"50% of Americans don't pay taxes!"

[Atypical Liberal]

One of the big talking points of conservatives is the mantra that "50 percent of American's don't pay taxes!". Aside from the obvious fact that what they really mean are income taxes, and that everyone pays sales taxes, gasoline taxes, and a host of other taxes, to paraphrase from a favorite movie of mine, "I do not think this means what you think it means."

Conservatives see this as a condemnation of literally one-half of Americans. They see this as evidence that literally half the country is either too stupid or too lazy to make enough money to be taxable.

But they ignore the absolute fact here: Half the nation is not making enough money to be worth taxing! If trickle-down economics worked so well, why would fewer and fewer people be making enough money to be worthwhile taxing?

Income tax data should be irrefutable evidence that trickle-down does not work.

[brooklynite]

1. And how to we find better jobs for them? CUT TAXES!

Because that always works...

[Skip_In_Boulder]

2. They have been spouting that old canard for as long as I can remember

It came up on a site I was on just a couple of days ago.

[Angry Dragon]

3. and you want them to listen to the facts??

they have sworn off facts for at least 30 years

[Urban Prairie]

4. And b/c "they" don't pay taxes, "they" should not have the "privilege" to vote, either.

I've seen that meme making the rounds recently, on some rightwing/non-partisan forums. Only property/income taxpayers should be permitted by law to vote, as part of their more "ideal" nation that they want to take back.

[awoke_in_2003]

50. what kills me...

it that, unless you are living with mommy, you are paying property taxes whether you own or rent. How do they think apartment complexes pay their property taxes? Oh, and their "ideal" nation probably means taking taking back the vote from African Americans and women

[handmade34]

5. yes

we must turn this on them everytime it's used... this republican plan continues the situation where over 50% of us don't make enough to pay income taxes...

[raccoon]

6. Is that even true, that 50% of Americans don't pay INCOME taxes?

I question that.

[Pacifist Patriot]

9. As do I.

[handmade34]

12. It is correct!

http://www.theatlanticwire.com/business/2010/04/47-percent-don-t-pay-taxes-no-big-deal/24826/
http://www.taxpolicycenter.org/UploadedPDF/1001289_who_pays.pdf


"...Upon closer inspection, the report proved much less incendiary than reported by the Associated Press and various right-wing blogs. As the New York Times' David Leonhardt noted: "The 47 percent number is not wrong. <...> But the modifiers here — federal and income — are important. Income taxes aren’t the only kind of federal taxes that people pay. There are also payroll taxes and investment taxes, among others. And, of course, people pay state and local taxes, too."

[JHB]

23. What portion of that are SS collectors?

If I understand correctly, SS income is not taxed. That would leave a portion of retirees whose taxable income (whatever they have on top of SS: pensions, investment income, etc.) is under the wire for Federal income taxes.

[indurancevile]

24. ss income is taxed, been so since 1983.

[JHB]

28. My misunderstanding then

[Atypical Liberal]

21. It's not quite 50%, but yes, it is true. n/t

[RaleighNCDUer]

26. I have been on the lower end of the scale all my life, and while I almost

always got refunds on my taxes, I don't think they EVER exceeded the amount taken from my checks. By the time I was eligible to receive child care credits, my income was high enough that the credits did not exceed my payments.

I think it is a lot more rare than we are given to believe.

[salin]

43. I have wondered the same thing. It's a new meme why are we just hearing it now?

[Igel]

46. You're hearing it now for a few reasons.

First, it's finally percolated through from conservative media.

Second, it's only recently that it's pushed towards the 50% number. It was lower, but the 2009 stimulus increased the # owing no federal income taxes.

Moreover, the stimulus and some other fairly recent bits of legislation (2008, I believe) made some of the tax credits refundable. So that income tax credit doesn't just offset income tax--it can also offset payroll tax or just be sent to you as cash.

Third, "shared sacrifice." If you pay no income tax and call for income taxes on others in the name of "shared sacrifice," are only two ways to share the sacrifice and that's to pay income taxes. The other way is to accept reduced benefits.

