red states, blue states

WalletHub

With Tax Day looming and Americans still figuring out the new tax code, WalletHub today released its 2020 Taxpayer Survey as well as its yearly report on the States with the Highest & Lowest Tax Rates (accompanying videos included) in order to help people better understand this confusing time of year. You can find highlights from both below, followed by the full list of WalletHub’s 2020 taxpayer resources.

Tax Rates in Ohio (1=Lowest; 25=Avg.):

  • 44th – Overall Effective State & Local Tax Rate
  • 44th – Income Tax
  • 39th – Real-Estate Tax
  • 1st – Vehicle Property Tax
  • 32nd – Sales & Excise Taxes

2020 Taxpayer Survey

  • 30% of people say making a math mistake as well as not having enough money are their biggest Tax Day fears, edging out identity theft (21%) at the top of the list.
  • 37% of people would move to a different country for a tax-free future. 26% would get an “IRS” tattoo and 19% would stop talking for 6 months.
  • 34% of people think charities would make the best use of their tax dollars, outnumbering by nearly 2.5 times people that trust the federal government the most with their taxes.
  • The average red-state tax rate is 10.67%, just under the average blue-state rate of 10.93%.

Democrats vs Republicans

Areas of Agreement:

  • Both agree that rich people do not pay their fair share in taxes.
  • Both agree that poor and middle class people do pay their fair share in taxes.
  • Both agree that their tax rates are too high.

Areas of Disagreement:

  • Most Democrats say corporations should pay higher taxes rates than consumers; most Republicans don’t agree.
  • Democrats say healthcare should be the biggest priority in the 2020 elections, followed by taxes. Republicans vote for national security, healthcare and immigration ahead of taxes.

WalletHub’s 2020 Taxpayer Resources

  1. What to Do if You Can’t Pay
  2. Pros & Cons of Paying With Credit
  3. Tax Scams & Tips for Avoiding Them
  4. Last-Minute Tax Tips
  5. Property Taxes by State

Q&A with WalletHub CEO Odysseas Papadimitriou

Why do so many Americans feel the government does not spend their taxes wisely?

“There are a variety of reasons why roughly 222 million Americans think the government does not spend their tax dollars wisely, according to a new WalletHub survey, but they largely boil down to the accurate perception that government is less efficient with its investments than the private sector, the dissonance between what we pay and the benefits we receive in return, and deep-seeded distrust of politicians,” said WalletHub CEO Odysseas Papadimitriou. “We feel the pain of this big outlay of hard-earned money like a punch in the gut. Not to mention, every election season, there’s a lot of talk about waste, fraud and abuse costing the country billions. You really can’t blame people for feeling like their money might not be in the right hands after hearing that refrain over and over.”

Where would people prefer to divert their tax dollars?

“A plurality of people would prefer to give their tax dollars to charities than any level of government. When people have to pay taxes, they’d much rather do so as locally as possible,” said WalletHub CEO Odysseas Papadimitriou. “Americans would rather pay taxes to their local government than their state, and their state over the federal government. I think this reflects just how much people distrust the federal government and special interests.”

What should taxpayers be worried about on Tax Day?

“Americans’ biggest Tax Day fears are making a math mistake and not having enough money, with each receiving about 30% of the vote,” said WalletHub CEO Odysseas Papadimitriou. “Making a math mistake should be less of a concern than having enough funds to pay what’s legitimately owed, however, especially for people who give themselves plenty of time to complete their tax return and double-check it for errors. There are lots of free tax-prep tools to help make sure the numbers add up. And considering how much debt we owe, a big chunk of cash probably won’t be as easy to come up with, particularly in a hurry.”

What should people do if they can’t pay their taxes?

“If you can’t afford your tax bill, you should file a return anyway in order to avoid penalties while you determine the best course of action for payment. Two of the best options are simply waiting for a bill if you’re dealing with very temporary cash flow issues and requesting a 120-day extension,” said WalletHub CEO Odysseas Papadimitriou. “But if you need more time to come up with the money, there are a number of other options, including paying your taxes with a credit card, entering into an installment agreement with the IRS, or taking out a personal loan.”

Source: WalletHub