Skip to comments.45% don't owe U.S. income tax. These households will pay NO Federal Income Tax in 2010.
Posted on 04/17/2011 6:08:36 PM PDT by SeekAndFind
The fastest way to make the tax-averse incensed is to tell them that nearly half of U.S. households end up owing no federal income tax when all is said and done.
But like most statistics, it is often misunderstood -- and, in the case of those trying to stir political outrage, misrepresented.
For tax year 2010, roughly 45% of households, or about 69 million, will end up owing nothing in federal income tax, according to estimates by the nonpartisan Tax Policy Center. Some in that group will even end up getting paid money from the federal government.
That does not mean such households end up paying no taxes whatsoever. For instance, those in the group still pay other taxes such as state and local income taxes, as well as property and sales taxes.
And the group doesn't necessarily get off scot-free when it comes to payroll taxes -- which support Social Security and Medicare.
More than two-thirds -- or 49 million of the 69 million households -- pay payroll tax. Of those, 34 million end up paying more in payroll taxes than they get back on their federal return. The other 15 million pay payroll tax but they get enough refundable credits to offset what they paid.
Contrary to what many assume, membership in the group isn't restricted to the poor.
It's true that the vast majority of the 69 million households make less than $50,000 -- with very heavy representation among households making less than $30,000.
But nearly 5 million households in the group make somewhere between $50,000 and more than $1 million.
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,
(Excerpt) Read more at money.cnn.com ...
So how will you get some revenues out of ‘em? Send ‘em to the rendering plants and pet food shelves for government employees to buy, perhaps?
Oh...forgot. Government employees, bigger revenues in, littler taxes out.
It worked. I’m incensed!!!!!!!!!!!!!!!!!!!!!
We do not pay any income taxes, but when we purchas anything we pay taxes on that. Our income is va & ss disabality, both are non taxable.
Didn't happen to me thankfully, but it's been an incredible year ~ never thought my deductible medical costs would be as high as they are! I'd normally done my taxes late in the previous year then make a calculated decision about paying any excess early or late depending on the adantage.
This year I couldn't even read the IRS booklets until late February and there was all sorts of new stuff that I still haven't sorted out in my mind. Following the advice of other blind folks I've asked IRS some specific questions ~ in the meantime going ahead and filing.
So, who are the blind? Well, the deal is that your best vision in your best eye can't be better than 20/200 even corrected ~ and I was there for most of a year. Then, they cut off the medications and my best actually got down to 20/15 ~ and even my worst, under my tightest control, and moving my eye back and forth, I can pass a driving test ~ no doubt you all want me on the road eh!
The Internet lets me blow the words up to where it's better than any lens I can buy ~ and is my prosthetic letting me into the real world beyond the darkened living room.
Looking over stories on the net it looks like there are hundreds of thousands of folks with decent incomes who turn up blind ~ permanently ~ every year ~ and even they don't stop paying taxes ~ this nation taxes blind folks.
The deal seems to be to encourage those with impaired vision to get hired help.
Most interesting ~ not the policy I thought it was, but what else could it be?
I'm pretty sure Hannity is targeting blind people in his rants about people not paying income tax.
He's building up a very large supply of negative kharma. Wouldn't get too close to him just in case he gets some early blowback.
In reality, payroll taxes are exactly the same thing as income taxes; money taken from the the individual that disappears into a black hole, never to be seen again. But to admit this obvious fact, in defense of those paying no income taxes, is to admit that a good portion of their world view is fantasy or fraud.
My S.S. is taxed.
There's nothing equitable about our tax system.
You don't want to be limited to VA and SS disability payments.
You don't want to be blind either, but I bet you forgot that one. This morning you see. This evening you don't. Nobody trains you for that.
if only it were that easy
It’s ok, I paid enough for 3 or so households this year...
Ummm SS disability is taxable by the Feds. Apparently you just don’t have enough income overall to pay taxes.
I don’t buy this argument that people are being simply demonized because “they don’t pay any income taxes”.
So they pay Social Security taxes and a few other things. So do I. And so do many, many other people.
But I pay a boatload of INCOME tax beyond SS and other such things, while they do not. How does that make it anything other than redistribution?
(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)
I can’t believe they mention the foreign tax credits as if it’s a loophole! For the record, I don’t get any of my income that way. However, the US is one of the few countries that taxes worldwide income. If a citizen from another country works in the US, that person only pays US taxes. If an American citizen works overseas, they get taxed by the IRS anyway, net of the taxes they paid overseas (there might be a certain amount shielded from income as well). If they change that “loophole”, and Americans can’t get away from the taxman even if they leave the country, these citizens will have to make a decision as to whether the US citizenship is even worth it. The IRS would then get nothing.