Yes, there are payroll taxes. But as a lot of people take pains to point you, you pay those in exchange for something. They're "insurance," and don't pay for discretionary spending, things like defense, for Medicare B/D, for federal education funding, for the federal judiciary or NIHS grants.

Then there are "sacrifices" like unemployment, inflation, that kind of thing. But they're not exactly viewable as sacrifices for the government (well, depending on what you think the source of unemployment, inflation, and the like are).

[Turn CO Blue]

7. But they never say how many Americans

are unemployed, are disabled, or mentally/terminally/chronically ill (are physically or mentally unable to work), or are under 16 (lot of children in this country) or over 65 (lot of seniors in this country) --

surely those five groups of folks alone total a large percentage of Americans???

And as the poster says - what a crying shame, what a weight on our shoulders it should be, that such a large number of Americans live below the poverty line low enough to not pay income tax. Boo hiss!

[Pacifist Patriot]

8. I've wondered about that statistic.

Is it half of all Americans, in which case I would think we would be hard-pressed to find an 8 year old tax payer.

Is it half of all Americans between the ages of 16 and retirement, thereby including stay-at-home mom's, inmates, homeless, etc.

Are they including people who file, but get a refund? Yes, I once knew someone who thought she wasn't paying taxes at all when she ended up with a refund at the end of the year.

Where do they get that percentage?

[clu]

10. 50% of americans

Earn under 30k per year

[salin]

44. I spent years making less than 30K - and always paid income taxes.

I still think the claim is fudged.

[NutmegYankee]

49. It's an effect of the Bush tax cuts.

The income credits and child credits make it possible for a family of four up to almost 50K to not owe for income tax.

[lumberjack_jeff]

11. When they say this, the answer is simple: "You're lying". Period. No caveats.

Sometimes we're our own worst enemies. We feel an obligation to help them make their arguments. If they're stupid enough to make their goddamn idiotic statements, it's their problem. It shouldn't be up to us to tell them what they really mean and then argue that point.

But yes, if they do happen to stumble on their real argument, (Acknowledging that in my state, a poor person pays 17.3% state taxes, plus 15% in Social Security taxes. Show me any rich person who pays 31% in effective federal taxes.) it's right to point out that if trickle down was such a swell thing, you wouldn't think that this would be the case.

[ejpoeta]

16. then you hear that flat tax magic bs floating around. i was looking around the web the other day

for info about camping as we just got a pop up camper and one site had this thing about the flat tax. then that side burn guy was going on about the flat tax on real time. gee who would benefit from THAT one. i know as a not well to do person who has to buy stuff every pay period I think I would end up on the losing end of that one. I am just now trying to get the kids their stuff for school. As someone who doesn't usually have much to save after I pay bills and buy groceries vs a rich person who seems to be able to save a lot more than me I think if they don't have to pay any taxes on all that money they win and we all lose!!

[drm604]

13. Sorry. Dupe.

Ignore.

[KurtNYC]

14. and we let them play both sides

They are saying "don't pay taxes" like it is a bad thing.

They complain when income-free people don't pay taxes AND when high income people DO.

[drm604]

15. How many of those 50% are too young to work.

From Wikipedia: http://en.wikipedia.org/wiki/Demographics_of_the_United_States#Age_structure

Age structure
A population pyramid that shows the age of the population by sex in 2000.
0-14 years: 20.2% (male 31,639,127/female 30,305,704)
15–64 years: 67% (male 102,665,043/female 103,129,321)
65 years and over: 12.8% (male 16,901,232/female 22,571,696) (2010 est.)

Because of the way it's broken down we can't say what percentage is under 16, but we can see that it's at least 20.2%. So at least 2/5 of that 50% don't pay taxes because they're to young to work. That lowers the number to 30% at max that "don't pay taxes". Of course, as others here have pointed out, many of those do pay taxes other than federal income tax, and many who don't pay that are un-employed or under-employed because of the current economic conditions.

