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The Myth that 50% of Americans Don't Pay Taxes

Latti Ice Ganga Gangsta of PHAET 2012/07/27 14:09:12
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The truth is that 86% of Americans pay taxes.

The fraction of tax units paying no income tax varies widely by filing status and type of unit. About 47 percent of single filers will owe no tax, compared with 38 percent of joint filers and 72 percent of heads of household. More than half of elderly tax units and tax units with children will pay no income tax this year.


http://www.taxpolicycenter.org/UploadedPDF/1001289_who_pays.pdf


The 47% statistic is not all Americans pay no taxes, but single filers who will pay no federal income taxes. According to the Center On Budget and Policy Priorities the real reason why 47%-51% of Americans paid no federal income taxes in 2009 is,

The 51 percent figure is an anomaly that reflects the unique circumstances of 2009, when the recession greatly swelled the number of Americans with low incomes and when temporary tax cuts created by the 2009 Recovery Act — including the “Making Work Pay” tax credit and an exclusion from tax of the first $2,400 in unemployment benefits — were in effect. Together, these developments removed millions of Americans from the federal income tax rolls. Both of these temporary tax measures have since expired.

Let me explain—repeat actually—what this means: About half of taxpayers paid no federal income tax last year. It does not mean they paid no tax at all. Many shelled out Social Security and Medicare payroll taxes. In fact, only 14 percent of Americans didn’t pay either income or payroll taxes. Some paid property taxes and, it is fair to say, just about all of them paid sales taxes of one kind or another. So to say they pay no taxes is flat wrong.

However, this class warfare-like rhetoric plays to a perception that the income tax is a chump tax: Only hard-working folks like us pay it. The welfare queens don’t. The super-rich don’t. It is a powerful emotional argument. It is also flat wrong.

The actual number of Americans who don’t pay any taxes isn’t half, but 14%. This group of non-taxpayers of any kind is largely composed of the elderly and disabled. The people who don’t pay taxes do so because they can’t work.

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  • Tink123 2012/07/27 15:44:09
    I knew
    Tink123
    +4
    If it were up to me, 0% of Americans would pay taxes. It is a marvel to me that so many could voluntarily pay for their own demise.

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  • Paige 2012/07/28 17:18:38
    I knew
    Paige
    +2
    If we buy groceries or clothing then we all pay some kind of tax.
  • Kat ♪ ~BTO-t-BCRA-F~ ♪ 2012/07/28 15:21:49
    I knew
    Kat ♪ ~BTO-t-BCRA-F~ ♪
    +1
    http://www.usdebtclock.org

    US population 314,041,634
    US taxpayers 114,042,757
    US workforce 143,701,563
  • seattleman 2012/07/28 01:40:07
    I knew
    seattleman
    +3
    Good post. I imagine this probably stirred up some emotional replies. Those who create myths don't like it when their myth is exposed. Way to go.
  • Latti I... seattleman 2012/07/28 04:13:09
    Latti Ice Ganga Gangsta of PHAET
    +2
    Thank you S :-)
  • Live Free Or Die 2012/07/28 00:24:53
    I knew
    Live Free Or Die
    +1
    I could understand with the EIC, higher unemployment, and more low wage jobs how the 50% number could account for most income taxes. But because of property taxes, excise taxes, local and state taxes, as well as tax on consumer goods I knew that it was not true that half of America doesn't pay taxes.
  • littlebuffalo55TBA 2012/07/27 21:10:26
    I knew
    littlebuffalo55TBA
    +3
    A quality post with factual data! Kudos!
  • Latti I... littleb... 2012/07/27 22:00:44
  • jackola... littleb... 2012/07/27 23:15:38
    jackolantyrn356
    It is fairly easy in 20005 to get the pwecentage opf Wekfare receoients. It is much harfer today, but one can figure there isn't less thn 50% anymore,
  • oldlady jackola... 2012/07/28 02:46:52
    oldlady
    +2
    Get some rest dear and edit this in the morning ;-)
  • unaff 2012/07/27 17:47:43
    I Didn't Know This
    unaff
    +1
    Opposing viewpoints and figures:

    http://www.politifact.com/tru...

    Exerpts:

    "Figures from the Urban-Brookings Tax Policy Center show that since 2004, the percentage of no-liability tax units has been as low as 39.9 percent in 2007. In fact, 2009 -- the year Cornyn cited -- may prove to be a high point. The center’s projections suggest that the rate could fall to 49.5 percent for tax year 2010 and 46.4 percent in 2011."

