This is a real problem. It would seem to be the role of the media, lame or otherwise, to actually explain things to people, but that is not happening. I bet less than 50% of Americans understand how progressive tax rates work. How many know that Social Security is paid on the first dollar of wages or that there is a cap on payroll taxes? How informed are people on how current tax rates compare to historical rates or what percent of GDP government spending comprises now compared to the past.
Do most people understand what capital gains are or know that they are taxed at lower rates than other income? My very liberal sister thought that even though my mother’s estate was below the estate tax exemption we were personally going to pay taxes on our modest inheritance. Heaven knows what a Fox viewer thinks.
Personally, I have no idea what percent of Medicare and Medicaid is paid out of payroll taxes vs the general fund nor am I totally clear on what each of those programs do.
A few less stories on celebrities and a few more pie charts would sure help public discourse.
This is privileged knowledge for tax accountants, MBAs and economists. It increases and maintains their prestige, job prospects and usefulness. We are at the point where that is more important to the people who make the decisions than any muzzy-headed Athenian notions of “public discourse.”
Making sure every armchaired warmbody has a halfassed understanding of the system would only ruin them for their real role: to be swayed by spinmeisters - another prestigious and important industry - and vote accordingly.
I took Physics and Calculus in college, so I’m far from mathematically illiterate. (Innumerate?) I find the lack of detail in reporting on tax issues to be very frustrating. I’m sure they leave out the math in an effort to make it simpler, but for those who would understand it becomes more complicated, as we try to translate their words into actual numbers. I notice the same problem every few years when a new “flat tax” proposal gets floated.
The IRS forms don’t help matters. They’re written in a form of cookbook legalese that maybe helps get them done, but doesn’t help me much to understand what I’ve just done.