“But what about the 48% who pay no income tax.”
Of course,if people are not working, you cannot expect them to pay income tax. For those people who are working, they are paying income tax in the form of “payroll taxes”, which are 15.3% from the first dollar earned. There is no exemption. If you only had $1500 of earned income in a year, you will still pay close to 15.3% on that income in payroll taxes (if you are an employee, your employer will pay half of the amount). These are not “income taxes”, but they are income taxes from the federal government in that they are used to pay the government’s bills, be they social security, medicare, or national defense, veteran’s benefits, or the national debt. 40% of the total federal taxes collected in America are in the form of payroll taxes.
The long and short of it is, everyone who has earned income in the US pays income taxes. Now if you are lucky enough to make your living from dividends, interest, capital gains, or rents, to name a few (that is, if you are not actually working) then you have “unearned income” and you do not have to pay the 15.3% payroll taxes that the ordinary working people have to pay.
“The long and short of it is, everyone who has earned income in the US pays income taxes”
Thanks for your accurate post and for reminding people of this fact. Many low income working people are definitely still having taxes withheld from their weekly paychecks...and struggle to pay bills, buy food, gas, etc. Middle class workers are now struggling also because of the high cost of living. Point is as you said...all workers are paying taxes each week.
At the end of tax season, the very low income workers are given a “bonus” in the form of Earned Income Credit. It is not very much unless they have children; in which case they get a nice sum...but usually it is just used for more groceries to feed those children, pay bills, and possibly buy a bigger TV. That is the extent of any “luxury” for many of them.
I’ve worked at tax franchises through the years, and this is how it is. Years ago I thought the EIC was a terrible thing. But now I realize it is often the ONLY bit of financial joy that poorer workers have all year (and yes, many are hard workers, not lazy). Most of the middle class don’t understand this and possibly don’t want to understand.
I have a relative whose tax bill each year is close to a million. He has worked hard through the years to reach that level, and he and his family enjoy their “comforts.” They don’t struggle to pay bills, and I’m very glad they don’t have to.
But after these past years preparing taxes, I no longer begrudge the poor their EIC either.
Whoa!!!
As you yourself seem to realize, FICA taxes are NOT "income taxes". Words mean things. Please don't misrepresent the purpose of FICA taxes -- even if the government chooses to misuse them.
Yes, of course, everybody who is eligible for FICA benefits pays FICA taxes.
However, everybody who benefits from living in this country does NOT pay income taxes. Fact is, only about half do -- and half don't...whether they're actually earning income or not.
And these are the taxes that are supposed to pay for the government's basic operations -- including national defense -- which are of benefit to all. Why is it that only half of us are paying for these things -- and the rest are getting a free ride.
And, of course, that is not to mention the non-FICA entitlements -- food stamps, AFDC, etc. -- which benefit only the few, but are paid for by the enburdened half.
Moreover, you infer that people whose income might consist of "dividends, interest, capital gains, or rents" don't actually "work". You seem to have a very convenient definition of "work". Is it not "work" to manage a business and invest its proceeds intelligently? I mean, after all, people have jobs doing this -- are they not "working"? If one is doing it for one's self, is that not "work"?
And was not the capital invested in such ventures "earned" by honest labor -- i.e. "work"? And, as such, was it not already taxed as income once? And further taxed for FICA purposes. You honestly beleive that the term "unearned income" actually represents income which was, in fact, "unearned"? Nobody worked to achieve it?
Your presence on this board suggests a conservative mindset. Yet, with these populist, class envy opinions, you call yourself a conservative...???