Article: 47% Owe No Taxes

[creditcardfree]

47% of Households Owe No Taxes

Most people think they pay too much to Uncle Sam, but for some people it simply is not true.

In 2009, roughly 47% of households, or 71 million, will not owe any federal income tax, according to estimates by the nonpartisan Tax Policy Center.

Some in that group will even get additional money from the government because they qualify for refundable tax breaks.

The ranks of those whose major federal tax burdens net out at zero -- or less -- is on the rise.

[Vytautas]

"Some think it's too progressive. Some don't think it's progressive enough," said Roberton Williams, a senior fellow at the center.

What a priceless quote, so deep and insightful.

I would be interested to see what they define as no tax liability. Throughout my whole college career I made very little (around 10k) but still paid taxes. I had to pay both payroll and income taxes but at the end of the year I would generally not owe anymore than had already been withheld. This makes me think that they tax liability they refer to means that if you someone is defined as having no tax liability they in fact have no extra taxes to pay on April 15 but indeed did pay through their withholdings.

[Caoineag]

Given that the majority of those make less than 30k per household, I am not suprised. That's what happens when only a few make money and you have a progressive tax code. I am more concerned that so much of the population have low paying jobs. And I am one of the few who have to pay in at the end of the year and have had to for most of my working life.

[wincrasher]

If you read the article, it goes on to say that if you include SS taxes that the percentage drops to 24%. It also gives the percentages by income range. But 47% makes a more sensational headline. Makes you wonder what their political motivations are?

Although I think an argument could be made that all citizens should have "skin in the game", the unfortunate reality is that the ranks of the under $30k crowd are growing. It's pretty hard to raise a family on that level of income. Asking them to pay more taxes now is quite alot to ask.

I see in articles alot of information about earned income at the higher end. It's harder to find figures on wealth held. I've seen a figure of the top 1% holding 95% of the wealth - the truly rich are probably more asset heavy than earned income heavy.

The proper strategy would be to figure out how we can move people up into a viable middle class. Increase incomes and the tax problem fixes itself.

[KTP]

Everyone should pay something, even if it is just a buck or two. If you have nearly 50% of the voters paying nothing at all, then who is going to reign in government spending and have fiscal responsibility? Certainly not the people who would benefit from the entitlement programs...

It is kind of like the reason you don't give your dog the whole 25 pound bag of food at once. The mutt is stupid enough to eat everything at one sitting, then barf it all out.

We seem to be heading toward this scenario...

[jIM_Ohio]

Originally Posted by creditcardfree

47% of Households Owe No Taxes

Most people think they pay too much to Uncle Sam, but for some people it simply is not true.

In 2009, roughly 47% of households, or 71 million, will not owe any federal income tax, according to estimates by the nonpartisan Tax Policy Center.

Some in that group will even get additional money from the government because they qualify for refundable tax breaks.

The ranks of those whose major federal tax burdens net out at zero -- or less -- is on the rise.

This explains the economy going to the crapper... 47% of households are relying on the government to provide for them because they are too G!& D@$^ lazy to do anything for themselves.

It means 53% of us are supporting the other 47%. No wonder my taxes are too high, I have to pay my share and someone else's share too.

LOL

[jIM_Ohio]

Originally Posted by wincrasher

If you read the article, it goes on to say that if you include SS taxes that the percentage drops to 24%. It also gives the percentages by income range. But 47% makes a more sensational headline. Makes you wonder what their political motivations are?

Although I think an argument could be made that all citizens should have "skin in the game", the unfortunate reality is that the ranks of the under $30k crowd are growing. It's pretty hard to raise a family on that level of income. Asking them to pay more taxes now is quite alot to ask.

I see in articles alot of information about earned income at the higher end. It's harder to find figures on wealth held. I've seen a figure of the top 1% holding 95% of the wealth - the truly rich are probably more asset heavy than earned income heavy.

The proper strategy would be to figure out how we can move people up into a viable middle class. Increase incomes and the tax problem fixes itself.

First, know this post is tongue and cheek

there are 2 ways to think about it-
the poor need to pay more, so the current level of spending and programs can be sustained
or
the rich need to pay less and the current level of spending and programs needs to be cut proportionally.

I found it interesting your reaction was "the poor cannot afford to pay more" and to that my tongue in cheek response is "that does not mean the rich can afford to pay more either".

[jIM_Ohio]

From the article

Of course, income taxes don't tell the whole story. Workers are also subject to payroll taxes, which support Social Security and Medicare.

When considering federal income taxes in combination with payroll taxes, the percent of households with a net liability of zero or less is estimated to be 24% this year, according to the Tax Policy Center's estimates.

that makes no sense to me- SS increases the taxes I pay, not lower them... so if SS is included, I would think the 47% goes up...

"As the number [of nonpayers] becomes larger, we have to question whether we'll make good decisions about how to allocate resources," economist George Zodrow, a professor at Rice University. "Most people don't understand how skewed the tax distribution is."

I nominate him for any key advisor position he wants...

