47% of US households will pay no fed income tax

[bik0]

Why is this so out of wack? Why is the number of those who pay no federal income taxes skyrocketing? Between 1950 and 1980 the average number on federal income tax non-payers was 21% - now it's 47%. http://www.taxfoundation.org/publications/show/25962.html

WASHINGTON (AP) -- Tax Day is a dreaded deadline for millions, but for nearly half of U.S. households it's simply somebody else's problem.
About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That's according to projections by the Tax Policy Center, a Washington research organization.

Tax cuts enacted in the past decade have been generous to wealthy taxpayers, too, making them a target for President Barack Obama and Democrats in Congress. Less noticed were tax cuts for low- and middle-income families, which were expanded when Obama signed the massive economic recovery package last year.

The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education. It is a system in which the top 10 percent of earners -- households making an average of $366,400 in 2006 -- paid about 73 percent of the income taxes collected by the federal government.
The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.

"We have 50 percent of people who are getting something for nothing," said Curtis Dubay, senior tax policy analyst at the Heritage Foundation.
The vast majority of people who escape federal income taxes still pay other taxes, including federal payroll taxes that fund Social Security and Medicare, and excise taxes on gasoline, aviation, alcohol and cigarettes. Many also pay state or local taxes on sales, income and property.

http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0&.v=1

[madinmaryland]

1. Apparently this piece was written by the Heritage Foundation.

"The bottom 40 percent, on average, make a profit from the federal income tax"

:wtf:

Right wing propaganda.

[hfojvt]

16. not really, that's fairly accurate

my tax bill was zero and then I got the REFUNDABLE Obama tax credit of $400. If not for my capital gains this year I would also have gotten a refundable EIC. Then too, the child tax credits are refundable as well and the EIC is much larger for families with children.

Part of the balance of that is while they look at the percentage that pays no income tax, the amount of FICA taxes which workers are paying has gone way up since the 1970s and employers have to match that as well, which creates a downward pressure on wages.

[Hannah Bell]

36. tax foundation *is* right wing. they have two schticks: one is saying the bottom

have don't pay enough income taxes (negliging to explain the *real* reasons why that's so), & the other is saying we all have to work four (5, 6, whatever) just to *pay* our income taxes - they're the sponsor of "tax freedom day" (the day you supposedly stop working for uncle sam & start working for your own profit) -- their two schticks are somewhat contradictory, but that never stops wingers.


http://www.taxfoundation.org/taxfreedomday/

[madinmaryland]

45. It's interesting when you read these things how there are key words and phrases

that they use, which give them away as the right wing anti-tax nuts they are, everytime.

[iris27]

2. And?

Lemme highlight this for ya:

The vast majority of people who escape federal income taxes still pay other taxes, including federal payroll taxes that fund Social Security and Medicare, and excise taxes on gasoline, aviation, alcohol and cigarettes. Many also pay state or local taxes on sales, income and property.

Make that state AND local taxes on sales, income, and property around here. Fuck, my county even collects business property taxes from me...something my entreprenurial relatives in more rural parts of the state don't have to deal with.

Anyway, I'm part of that bottom 90% of earners who pays 29% of the income taxes collected by the government -- but you can bet your ass that I pay a higher effective portion of my income in taxes than anyone in that top 10%. Money sitting in a mutual fund incurs no sales taxes or excise taxes.

ETA: Can someone please unrec this RW think-tank nonsense to cancel out my accidental rec?

[LooseWilly]

27. Yup...

Covered your accidental rec.

The simple answer: "Because 47% of Americans make so little that there's nothing left for the government to take." is apparently too complicated for the 'poor bastards' in the top 10% of earners category.

If it's such a burden for those top earners, I'll switch jobs with them and then cover their tax liabilities for them... they can enjoy my unemployment from a independent contractor job that comes with... no unemployment checks after the fact. Presto... they won't have to pay any taxes anymore! Yaay.

I'll hold my breath waiting to be taken up on that... get back to you when I regain consciousness. :tinfoilhat:

[kath]

33. +1000.

[Fumesucker]

3. Now give us the figures for payroll tax..

Talking about just the income tax gives a very distorted picture of who pays what to the government in the USA..

Which is why there are so many people who talk just about income tax.

[dkf]

8. If you want to count payroll taxes as plain old taxes that are paid just like

Any other tax with no claim on future benefits I'm sure that will be the argument used by repubs to negate any obligation. It was just a tax like any other tax. I can hear it now.

[Fumesucker]

12. But they are taxes paid to the federal government..

And they are massively regressive.

Not to mention that there is no cast iron guarantee of future benefits, such benefits are purely dependent on the whims of Congress.

[Statistical]

42. There is no obligation

Unlike a pension or insurance policy the govt can change the terms of SS anyway it sees fit with no recourse.