Sounds to me like the W4s were properly filed.
A big problem. These people are not overtaxed, although they may think so.
Democrats/Socialists will always be able to go to these voters and say: “Republican’s plan will make you pay more” when talking about proposed budget cuts like Medicare. This group will always (generally) see the wisdom of ‘tax increases on the rich’.
And they are still 'entitled' to Medicare and Social Security.
And, by the way, my disagreement was not with you personally, since I do think it is fair to keep in mind that people who don’t pay any Federal Income Tax do pay sales tax and other such taxes.
The problem is, income tax is obviously the major chunk of money going to the federal government. Everyone needs to pay, because as many people have pointed out, when people are free of that burden of having to pay anything, the exercise of voting for people who will increase taxes on the “other” people to pay for benefits “they” get takes on a completely different dynamic, even IF those people DO pay some kind of taxes.
So 45% have no skin in the game.
It's true that the vast majority of the 69 million households make less than $50,000 -- with very heavy representation among households making less than $30,000. But nearly 5 million households in the group make somewhere between $50,000 and more than $1 million.So, IOW, flattening the income tax and dumping most deductions/loopholes, and setting the value of a personal exemption to, say, $30,000, would be (in the parlance of the Demwits) revenue-neutral.
I have seen and heard these arguments before. They’re ludicrous.
Saying, “Hey — the 47% non-taxpaying statistic is both mean-spirited and misleading. Those people pay sales tax.”
But we were talking about income tax.
Their argument is a bit like saying, “Most people don’t buy newspapers any more; but they do use toilet paper.”
You don't want to be blind either, but I bet you forgot that one. This morning you see. This evening you don't. Nobody trains you for that
I wasn't begrudging anybody their disability checks. Why would you think that? I made a simple statement that I pay federal income tax on my S.S. checks, no more, no less.
I don't want to be blind either but I forgot that one? I don't even know what that means - Of course I don't want to be blind.
You sure got a lot out of my reply that I didn't put in.
Make EVERYONE pay some income tax.
We should have a basement level of income tax if we have an income tax at all. 5% so they can do their patriotic duty.
Even better, a "sales tax" AND no income tax.
Everyone must pay if anyone does.
Otherwise we will eventually have chaos and war.
That number would be reduced considerably by passing the Fair Tax Act(HR25/S13). The Fair Tax will replace all federal income taxes with a national sales tax and abolish the IRS!
Ditto, my tax liability covers all the illegal aliens’ needs in my town.
I agree. Federal income taxes are the largest source of income for the federal government. Payroll taxes were setup to fund specific programs in which taxes have some relationship to benefits. The situation is far worse than the statistic about 45% pay no federal income taxes. At least half of this group pays negative income taxes (refundable tax credits). The IRS has become a major welfare agency. Even worse, fraud is rampant in refundable tax credits especially among illegal aliens.
Republicans should call for an elimination of refunable tax credits. Every able individual with at least a small level of income should pay federal income taxes.
“In reality, payroll taxes are exactly the same thing as income taxes; money taken from the the individual that disappears into a black hole, never to be seen again.”
I disagree. As of last year, both SS and Medicare outlays exceed the amount of payroll taxes paid in. Yes, IN THE PAST payroll taxes were diverted to pay for other things and a meaningless paper “credit” placed in the SS “lock-box” to tell everyone that Uncle Sam owed the Trust Fund money. But now that is no longer true. Every penny of payroll taxes goes to its dedicated purpose: to pay for Medicare or SS.
Thus, anyone paying EXCLUSIVELY payroll taxes and no income taxes is, for the most part (ignoring the trivial amounts of federal taxes collected through excise taxes on cigarettes, liquor etc.) making NO contribution to the costs of national defense, the criminal justice system or other legitimate government activities. Consequently, everyone else is paying more than their “fair share” for these activities.
Claiming that payroll taxes just get mingled with income taxes in one big pot I believe obscures this important point.
RE: abolish the IRS!
MUSIC TO MY EARS!
Unfortunately, too many people still consider them absolutely essential for our government to work.
Modify the AMT so that everyone has to pay at least the minimum tax rate.
I wonder how many of these “households” are dependents filing their own taxes on little part-time jobs they hold while students.
We should pass a law that everyone that gets to vote must pay a minimum amount of tax.
When our country was first created, only land owners had the right to vote - they all had a stake in the game. We now allow almost anyone to vote - they don’t even need to know how to read or write. What do we expect???
They must have a (to be determined) number of years on record in which they paid taxes.