---
The table was "no tax liability" which appears to be defined as the income tax liability on the federal tax return.

If I have 0 liability on my tax return, but still owe SS taxes, that makes sense... but if this is how you define "no tax liability" realize that what this means is this

24% of people qualify for 100% of the EIC, which is supposed to give the working poor credit for 100% of their SS contributions as a tax refund (if I understand the theory behind the EIC correctly).

the other 23% have 0 tax liability because of deductions and credits, but still have to pay their SS.

[GREENBACK]

I'll go ahead and once again give my libertarian view that their needs to be a flat tax for all but that isn't politically expedient for either major party. The idiosy continues unabated.....disgusting!

[jIM_Ohio]

Originally Posted by GREENBACK

I'll go ahead and once again give my libertarian view that their needs to be a flat tax for all but that isn't politically expedient for either major party. The idiosy continues unabated.....disgusting!

I would not oppose any flat tax if one was proposed, as I believe I would pay less than I do now... I think.

My premise was USA should not be 51% of the people supporting 49% of the people.

Not suggesting you disagreed, but stating my position more clearly

[irmanator]

correct me if I am wrong, but if we have a flat tax do you think it would help influence ppl to vote out the ones that raise taxes. I mean if ppl aren't paying taxes now then they have no motivation to elect politician who want to cut taxes. If they aren't paying taxes and therefor don't care too much about the tax rate, they are more likely to vote for ppl who promise lots of benifits to low income by raising taxes of high income. (I hope my thoughts came out clearly)

[GREENBACK]

Originally Posted by irmanator

correct me if I am wrong, but if we have a flat tax do you think it would help influence ppl to vote out the ones that raise taxes. I mean if ppl aren't paying taxes now then they have no motivation to elect politician who want to cut taxes. If they aren't paying taxes and therefor don't care too much about the tax rate, they are more likely to vote for ppl who promise lots of benifits to low income by raising taxes of high income. (I hope my thoughts came out clearly)

I'm not suggesting that a flat tax is a panacea but it could take the focus of elections away from the current "vote for me and you won't pay anything while my party soaks the 'rich' " way of thinking. I think everyone with an income, no matter how small, should contribute to the country where they reap the benefits.

We might even get a better grade of elected officials to boot because they now would have to run their campaigns on substance instead of fluff.

You can still raise or lower taxes but everyone would have skin in the game. Everyone either suffers or benefits equally.

[Goldy1]

sure wish life was fair

[rebeccae55]

My DH and I were part of the 47% who paid no income tax this year.
I kept asking our accountant if there wasn't a mistake. He said no, he was absolutley sure we didn't owe anything. I had about $6,500 withheld - we got it all back in a refund.

I make $60,000. DH is self-employed. His income washed with his expenses.

We had a several "pre-tax" expenses - my 401K contribution of about $6,000, pre-tax medical ("Flex Account") of $3,500, medical insurance of about $10,000. Then we got deductions for our mortgage interest and charitable contributions, as well as a credit for our college son's tuition.

As much as I like having the money for ourselves, I really think there is something very wrong with this scenario. Granted, we paid Medicare and Social Security. But we didn't pay a nickel for the military that protects us, the roads and other transportation infastructure that gets us from place to place, or any other government agency that benefits my family directly or indirectly.

How is this happening? We are obviously not impoverished and have the capability to pay.

[jrjan1]

I think the majority of these people get paid under the table and this is what they declare, not what they actually earn. People live together without getting married, claim both are head of household, boo hoo about being single parents, etc, all the while, living with their "baby daddy". This also includes the illegals getting paid under the table. Its disgusting!

The only fair way is to totally eliminate income taxes and replace it with sales taxes. That way, the guy that buys the Rolls Royce pays more and the guy that buys the scooter pays less - according to their means. People here on vacation pay, as well as foreign students living here while in college.

The poor would not suffer, because if you can't afford expensive stuff, you don't buy it and you don't pay taxes on it.

[jIM_Ohio]

Originally Posted by rebeccae55

My DH and I were part of the 47% who paid no income tax this year.
I kept asking our accountant if there wasn't a mistake. He said no, he was absolutley sure we didn't owe anything. I had about $6,500 withheld - we got it all back in a refund.

I make $60,000. DH is self-employed. His income washed with his expenses.

We had a several "pre-tax" expenses - my 401K contribution of about $6,000, pre-tax medical ("Flex Account") of $3,500, medical insurance of about $10,000. Then we got deductions for our mortgage interest and charitable contributions, as well as a credit for our college son's tuition.

As much as I like having the money for ourselves, I really think there is something very wrong with this scenario. Granted, we paid Medicare and Social Security. But we didn't pay a nickel for the military that protects us, the roads and other transportation infastructure that gets us from place to place, or any other government agency that benefits my family directly or indirectly.

How is this happening? We are obviously not impoverished and have the capability to pay.

This is common among the middle class. We are almost in this situation too, except our deductions come from paying 40k+ in mortgage interest per year, which more than offsets most of the tax liabilty we have on our 100k+ income (combined).