Looking at income only tax is stupid.

Federal income Tax + FICA + state income tax + sales taxes + real estate tax + excise tax (gas, tobacco, guns, etc) = total taxation.

The only thing that matters is total taxation. How they govts cut it up is really meaningless.

If I pay $12,000 in total taxation I pay $12,000 in total taxation. It doesn't matter if it is $5,000 income tax and $7,000 everything else or $0 income tax and $12,000 everything else.

[LeftyMom]

4. That number involves an odd definition of "federal income tax" that excludes many federal taxes on

income, such as those for Medicare and Social Security. Many of these are regressive and disproportionately effect low income earners, but of course the Heritage Foundation chooses to exclude these entirely in order to make a distorted point about the plight of the well-off.

[Toucano]

13. Thank you. n/t

[hfojvt]

20. that's the standard definition of income tax

as the form 1040 says right on the top "US individual income tax". FICA taxes are not on income, they are only on wage income. Thus the money I made this year from capital gains, and interest was not assessed with FICA taxes.

Also, the snip does mention FICA taxes right before the link.

But you are right to point out that FICA taxes are regressive and those taxes have gone up by quite a bit since 1950.

[DCKit]

5. What exactly are they bitching about? The fact that they got the teahadists worked up...

for NOTHING? Scaring the shit out of their sheeple with "He's going to increase your taxes" was #2 only to "He's going to pull the plug on Grandma" last year.

If I didn't know the M.O., I'd say these folks need their brains checked out, but this is just another case of "Say anything and 29% of the population will get all worked up over it and send us checks."

[RandomThoughts]

6. Most wealth is made off of not working.

The moving of money, or making money off of money.

Why do most Americans have to support that group with their real work?

[StClone]

29. Moving money is just that., moving money...

Not creating wealth but simply shifting it or holding artificial paper wealth.

REAL wealth is only created by work, manufacturing and natural resources.

What people don't seem to realize is that all the power and money, mostly centered around the NE (Wall Street) U.S., comes from what is skimmed from the farmers, manufacturers, laborers and such.

Not everyone can be rich (Capitalism's dream) but people may cluster around a comfortable average middle (more Socialistic) class.

[TwilightGardener]

7. Fine with me, if that's the bottom-earning 47% of this country.

They still pay other taxes, anyway.

[jody]

9. The top 50% of those who file federal income tax forms pay over 97% of the tax. n/t

[Lyric]

15. Sounds fair to me.

I'm sure they also own 97% of the nation's wealth.

[jody]

23. Less than 1% of the population own over 50% of the financial wealth and control every major

multinational corporation.

[walldude]

10. You posted a study by the Heritage foundation? And you are taking it seriously?

You are joking right? Right???

[anigbrowl]

31. No, he didn't...the news report quotes the Heritage foundation but they didn't do the study

http://www.taxpolicycenter.org/aboutus/

'The Tax Policy Center is a joint venture of the Urban Institute and Brookings Institution.'

Liberal-leaning think tanks. Guess you didn't bother to read the OP properly.

[blogslut]

34. Wrong organization

taxfoundation.org is funded by the Koch Foundation - who also fund the Heritage foundation:

http://www.sourcewatch.org/index.php?title=Tax_Foundation
http://www.sourcewatch.org/index.php?title=Koch_Family_Foundations

The OP knows this but continues to post this stuff.

[anigbrowl]

44. Ah, sorry. I was referring to the study in the first paragraph of the news report

That one is by the Tax policy center. The link from the Tax Foundation (which I agree with you is a right-wing advocacy bunch, and a very poor citation choice by the OP) seemed to me like an editorial comment on the study from the tax policy center. I understood walldude to be complaining about the provenance of the study mentioned in the news report rather than the link which preceded the report.

[Xenotime]

11. Cool. Let the rich fund the way for all I fucking care.

We are hoping not to have to pay shit this year.

[blogslut]

14. Here, let me re-phrase that for you

47% of Americans qualify for full repayment of mandatory, annual loans to the US Treasury.

It's all in how you spin it, baby!

[gmoney]

25. or "47% of Americans are too poor to even be taxed"

[Toucano]

17. "...getting something for nothing..."

That's such bullshit.

They like to mix the terminology here to confuse.

I hope you're not falling for it.

[Democrats_win]

18. Several years ago, the so called "non-income tax payers" were mocked as "Lucky Duckies."

But guess what, those lucky duckies paid: First they paid $4 per gallon of gas and $4 per gallon of milk. Basically they saw a 50% loss in the value of the dollar. Then they lost their jobs and their houses.

They DID pay a tax that no one understands. It's a tax that governments apply through inflation. All of this was due to the fact that the wealthy refused to pick up the cost of the bush presidency. Instead we inflated our way out of some of the bush spending. During the days of the "Lucky Ducky" article, I said we'd pay for it through inflation. All along, the wealthy continued to have 20% gains in their wealth. Yet they still aren't paying. The small economic gains we are seeing won't last. Got inflation? You betcha!