    "Actually, to show how out of whack things have gotten, 30 percent of American households actually made money from the tax system by way of refundable tax credits -- the Earned Income Tax Credit, among others. So 51 percent of American households paid no income tax in 2009, but 30 percent actually made money under the current system."
  • Latti I... unaff 2012/07/27 20:06:47 (edited)
    Latti Ice Ganga Gangsta of PHAET
    "The underlying data here are the IRS’s preliminary figures on 2010 individual income taxes, which indeed show that only 85 million federal individual income tax returns included a tax liability. But income tax is not the same thing as federal tax. Payroll tax raises nearly as much money as personal income tax, and is much less progressive—essentially everyone who works pays it, at a flat rate, and the tax is actually capped so that high earners pay a smaller percentage of their income than moderate and low earners. And people who don’t pay income tax pay other federal taxes, such as excise taxes on gasoline and tobacco. They also bear some of the burden of the corporate income tax."

    http://www.forbes.com/sites/j...

    The 47% statistic is not all Americans pay no taxes, but single filers who will pay no federal income taxes. According to the Center On Budget and Policy Priorities the real reason why 47%-51% of Americans paid no federal income taxes in 2009 is,

    The 51 percent figure is an anomaly that reflects the unique circumstances of 2009, when the recession greatly swelled the number of Americans with low incomes and when temporary tax cuts created by the 2009 Recovery Act — including the “Making Work Pay” tax credit and an exclusion from tax of the first $2,400 in unemployment...


    "The underlying data here are the IRS’s preliminary figures on 2010 individual income taxes, which indeed show that only 85 million federal individual income tax returns included a tax liability. But income tax is not the same thing as federal tax. Payroll tax raises nearly as much money as personal income tax, and is much less progressive—essentially everyone who works pays it, at a flat rate, and the tax is actually capped so that high earners pay a smaller percentage of their income than moderate and low earners. And people who don’t pay income tax pay other federal taxes, such as excise taxes on gasoline and tobacco. They also bear some of the burden of the corporate income tax."

    http://www.forbes.com/sites/j...

    The 47% statistic is not all Americans pay no taxes, but single filers who will pay no federal income taxes. According to the Center On Budget and Policy Priorities the real reason why 47%-51% of Americans paid no federal income taxes in 2009 is,

    The 51 percent figure is an anomaly that reflects the unique circumstances of 2009, when the recession greatly swelled the number of Americans with low incomes and when temporary tax cuts created by the 2009 Recovery Act — including the “Making Work Pay” tax credit and an exclusion from tax of the first $2,400 in unemployment benefits — were in effect. Together, these developments removed millions of Americans from the federal income tax rolls. Both of these temporary tax measures have since expired.
    The combination of the recession and the Obama stimulus cut taxes to low and middle income Americans led to fewer Americans owing federal income tax in 2009.

    The Tax Policy Center has tried to correct News Media and the right/left wing media’s misuse of their research.
    (more)
  • Old Salt 2012/07/27 17:47:37
  • Latti I... Old Salt 2012/07/27 17:55:58
    Latti Ice Ganga Gangsta of PHAET
    +3
    The 47% statistic is not all Americans pay no taxes, but single filers who will pay no federal income taxes. According to the Center On Budget and Policy Priorities the real reason why 47%-51% of Americans paid no federal income taxes in 2009 is,

    The 51 percent figure is an anomaly that reflects the unique circumstances of 2009, when the recession greatly swelled the number of Americans with low incomes and when temporary tax cuts created by the 2009 Recovery Act — including the “Making Work Pay” tax credit and an exclusion from tax of the first $2,400 in unemployment benefits — were in effect. Together, these developments removed millions of Americans from the federal income tax rolls. Both of these temporary tax measures have since expired.

    Let me explain—repeat actually—what this means: About half of taxpayers paid no federal income tax last year. It does not mean they paid no tax at all. Many shelled out Social Security and Medicare payroll taxes. In fact, only 14 percent of Americans didn’t pay either income or payroll taxes. Some paid property taxes and, it is fair to say, just about all of them paid sales taxes of one kind or another. So to say they pay no taxes is flat wrong.

    However, this class warfare-like rhetoric plays to a perception that the income tax is a chump ta...

