With Tax Day looming, Americans are growing frustrated over the costs of filing their taxes, tax fairness, and high inflation. In fact, a new survey from WalletHub found that 91% of Americans think filing taxes should be free.
In addition, two in three people describe tax preparation companies that advertise free tax filing services as “bait-and-switch” schemes.
“Some are, some aren’t,” Robert Nassau, director of the Low Income Taxpayer Clinic and teaching professor at Syracuse University College of Law, said in WalletHub’s 2025 Tax Survey report. “There are definitely free tax filing services (I’ve helped people use them), but one has to be careful when using them not to be ‘tricked’ into paying for something they don’t need. And sometimes people expect more from the service than the service is willing to provide for free; to me, that’s not really what I would call bait and switch.”
“At the risk of overusing a tired cliche, if something is too good to be true, it probably is. Another of my favorites is there is no free lunch. Unless the filing service is being offered by a legitimate nonprofit (such as a law school’s clinic serving low-income taxpayers), the prudent assumption is the so-called ‘free’ service is not free but has hidden costs,” added Susan Pace Hamill, research professor of law at the University of Alabama School of Law. “I would argue this scenario is immoral because low-income people, who are vulnerable to scams, are being taken advantage of, and the real cost for this service is being obscured by the false advertising of ‘free.’ I would support laws sharply curtailing and imposing significant consequences on perpetrators of this.”
WalletHub surveyed 200 taxpayers and asked them their thoughts on a variety of tax issues. One interesting result was that 66% of Americans believe their tax rate is too high versus 31% who say it’s just right and 3% who think their tax rate is too low.
“Many decades ago, federal income tax rates were as high as 91% for the highest-income individuals and were at 70% before being lowered to 50% in 1981. Today, the individual income tax rates range from 10% to 37%. We also have a lot more deductions and exclusions today that lower effective tax rates. When factoring in payroll taxes which are 15.3% for employees (if counting both what the employee and employer pay on the wages), that is relatively high as some individuals with mostly investment income may be at rates between 15% and 23.8%,” Annette Nellen, CPA, Esq., professor and director of the MST Program at San Jose State University’s Lucas College and Graduate School of Business, said in the survey report. “There is a need to examine our tax and budget systems to see how tax rates can be lowered, particularly for low-income workers, as well as see how some of the special tax breaks, such as a lower tax on capital gains, no tax on gains at death, and no tax on health insurance paid by employers, should be modified to better equalize tax savings among all taxpayers.”
“Saying that 66% of Americans think their current tax rates are too high is pretty broad. Which rates are being referred to? If the question refers to individual income tax rates, the federal rates in the U.S. are actually lower than many of other Organization for Economic Cooperation and Development countries,” added Alisha Harper, executive director of graduate programs at Bellarmine University’s Rubel School of Business. “The bigger issue is probably the sheer number of taxes Americans pay. It’s not just income tax at the federal, state, and sometimes local levels, it’s also employment taxes (whether you are self-employed or an employee), sales tax, real property tax, personal property tax, and more. One way or another, Americans are taxed every single day.”
Other key findings from WalletHub’s 2025 Tax Survey include:
- Inflation concerns: Seven in 10 Americans are more worried about inflation than taxes right now.
- Tax filing vs. jury duty: Nearly one in three people would rather do jury duty than their taxes.
- Tax fairness: 77% of people believe that the rich don’t pay their fair share in taxes.
- Tax Day fears: 35% of people fear not having enough money to pay on Tax Day, while 22% worry about making a mathematical mistake, and 20% are concerned about identity theft.
- Tax evasion awareness: More than one in four Americans know someone who has cheated on their taxes.
“It is unacceptable to have the current level of noncompliance. It undermines and demoralizes honest people who do not cheat and produces anger from those who can’t cheat (e.g., those only having wages as their income) that can easily be manipulated by demagogues,” Hamill said. “The solution is more staff at the IRS, especially targeting wealthy taxpayers that have more opportunities than the average taxpayer to hide income or characterize non-deductible expenses as deductible. Unfortunately, the recent trend to cut IRS staff is only going to exacerbate cheating.”
You can find the complete survey results here.
Thanks for reading CPA Practice Advisor!
Subscribe Already registered? Log In
Need more information? Read the FAQs