[tularetom]

19. Good for them. If I could find a way to legally avoid taxes I'd do it.

But in a way, I appreciate what the government does for me.

So I don't really try that hard to get out of paying taxes.

[lumberjack_jeff]

21. I wish the Heritage Institute would make up their minds.

That fact should have them jumping for joy.

I kid. They want that number to be 20% - the richest 20%.

[StClone]

30. The Tax Foundation is not what or who they claim

They are backed by big Corps and their ilk. Is that surprising? Google them.

[Lithos]

22. Let's see

Most of those of the 47% are poor people barely able to get by in this economy, yet the Heritage folk like to think that they somehow should pay more to keep the rich people (ie, those with money) from paying more? Sorry, here's a penalty for not making enough money...

L-

[sandnsea]

24. More people are making less money? n/t

[Cresent City Kid]

26. I'm paying this year

My tax owed is a little more than the federal tax witheld. The amount witheld for income tax was only 17% of the total amount witheld. Social Security took the bulk of it. I make $25,000 per year so the amounts are relatively small and my taxes are simple, but I pay. I pay twice a month when I get my check, and a small amount on the 15th.

What I'm not clear on from the article is how 47% have no liability when I have a small, non-zero liability at my salary. Are there that many deductions? I'm serious, someone please educate me on this. I'm guessing that the earned income credit has a lot do do with it.

[LooseWilly]

32. Think "dependents".

Make $25k with a dependent and the federal tax liability is $78 if I remember right (I was just preparing taxes for a $25k income yesterday, and accidentally looked at the joint filing table...) — add in some student loan debt payments, maybe some other deduction for child care that I don't know about... you can get it to $0 pretty quick and easy. Start your own business, lose money, and write off utility costs and rental costs for the use of your home as an office... and you can drop off the tax table map pretty easily. The catch is that you have to survive while poor as hell...

(And yeah, it's really easy to only make $25k while saddled with student loan debt... especially if you are an artist, or a substitute teacher pursuing a credential, or a well paid intern, or a dizzying array of other things that qualify you for malnutrition... as you probably well know)

[BeFree]

28. Lying piece of shit article

The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education.

People pay property taxes, sales taxes and auto taxes for things like public safety, infrastructure and education.

[taught_me_patience]

35. This is pretty sad and plain wrong

everybody needs to pay income tax and have some "skin the the game". Even if someone pays 5%, they should still pay something.

[blogslut]

38. They do

Those who work pay withholding tax. The ones the report claims "pay no taxes" as simply the workers so poor that at the end of the year their mandatory withholding is returned to them. In essence, the working poor loan the Treasury a certain amount each year and are repaid after they fill out a form, proving they are owed the money.

[Obamanaut]

41. self delete. never mind. nt

[Statistical]

46. Not sad because it isn't true.

Income tax is only one form of tax. Measuring just income tax would be like measuring just calories from cheese. You could eat 500,000 calories a day but as long as it is little cheese you would be "low calorie". :)

The only metric that matters is TOTAL TAXATION.

FEDERAL INCOME TAX
PAYROLL TAX (FICA) = 15.3%
STATE INCOME TAX
EXCISE TAXES (gasoline, tobacco, firearms, etc)
REAL ESTATE TAXES
TARRIFS/DUTIES/ETC

So while the "poor" don't pay any income taxes they pay a much higher percentage of their income in excise taxes, sales taxes, tarriffs/duties (which raise price of goods so are an "invisible tax").

Looking just at income tax is a scam. The rich pay majority of income taxes so they want to make a big deal about income tax as if it is somehow special.

Only thing that matters is total taxation.

[Hannah Bell]

37. 10% of households have an unemployed member; 20% have an underemployed member.

median wage in us is around $15/hour.

last quarter, average us wage dropped, i believe this is the third quarter in a row.

blood from a stone, something like that?

those people at the tax foundation are dishonest winger gits.

according to them, while half of us pay no taxes, all of us work until april to pay uncle sam.

http://www.taxfoundation.org/taxfreedomday/

which is it, you sick defenders of the top 1%?

[krispos42]

39. This is obviously a lie by the liberal media.

I know it because the Tea Partiers told me that Obama raised my taxes. And my momma told me to trust ignorant people that are on government assistance and are too clueless to know it. Especially if they staple Lipton teabags to their hats and call themselves "teabaggers".

[Hannah Bell]

40. 2/3 of US corporations paid *no* taxes 1998-2005

http://www.nytimes.com/2008/08/13/business/13tax.html

[RedCappedBandit]

43. Something for nothing?

Like blood on our hands for the bullshit we pay for in the middle east?

yippee