[spin]

17. However they pay sales tax and in some states state income taxes ...

another conservative talking point that can be quickly debunked.

It's similar to the talking point that says, "We don't want to raise taxes on the rich because they are the job creators." If lower taxes create jobs, with the tax rate we have for the rich, we should have a job for every person who wants to work in this country. It may be true that taxing the wealthy at 92% as it was in the Eisenhower administration might be a factor in job creation. There is, however, something called the law of diminishing return. If we lower the taxes on the rich much more, we will be giving money to the rich in the form of refunds.

Earned Income Tax: Ike's Time vs. Our Time

The highest tax bracket on earned income today is 35%. During Ike's administration, the highest tax bracket was 92% in 1953, and 91% thereafter <1>. Yes, taxes on the Rich were almost three times higher under the Republican Eisenhower compared to our current President, or compared to the Democratic administration of Bill Clinton!

Capital Gains Tax: Ike's Time vs. Our Time

It is considered to be almost the gospel today that capital gains should be taxed at a far lower rate than earned income. Today the maximum capital gains tax rate is a whopping 15% on assets that have been held for at least a year since purchase. This is why the middle class, who are dependant on earned income, effectively pay taxes at a higher rate than do the wealthy.

In Ike's day, capital gains were not treated differently from earned income, so the rich paid 91% tax on capital gains. From 91% to 15% - another reason why it's good to be rich!
http://blueworksbetter.com/EisenhowerFlamingLiberal

[Habibi]

18. Yabbut, they'll only say that

those 50% just made the "wrong choices." Apparently everybody is supposed to be a hedge fund manager in this economy.

[OneGrassRoot]

19. Thanks. You summed it up nicely, so I shall share. :) n/t

[LeftinOH]

20. Current percentage of US citizens aged 17 and under: about 23%; current percentage of

US citizens aged 65 and over: about 20%. In addition, add in the number of incarcerated persons and those citizens who are profoundly disabled (unable to work).

Unless the statistics say that "50 percent of Americans who are of working age do not pay taxes", then I'm not buying into the "50%" crap.

[Llewlladdwr]

22. The 50% claim is based on the number of people who file an Income Tax return.

The claim is that 50% of those filing a Federal Income tax return end up owing 0 income tax. Not that 50% of the total population of the United States isn't paying Income Tax.

Not defending, just explaining.

[RaleighNCDUer]

27. Ending up owing is not the same as not paying.

During the year you have $2000 taken out in income taxes. Your total taxable income calculates your tax to be $1560. You get a $440 refund.

You do not OWE at the end of the year, but you still paid $1560.

[Llewlladdwr]

33. No, the claim is that no income tax is paid at all.

Any monies paid in are refunded in toto.

[RaleighNCDUer]

37. That is the claim, maybe, but what is the reality?

You've already seen even here that there are people who are confused about that. Maybe the child tax credits push up the numbers - I don't know - but without them, you have to be making something less than half the poverty level to pay NO taxes. Do we really have 50% of the working population making less than poverty level wages?

I think there is a lot of playing with numbers in ways that don't reflect reality.

Look at the tax tables at the back of the 1040 - where it says "If your taxable income is less than ____ your tax owed is ___0___."

What is that income level?

[Igel]

47. That is the reality.

The numbers are the IRS's. I suspect that they have an idea what the numbers are. That's sort of their business.

You want a single number. You've done the tax forms. You know it's not that simple.

Does every family making $40k pay the same taxes? Gee, John has 4 kids, a wife, a mortgage, and his employer had him move 2000 miles this year. Pete is single and rents and hasn't moved since he turned 20 and found his first apt.

John has lots of dependents. If he can itemize, he has mortgage interest *and* he can claim moving expenses. His gross income is going to be so low it's amazing he can afford to breathe. *And* he has a $4000 child tax credit. He's paying *nothing*. John has himself, no dependents, so his adjusted gross income isn't going to be all that high so he's going to be paying income tax.