Obviously, there are many retired seniors/veterans, etc. who are so strapped they no longer pay taxes, but have contributed above and beyond the call in their primes.
They've certainly earned the right to cast a ballot.
The reality is that the payroll tax is really an income tax.
Once you exclude more than 50% from paying income tax and use the EITC to subsidize some, the majority will have no problem in increasing the taxes on the "wealthy" and voting for more benefits for themselves. It is called redistribution of wealth or as Obama and his Marxist friends like to say, social justice.
The SS Trust Fund contains about $2.2 trillion in non-market, interest bearing T-bills. So although SS is running in the red now and will go permanently in the red in 2016, trillions of SS dollars have already been spent on “other things.”
Or at the very least you should not be able to get back more than you paid in. 0=0
Claiming that payroll taxes just get mingled with income taxes in one big pot I believe obscures this important point
Since you acknowledge that payroll taxes have been diverted into the general budget and replaced with worthless notes, how does the fact that their is no longer a surplus to steal change anything? Money is fungible, and accounting gimmicks don't change that. The people paying exclusively payroll taxes to support current recipients, that are destined to get stiffed when their time comes to collect, are still contributing. Are they not?
Unlike you, I believe that any attempts to draw lines and distinctions between SS and the rest of the federal budget just cloud the issue, rather than clarify it. It is all the federal government taking significant portions of everybody's income to support an ever metastasizing regime of transfer payments. It doesn't matter if the money comes from the income taxes of Bill Gates or the Payroll taxes of low earners. And it doesn't matter if the payments are going to retirees, to food stamps, or General Electric to build wind turbines. It's all the same.
We should have a basement level of income tax if we have an income tax at all. 5% so they can do their patriotic duty.
Even better, a "sales tax" AND no income tax.
Everyone must pay if anyone does. Amen FRiend. Everyone should have skin in the game. Or no vote.
When the dollar finishes crashing, I think it has already started, the lower incomes will be hardest hit. $50,000/yr will be what wal-mart greeters get when milk is $10.50 a gal, gas $7.00/gal.
I can not stress that enough.
Read this guy's thesis, and decide if it's pap:
I won't post it here, because this guy's absolutism is too strong for this place.
But I am not yet convinced that he's not onto something.
Social Security is taxed.
“The people paying exclusively payroll taxes to support current recipients, that are destined to get stiffed when their time comes to collect, are still contributing. Are they not?”
I think you’ve confused 2 issues. I concur that current payroll taxpayers may not get what they were promised from SS and Medicare. But that’s completely irrelevant in determining whether they make a contribution to national defense. It doesn’t change the fact that every penny they DO pay only goes to supporting SS and Medicare.
Imagine, for a moment, that we didn’t face a demographic crisis and that the number of workers to elderly remained stable decade after decade. In that instance, every generation could receive the same benefits as their parents and grandparents. In that case, current payroll taxpayers wouldn’t be shafted once it came time to collect benefits. But so long as program payouts exceed payroll taxes by even $1, it means that all the revenue being raised is going exclusively to fund SS and Medicare. There is no “surplus” to be raided to bankroll national defense. So whatever amount we spend on national defense is implicitly being borne only by the subset of the population paying income taxes.
Think of it this way. Jack and Jill are married, but Jack has a legal obligation to pay X dollars a month in child support to his ex-wife. If Jack’s net pay after taxes is less than X, I hope you can concur Jack is making NO contribution towards that couple’s mortgage, food expenses or any other component of the family budget even if all of these items is being bankrolled by the couple’s joint income. I hope you can see why Jill might not regard that arrangement as particularly fair.
The total is approx 68 million.
Only 45.4% of the U.S. population had jobs in 2010.
Population is approx. 300 million.
45.4 % is 136,200 and there's only 68 million tax filers ?
and unemployment is only 8.8 % ?
I'm sure I'm missing something....
300 million includes a lot of children too. Figure somewhere around 150 million working (and therefore allegedly tax-paying) adults.
Does that mean that, after they subtract the amount withheld for income tax, they "end up owing nothing?"
Or does it mean that their income tax is actually zero, and they get back all the money withheld in their refunds?
More than two-thirds -- or 49 million of the 69 million households -- pay payroll tax. Of those, 34 million end up paying more in payroll taxes than they get back on their federal return. The other 15 million pay payroll tax but they get enough refundable credits to offset what they paid. (Get a 'receipt' for your taxes)
Sounds like the title is misleading. If they withheld $5000 from your pay and you got $3000 in a refund, you still paid $2000 tax. Sounds like about half of the 45% actually did pay some income tax.