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Does Gen Z pay too much taxes?

Income taxes are used to pay for government obligations, provide goods for citizens, and finance public services. (Photo: shutterstuck.com)

Does Gen Z pay too much taxes? As members of Generation Z (born 1997–2012) begin to enter the workforce, they are paying closer attention to their tax payments and determining whether or not they are making a fair contribution. And it turns out that most of Gen Z is content with their current rate of compensation.

A recent GOBankingRates survey found that more 18 to 24 year olds than any other age group believe they are paying a fair share of taxes at 57%. Also, this generation is most satisfied with the use of its tax dollars.

 

Generation Z: Stepping Into Financial Independence

Generation Z adults—individuals who are between 18 and 25 years old—prove to be more financially sophisticated than any previous generation was at their age, according to The 2022 Investopedia Financial Literacy Survey. But they also have the most to learn. Photo via Investopedia / Alison Czinkota

 

75% of Generation Z believes their taxes are fair.

Gen Z is by far the group of Americans who believes that taxes are levied fairly.

57% of Gen Z adults between the ages of 18 and 24 responded positively when asked whether they felt they were paying “their fair share” of taxes. The findings show that older generations do not share the same viewpoint. Just 38% of participants aged 25 to 34 provided the same response. Only 36% of Americans over 65 in the

Gen X and older group believe they are taxed fairly, compared to 39% of those aged 55 to 64.

When it comes to how their tax dollars are being spent, Gen Z is also the group that is the happiest. Impressively, 69% of Gen Z adults think their taxes are used wisely. While just 32% of respondents aged 55 to 64 chose this response, Gen X and baby boomers are less likely to agree. Furthermore, only 45% of Those 65 and older think their taxes are being used appropriately.

 

Gen Z or Boomers: Who’s Happier With How Their Tax Dollars Are Being Spent?

It’s no secret that the majority of Americans dread tax season, and getting their financial affairs in order is an annoying burden many would rather not deal with. However, for those who feel their tax dollars are being spent wisely, the hassle of filing might not weigh quite so heavily. Photo via fizkes / Getty Images/iStockphoto

 

The Gen Z Group Is Open to Environmental Taxes

The Gen Z group is incredibly passionate and more likely to provide money to projects they support. They may believe their taxes are fair because they support the government spending the money to protect the environment and are an environmentally concerned group.

Varsha Subramanian, a CPA at FlyFin, remarked, “I’m witnessing Gen Z taxpayers who are generally more socially and environmentally sensitive than earlier generations.” “Tax incentives that benefit the environment, like the EV Credit, are appealing to them. If people think the money is being used to address important concerns like social inequality or climate change, they are more inclined to pay taxes.

 

Read More: Survey Result Gen Zers Are More Satisfied With How Their Taxes Are Being Spent Than Boomers

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Also, they’ll pay for government services.

Generation Z experienced a very difficult economic environment while growing up, therefore they would not mind paying taxes if the money goes to resources and programs provided by the government that assisted them.

I am working with younger customers who experienced the effects of the 2008 financial crisis on the labor market, the economy, and their families as children or young adults, according to Subramanian. They had a stronger understanding of the value of government services and the contribution that taxes make to their support because of their financial difficulties.

 

Social Issues That Matter to Generation Z

With tech­nol­o­gy at their fin­ger­tips — and a reg­u­lar tool in their grow­ing hands — Gen Zers have been able to con­nect to far­away cul­tures, issues and news ear­li­er and more often than any gen­er­a­tion before them. As a result, Gen­er­a­tion Z mem­bers tend to be more open-mind­ed, lib­er­al-lean­ing and active­ly engaged in advo­cat­ing for the fair and equal treat­ment of others. (Photo via https://www.aecf.org/blog/generation-z-social-issues)

 

As Relative to Previous Generations, Gen Z’s Tax Contributions Are Little.

Although Gen Z employees still have to pay taxes, because they are a young generation, they generally contribute less than people in older age groups. It follows that they shouldn’t be as concerned about their tax bill. Further analysis of the data reveals that this generation is more likely to be dissatisfied with their housing expenses than their taxes.

Gen Z pays around 14% of their annual income in taxes, according to John Wayman, a personal finance expert at Personal Financial Guru, if they make an average salary of $30,000. “It comes to about $350 each month. Nonetheless, a one-bedroom apartment in the United States often costs close to $1,300 per month to rent.

 

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