And you want a simple income cutoff amount. First, you do some serious playing with numbers to even get to "taxable income". Then you do some serious playing with the number from the tax table before you get to your tax liability.

And you want a single income cutoff.

[indurancevile]

51. per this winger outfit, the bottom 50% is everyone making under $33K, and they pay 2.7% of

income taxes.

http://ntu.org/tax-basics/who-pays-income-taxes.html

so unless you have a link to the irs that says otherwise, taint so magee.

furthermore, they paid $27 billion in taxes.

furthermore, the bottom 50% made less money (adjusted gross income) than the top 1%: $1,074B v. $1,685B.

http://www.taxfoundation.org/news/show/250.html

[RaleighNCDUer]

40. OK, I'm home and pulled out my 1040 booklet.

"If Form 1040EZ, line 6 is at least $5 but less than $15, and you are single, your tax is $1."

Based on the EZ form (last one I have is '09) the deduction for a single payer was $9,350 - if you made less than that your taxable income was '0'. Income above that, from $9351-$9355, for a taxable income of $1-5, the tax was '0'. A taxable income of $5-15 paid $1 income tax.

IOW, anyone without childcare tax credits who made at least $9356 PAID TAXES. A minimum wage job for a 40 hr week for 52 weeks paid $15,080. Anyone working at minimum wage for 25 hrs/wk would make more than $9356. You can be earning poverty level wages and STILL pay income taxes.

I suspect the '47% of Americans don't pay taxes' is a fucking lie.

[indurancevile]

30. then why do they keep saying "50% pay no tax!"? sounds like a different claim to me.

[Kaleva]

36. They are not being truthful with the figures.

While one can say that about 47% don't pay federal income tax, only about 10% of households pay no net federal taxes.

http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html

[Igel]

48. They're not being careful with the figures.

Push them, some will add "income" to what they say. Others won't realize there's a difference because they didn't pay attention when they heard the info.

[ProgressiveEconomist]

25. Most Americans pay more in payroll taxes than in income taxes. Robert Reich and

Paul Krugman have written about this often.

It is INCREDIBLE that right-wingers have the gall to suggest there is excessive progressivity in the tax system.

Those with six-fugure and higher incomes pay a ZERO marginal FICA tas rate for Social Security, while those below them pay double-digit rates.

And the obfuscatory structure of the Social Security "reform" Reagan and Greenspan put in place in 1983 ensured that FICA became a "slush fund" mostly for direct substitution of payroll tax burdens for income tax burdens on the very wealthy. Reagan used FICA to bring the highest marginal income tax rates down from over 70 percent to 28 percent!

[Kingofalldems]

29. America needs a raise from the GOP allies in Big Business

Then more people will pay taxes.

[Xithras]

31. The number is 46% for 2011, and here's the breakdown.

These numbers are from the Tax Policy Center and are based on 2011 numbers (http://www.taxpolicycenter.org/UploadedPDF/1001547-Why-No-Income-Tax.pdf)

23% pay nothing because they make less than $19,000 a year, and that's generally regarded as the minimum needed to live. Taxing income that low would literally kill people.

10% are elderly. We don't tax Social Security benefits. Again, they don't get much, and taking money from them would take food out of their mouths.

7% pay nothing because of family friendly tax credits. In other words, the standard deduction for their kids wipes out their tax liability, or their EIC is sufficient to cover any deficiency.

6% pay nothing because they have good accountants and financial planners, and can accrue enough deductions and credits to zero out their liabilities. This group includes some of the highest income earners in the country, and some of the countries super-wealthy.

[Motown_Johnny]

41. Bookmarked, thanks for that

[EnlightenedOne]

32. FALSE - LIMBAUGH LIE - HERE ARE THE FACTS:

3 Great Articles:

http://www.nypress.com/article-22306-tax-the-rich_.html

http://wweek.com/portland/article-17350-9_things_the_rich_dont_want_you_to_know_about_taxes.html

http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html

[Atypical Liberal]

39. No, it is true...

No, it is true, even your own articles say so - about 47% of people who file income tax returns don't make enough money to pay income tax.