    The 47% statistic is not all Americans pay no taxes, but single filers who will pay no federal income taxes. According to the Center On Budget and Policy Priorities the real reason why 47%-51% of Americans paid no federal income taxes in 2009 is,

    The 51 percent figure is an anomaly that reflects the unique circumstances of 2009, when the recession greatly swelled the number of Americans with low incomes and when temporary tax cuts created by the 2009 Recovery Act — including the “Making Work Pay” tax credit and an exclusion from tax of the first $2,400 in unemployment benefits — were in effect. Together, these developments removed millions of Americans from the federal income tax rolls. Both of these temporary tax measures have since expired.

    Let me explain—repeat actually—what this means: About half of taxpayers paid no federal income tax last year. It does not mean they paid no tax at all. Many shelled out Social Security and Medicare payroll taxes. In fact, only 14 percent of Americans didn’t pay either income or payroll taxes. Some paid property taxes and, it is fair to say, just about all of them paid sales taxes of one kind or another. So to say they pay no taxes is flat wrong.

    However, this class warfare-like rhetoric plays to a perception that the income tax is a chump tax: Only hard-working folks like us pay it. The welfare queens don’t. The super-rich don’t. It is a powerful emotional argument. It is also flat wrong.

    The actual number of Americans who don’t pay any taxes isn’t half, but 14%. This group of non-taxpayers of any kind is largely composed of the elderly and disabled. The people who don’t pay taxes do so because they can’t work.
    (more)
  • sbtbill 2012/07/27 17:17:56
    I knew
    sbtbill
    +1
    The only people who don't know this are a few righties who refuse to watch anything but Fox.
  • Latti I... sbtbill 2012/07/27 17:18:55
    Latti Ice Ganga Gangsta of PHAET
    +5
    Let's not play the blame game.
  • Old Salt Latti I... 2012/07/27 17:43:03
  • oldlady Latti I... 2012/07/28 02:52:17
    oldlady
    +1
    True. Once that starts the original idea of the post gets lost :/
  • Latti I... oldlady 2012/07/28 04:14:06
    Latti Ice Ganga Gangsta of PHAET
    +1
    Yup; how have you been?
  • oldlady Latti I... 2012/07/28 04:22:08
    oldlady
    +1
    I'm good Latrice, thank you for asking dear. How are you?
  • Latti I... oldlady 2012/07/28 16:17:48
    Latti Ice Ganga Gangsta of PHAET
    +1
    I've been good; just dealing with work and school.
  • oldlady Latti I... 2012/07/29 16:28:31
    oldlady
    +1
    You have a lot on your plate, I've been there. Now git' ur butt otta here and go study LOL!
  • Melicious Kiss of PHAET 2012/07/27 16:22:47
    I knew
    Melicious Kiss of PHAET
    +3
    Not to mention, most people pay tax in some way or another, even if it is not income. Sales, gasoline, alcohol and tobacco... you get the point.

    Thank you for the informative post.
  • Latti I... Melicio... 2012/07/27 16:30:23
    Latti Ice Ganga Gangsta of PHAET
    +1
    You're welcome Mel; thanks for stopping by.
  • Flame Fighter 2012/07/27 16:11:54
    I knew
    Flame Fighter
    +1
    It's not that 50% don't pay taxes, it's that almost 50% don't pay INCOME taxes.
  • Latti I... Flame F... 2012/07/27 16:30:04
    Latti Ice Ganga Gangsta of PHAET
    +2
    The 51 percent figure is an anomaly that reflects the unique circumstances of 2009, when the recession greatly swelled the number of Americans with low incomes and when temporary tax cuts created by the 2009 Recovery Act — including the “Making Work Pay” tax credit and an exclusion from tax of the first $2,400 in unemployment benefits — were in effect. Together, these developments removed millions of Americans from the federal income tax rolls. Both of these temporary tax measures have since expired.

    Let me explain—repeat actually—what this means: About half of taxpayers paid no federal income tax last year. It does not mean they paid no tax at all. Many shelled out Social Security and Medicare payroll taxes. In fact, only 14 percent of Americans didn’t pay either income or payroll taxes. Some paid property taxes and, it is fair to say, just about all of them paid sales taxes of one kind or another. So to say they pay no taxes is flat wrong.
  • Flame F... Latti I... 2012/07/27 19:37:15
    Flame Fighter
    Let me explain - repeat actually - what I said. Never stated that almost half didn't pay any taxes. I clearly stated that almost half don't pay income taxes. What those who believe like you fail to understand is that the excuse that many "shelled out SS and Medicare payroll taxes" is no excuse for not paying income taxes since those of us that pay them also pay income taxes to boot.

