If you are a visual person, probably, you are aware of Visual Capitalist, a website that contains great graphics in almost any topic (i.e. Economy, Wealth, Automotive, Healthcare, etc.). This website is always posting interesting graphs, tables and other visual elements. Recently, they posted two tax related ones that are worth mentioning:

1) What Frustrates Americans About the Tax System

The graph from Visual Capitalist is based on a post from Pew Research, titled Top tax frustrations for Americans: The feeling that some corporations, wealthy people don’t pay fair share where it  includes the result of their poll and also include more details on the responses based on political view, income level, etc.

In general, the American people are extremely frustrated with

  1. corporations not paying a fair share – Note that that corporations are subject to the 21% Federal rate (lower than some taxable brackets at the individual level up to 37%). However, the effective rate can be significantly lower due to deductions, credits, etc. like exposed in the article These 19 Fortune 100 Companies Paid Next to Nothing—or Nothing at All—in Taxes in 2021 from American Progress website or the more recent CNBC article titled How companies like Amazon, Nike and FedEx avoid paying federal taxes like Amazon paying an effective rate of around 5%.
  2. wealthy people not paying a fair share and – It is difficult find one consistent method to define wealthy these days, but I assume that we are using the $400,000 income level threshold that the IRS is using to avoid increasing audit rates. If the definition refers to centi-millionaires or billionaires, then, they can take advantage of favorable taxable on capital gains, real estate investments, etc.
  3. complexity of the tax system – As a tax professional, I agree that the Tax Code is extremely dense, thousands of rules and regulations, numerous loopholes, room for advanced tax strategies, etc. These days operating a small business is each time more complicated with additional compliance (i.e. BOI – Beneficial Ownership Interest), interest and penalties at 16 year high, more focus on examinations from the IRS, etc.

It is fair to consider that people are frustrated paying taxes, but we should not consider the extreme outliers as the norm. Super size corporations or billionaires have internal departments and tax consultants to legally reduce their taxes spending millions to save billions. However, it was the legislative branch that allowed those special rules, benefited certain industries or types of investments, etc.

2) Visualizing the Tax Burden of Every U.S. State

The graph from Visual Capitalist is based on Tax Burden by State by Wallethub that includes other information like tax as % of personal income or real estate as % of personal income.

The tax burden has been calculated as the addition of a) property tax burden, b) individual tax (some States do not have this tax like Florida) and c) Sales & excise tax. As you can imagine, the winner for highest tax burden is NY (followed closely by Hawaii, 2nd and Vermont, 3rd).