[EnlightenedOne]

45. Read the articles

You'll see how many of the rich do not pay ANY tax - Donald trump - no taxes for 2 years.

[indurancevile]

53. which is in agreement with the irs data that shows the bottom 50% paid $27 billion in taxes

even though they made only 60% of what the top 1% did.

so if half of filers pay no taxes, some of those non-payers are in the top 50%.

[Atypical Liberal]

56. No doubt.

No doubt. Taxes are for people who don't make enough for accountants to be able to hide the money.

There is still a sizable portion of our income-tax-filing population who just don't make enough money to pay income taxes on.

[indurancevile]

52. But the bottom 50% of filers paid $27 billion in income taxes in 2008. So some of those

non-payers are in the top 50%.

The bottom 50% had less income to share than the top 1%, btw. $1074 billion v. $1685 billion.

http://www.taxfoundation.org/news/show/250.html

I know there are a number of large corporations who not only paid no taxes, they received money.

[B Calm]

34. If not paying taxes makes one rich, maybe they should be looking at the rich. Just

a thought. . .

[B Calm]

35. If not paying taxes makes one rich, maybe they should be looking at the rich. Just

a thought. . .

[hfojvt]

38. this is what I wrote about it

What about the 47%?

Some in the media are trying to make a big deal out of the fact that 47% of Americans do not pay Federal Income Taxes. This is not new. In November of 2002, the Wall Street Journal wrote about the "Lucky Duckies" who were too poor to pay income taxes.

The fact is, that most years, I have been one of them, but I would love to pay income taxes instead of not pay them. Why? Because that would mean I was making more money. The tax rate is not 100%. If I paid $500 in income taxes that would mean I had an extra $5,000 in income that I do not have now. Even after FICA taxes that would leave me over $4,000 ahead.

Let's look at the larger picture though. In 1996, there were 13.2 million taxpayers with income over $10,000 and less than $15,000 and there were another 11.6 million with income less than $20,000 and another 28.5 million with income less than $10,000. Discounting the last group, which is probably mostly teenagers, those making under $20,000 paid $16.9 billion in taxes. Let's assume that the Bush tax cuts eliminated taxes for that group (which they didn't, but for the sake of argument). Those 24.8 million people (or families) would thus save an average of just $681.

Now, look at what actually happened with another group. What Bush called his base - "the haves and the have mores". In 1996, the top 1% paid an average tax rate of 28.9%. By 2006, they only paid an average of 22.79%. In 2006, their total income was $1.79 Trillion! Thus, they saved $109 billion thanks to the Bush tax cuts, an average savings of $80,313.

So, to compare, that's $16.9 billion saved by the poorer people and $109 billion saved by the richer people, and there are 24.8 million of the poor families compared to 1.36 million of the richer families.

Should we be upset because poorer families got $16.9 billion in tax cuts? Or should we be more concerned about the $109 billion going to people with incomes over $388,000? Who is luckier, somebody making $15,000 who got a tax cut of $681 or somebody making $38,000,000 who got a tax cut of over $2,300,000? Hey, doesn't Rush Limbaugh make $38 million a year?

[FormerDittoHead]

42. Sorry for being late - HERE'S the report you need to see!

Boo hoo. The rich pay a higher rate of tax? REALLY?

http://www.ctj.org/taxjusticedigest/archive/2011/04/ctjs_tax_day_report_americas_t.php

Leads to a pdf at: http://www.ctj.org/pdf/taxday2011.pdf

excerpt:

[JoeyT]

54. I never cared how many people don't pay taxes.

What I want to see is what percentage of money goes completely untaxed. I bet that's an interesting number.

[ignatzmouse]

55. The real number is about 14%

Good examination here:

http://www.politicususa.com/en/half-americans-taxes