    The almost half number that don't pay income taxes is not an anomaly nor based on unique circimstances other than having a party in power now that would love it to have more than half not paying income taxes in order to stay in power. What you don't seem to understand is that a family of five with 2 adults and 3 children doesn't pay a dime in income taxes until the family income reaches almost $60,000 based on nothing more than the standard deduction, basic exemptions, and the child tax credit. If they they get other credits, those which the people who actually pay income taxes fund, the amount is even higher. I don't consider that paying a fair share.
  • Latti I... Flame F... 2012/07/27 19:40:44
    Latti Ice Ganga Gangsta of PHAET
    Again; that was in 2009 because of the Recovery Act, before and after 2009 more than half pay income tax. (Re-read)
  • Flame F... Latti I... 2012/07/27 19:43:01 (edited)
    Flame Fighter
    I agree that more than half pay income taxes because 53 that do and 47 that don't is more than half although only slightly more. Below, you stated that almost all pay income taxes and that couldn't be further from the truth.
  • Latti I... Flame F... 2012/07/27 19:45:50
    Latti Ice Ganga Gangsta of PHAET
    It is the truth; the Acts implemented that allowed 47% not to pay "HAS EXPIRED." The majority of that 47% pay income tax and were given a break in 2009 due to the recession.
  • Flame F... Latti I... 2012/07/27 19:47:41 (edited)
    Flame Fighter
    Since 2011 is two years after the time frame you give and information shows that the number not paying dropped to 46% for the most recent tax filing, what I state is closer to the truth than you could ever be. It seems only 1% less didn't get the break this year.
  • Latti I... Flame F... 2012/07/27 19:55:21
  • Latti I... Flame F... 2012/07/27 20:05:37
    Latti Ice Ganga Gangsta of PHAET
    "The underlying data here are the IRS’s preliminary figures on 2010 individual income taxes, which indeed show that only 85 million federal individual income tax returns included a tax liability. But income tax is not the same thing as federal tax. Payroll tax raises nearly as much money as personal income tax, and is much less progressive—essentially everyone who works pays it, at a flat rate, and the tax is actually capped so that high earners pay a smaller percentage of their income than moderate and low earners. And people who don’t pay income tax pay other federal taxes, such as excise taxes on gasoline and tobacco. They also bear some of the burden of the corporate income tax."
  • Flame F... Latti I... 2012/07/27 20:09:47
    Flame Fighter
    I'm not talking about anything except income taxes.

    I know that those who don't pay income taxes pay other federal taxes. What you fail to realize is that those who do pay income taxes also pay the other federal taxes. I also pay excise taxes on gasoline but not on tobacco since I don't smoke. However, using them as a comparision is invalid since no one pays them unless they choose to buy those products.
  • Rebel Yell 2012/07/27 15:54:16
    I knew
    Rebel Yell
    +2
    You are correct. You make this as clear as anyone I have seen, but this will still go right over the heads of many people. Our tax system is one muddled mess, but the fact is for many people there is no tax liability such as the high school kid who works a McJob during the summer months or ,as you point out, the elderly/ disabled. Also, most people are unaware that 40% of the stimulis went to the “Making Work Pay” tax credit .

    There is another person who pays no taxes or very little in taxation. That would be the very wealthy who no longer draw a pay check and keep their great wealth in offshore accounts. Yet they enjoy the infrastructure , airports, postal services, etc. that middle class tax payers support. They enjoy them so much, they believe the middle class should be paying even more.
  • Chris- Demon of the PHAET 2012/07/27 15:50:41
    I Didn't Know This
    Chris- Demon of the PHAET
    +3
    Great post as usual Latrice. :-)
  • Latti I... Chris- ... 2012/07/27 15:55:36
    Latti Ice Ganga Gangsta of PHAET
    +1
    Thank you Chris. ;-)
  • Tink123 2012/07/27 15:44:09
    I knew
    Tink123
    +4
    If it were up to me, 0% of Americans would pay taxes. It is a marvel to me that so many could voluntarily pay for their own demise.
  • Latti I... Tink123 2012/07/27 15:56:33
    Latti Ice Ganga Gangsta of PHAET
    +2
    Amen T; just pointing out how many use this 50% nonsense to try and make people pay more, it's insane.
  • Tink123 Latti I... 2012/07/27 15:57:45
    Tink123
    +4
    Divide and Conquer... long been the name of govt.'s game. For sure.
  • Flame F... Latti I... 2012/07/27 16:12:44
    Flame Fighter
    That almost 50% don't pay INCOME taxes isn't nonsense.

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