AUG#: +130,000 jobs.

Unemployment up at 3.7%...AUG jobs under Trump HERE

Monday, April 18, 2011

45% of Households Pay No Taxes!


Updated 9/18/2012:  Republican Presidential Candidate Mitt Romney speaks with derision and disdain about the "47%" who supposedly pay no taxes.  Commentary HERE.

Ezra Klein at Wonkblog itemizes those who don't pay income taxes HERE. 

A few weeks back I posted:  "47% of the People Pay No Taxes!".  Here's an update for Tax Day:

CNN ran an article this morning about the percentage of people who will pay no taxes in 2010.  Now, I'm assuming that CNN means that these 45% of households had no tax obligation, meaning that they didn't owe a dime for all of 2010, not that they paid earlier and don't owe anything now.  Also, many of the people who won't pay federal taxes will pay state and local taxes as well as FICA employment taxes, sales taxes, property taxes either through their mortgage or rent.

Some rich people also paid no taxes!

The CNN article tells us why various groups pay no taxes.   The families who pay no taxes are concentrated among those who have incomes less than $50,000, with highest concentrations among those who have incomes less than $30,000.  93% of those who pay no taxes have incomes less than $50,000.  But about .7%, that is, seven tenths of one percent of the 68 million, have incomes that exceed $100,000.  And 4,000 individuals have incomes in excess of $1,000,000 and pay no tax!

Poor people either don't make enough money to pay taxes or they get credits for things like college, children, mortgage interest deductions.  Of course, some are unfortunate enough to have such high medical costs that their income is taken down to almost nothing in terms of taxes.

Of the rich guys paying no taxes:

Very high-income households can fall into the non-payer group if they get their income from tax-exempt bonds or overseas sources for which they get foreign tax credits, according to Roberton Williams, a senior fellow at the Tax Policy Center.
As I wrote in my first article on this :  It really is a shame in a rich country such as ours that so many people do not make enough money to pay taxes. I didn't realize, however, that so many of the non-payers were wealthy, and that is a bigger problem!

Would you really prefer to make $30,000?

If you are disturbed that so many pay no taxes, here is another way to look at this:  How many of us would really want to trade places with a family struggling with an income of $30,000/year just so we can pay nothing in federal income taxes?

So, if you in this miserable economic climate, are making enough money and you are healthy enough to pay a nice chunk of change in federal taxes, perhaps it is time to count your blessings.  Be happy that last year you didn't get hit by a serious illness, that you weren't laid off from your job, or that your business didn't go bust.  

Update on Tuesday, April 19th:

Here's a great article I came across earlier today about "Tax Myths and Tall Tales"

Some of the topics:
  • Poor Americans DO pay taxes!
  • The wealthiest are paying less taxes.
  • Many of the richest pay no income taxes at all.
  • ... and more! 
The author of the article links to a pdf from the Institute on Taxation and Economic Policy.  It shows that, in 2007, the lowest 20% of the population in terms of income paid about 11% in state and local taxes, while the top 1% paid less than 5%.  Definite required reading!  

And here's an interesting tidbit from the "Tax Myths" article:
(By the way, during seven of the eight Bush years, the IRS report on the top 400 taxpayers was labeled a state secret, a policy that the Obama overturned almost instantly after his inauguration.)
More required reading! 

Update on Sunday, September 18th, 2011:

Here's another great link from the Daily Kos which provides more information on those supposedly lazy slackers who don't make enough to pay federal income taxes.  It looks as though a good 30% who pay no taxes are destitute, elderly, or the young.

Updated 9/18/2012:  Republican Presidential Candidate Mitt Romney speaks with derision and disdain about the "47%" who supposedly pay no taxes.  Commentary HERE.

Ezra Klein at Wonkblog itemizes those who don't pay income taxes HERE. 

2 comments:

  1. Technically the right should re-word this lie to 45% (47% and 50% are also used) pay owe no income taxes, but that doesn't make the talking point sound so outrageous or offensive to their audience.

    kamachanda

    ReplyDelete
  2. Thanks for your comment, Kamachanda, I don't know how I missed it. But you are quite right. "Half of the people pay no taxes!" is quite a talking point.

    ReplyDelete

I appreciate intelligent comments and questions, including those that are at odds with anything posted here. I have elected not to screen comments before they are published; however, any comments that are in any way insulting, caustic, or intentionally inflammatory will be deleted without notice. Spam will also be immediately deleted.