 cents to 75 cents.

Independents perceive more government waste (59 cents) than Democrats (47 cents) and slightly more than Republicans (55 cents). Older people (57 cents) were also slightly more likely than younger Americans (50 cents) to perceive waste. Those with higher levels of education are less likely to think the government wastes money but average estimates never drop below 40 cents on the dollar. For instance, those with high school diplomas estimate government wastes 59 cents of every tax dollar compared to 44 cents among those with post-graduate degrees.

While sociodemographic groups vary in their perception of government waste, they each on average think government wastes about half of their tax money, which is considerably higher than 20 years ago. 

* Comparison of subgroups shows averages according to the mean response. Bars represent the interquartile range indicating responses between the 25th and 75th percentile of respondents. 

Nationwide telephone poll conducted March 26-30 2014 interviewed 1003 adults on both mobile (503) and landline (500) phones, with a margin of error +/- 3.6%. Princeton Survey Research Associates International executed the nationwide Reason-Rupe survey. Columns may not add up to 100% due to rounding. Full poll results, detailed tables, and methodology found here. Sign up for notifications of new releases of the Reason-Rupe poll here.

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  1. The truth is, they waste 100 cents of every dollar by definition. If that dollar needed to be spent on what they spend it on, private citizens would have done so voluntarily. The only reasonable way to define “need” is an individual deciding what to do with his own resources.

    1. GDP = federal spending + non-federal spending + net exports.

      1] It is impossible for the Monetarily Sovereign (US govt) to wastefully spend. All spending is some other entity’s INCOME.

      2] Taxation at the federal level is involuntary savings. You have every opportunity in a “free market” to earn back each penny of any previous tax liability. Millions upon millions of Americans with millions upon millions of ideas about spending (“their money”)? Do you proclaim that all taxed Americans have perfect knowledge? Your idea is based solely upon non-egalitarian, solipsistic egoism.

  2. What are the statistics on how much the government actually wastes? Is it less or more than half?

  3. Another good question would be for each group to categorize what it considers to be wasteful spending to observe the dynamics of this argument.

  4. GDP = federal spending + non-federal spending + net exports

    If “wasteful” means “non-productive” or “valueless”, a Monetarily Sovereign government cannot spend wastefully. It’s impossible. If the federal government were to pay 1000 people $1,000 each to dig a hole and fill it in, most people, ignorant of economics, would claim that’s wasteful. It isn’t. I

    Sure, there are MORE PRODUCTIVE USES for that million dollars, than digging a hole and filling it in, but 1000 people now have an additional million dollars to spend. Business and other creditors will receive those million dollars, and they will hire and pay employees, and on and on.

    ALL these polls invariably are rigged via leading questions to make you believe that somehow this “waste” is costing you money, when in fact, reducing the “waste” is what costs you money.

    Federal finances are different from your “kitchen table” finances. The federal government is Monetarily Sovereign. You are monetarily non-sovereign. The two are diametrically opposite.

    Being Monetarily Sovereign, the government can create dollars endlessly, without collecting taxes and without borrowing endlessly. (The limit to federal spending is an inflation that cannot be cured via interest rate control. The deficit is “paid for” by entities spending LESS THAN THEIR INCOME, the savers, who purchase US federal debt. Taxpayers do not pay for this debt nor do taxpayers pay for any federal deficit spending.)

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