47% of American Households Don't Pay Income Tax

[JPhillips]

Originally Posted by SteveMax58

I don't think the majority of "average" people have as much of a problem with people who pay no income tax, as they do with the (deliberate imo) obfuscation of tax revenues & and the subsequent methods the government uses to collect them.

Couple that with the fact that collectively we have to then pay people to collect & enforce laws of these taxes...all which adds no efficiency or increased quality of life for the country(with the exception of those collecting/enforcing or receiving)...and the view is that it is not much different than paying people to dig holes just to fill them back in.

Then...add in the fact that these same entities that decide such things for the entire country also seem to believe that the same recklessness that got us to the brink of fiscal armageddon also continue to do the same thing with no end in sight...and I'm not sure why more people dont see this as something to stop playing partisan BS talking point shootout and actually begin "paying as you go". So, if you want to increase the deficit THIS year, you must raise tax revenue THIS year to justify.

I'm with you. I'd like to see the tax code radically simplified, but still with progressive rates. I think it's a mistake to only sunset part of the Bush tax cuts. While I think a balanced budget amendment is foolish and unworkable, I'd like Congress to set a goal of a balanced budget within five years. I'd also be willing to make a deal on SS and cut the military budget to help get to a balanced budget.

But, I'm not making any of these decisions, so the best I can do is make occasionally valid points and smart ass remarks.

[DaddyTorgo]

military budget needs to be cut in order to get to a balanced budget. otherwise you're slicing everything else down to the bone.

[Mizzou B-ball fan]

That was a PAINFUL check I cut this morning.

[JonInMiddleGA]

Originally Posted by path12

Economic Scene - Yes, 47% of Households Owe No Taxes. Look Closer. - NYTimes.com

Digs into the original meme a little bit, I thought it was interesting.

Decent enough read I suppose but a couple of things that catch my eye here

-- But the modifiers here — federal and income — are important. -- I believe that pretty much every mainstream use of the phrase (i.e. when this figured gets referenced as they mention in the article) has those understood as a given. I simply can't recall ever having a conversation about this with anyone who doesn't get the distinction that's being made. I'm sure we can go find a video on the interwebz somewhere with someone who doesn't but those people are akin to the free gas chick, amusing but not necessarily relevant in the big picture.

-- The other thing is the overwhelming assumption in the article that progressive taxation (in the income tax sense) is some naturally occurring phenomena that cannot be eliminated. In reality it's a man-made construct that could be eliminated with only the will to do so. Everyone paying the same share is not only possible, it's the desired outcome for many of those who noted this 47% figure, and I'm confident that I'm not alone in feeling it's not only the desired option but ultimately the only acceptable option.

[gstelmack]

Originally Posted by SteveMax58

I don't think the majority of "average" people have as much of a problem with people who pay no income tax, as they do with the (deliberate imo) obfuscation of tax revenues & and the subsequent methods the government uses to collect them.

Well, given that the "average" person is apparently not paying any, of course they have no issue.

I have issues both with people who don't contribute but expect benefits and with the convoluted tax code.

I'm really coming around to the national sales tax (or Fair Tax or whatever folks want to call it) and doing away with the income tax entirely. Exempt criticals (like FRESH food and housing) maybe, but that's it.

Or institute Heinlein's Citizens / Taxpayers society.

[JPhillips]

Originally Posted by JonInMiddleGA

Decent enough read I suppose but a couple of things that catch my eye here

-- But the modifiers here — federal and income — are important. -- I believe that pretty much every mainstream use of the phrase (i.e. when this figured gets referenced as they mention in the article) has those understood as a given. I simply can't recall ever having a conversation about this with anyone who doesn't get the distinction that's being made. I'm sure we can go find a video on the interwebz somewhere with someone who doesn't but those people are akin to the free gas chick, amusing but not necessarily relevant in the big picture.

-- The other thing is the overwhelming assumption in the article that progressive taxation (in the income tax sense) is some naturally occurring phenomena that cannot be eliminated. In reality it's a man-made construct that could be eliminated with only the will to do so. Everyone paying the same share is not only possible, it's the desired outcome for many of those who noted this 47% figure, and I'm confident that I'm not alone in feeling it's not only the desired option but ultimately the only acceptable option.

Will you also apply a flat percentage rate to every other tax and fee or will regressive taxation still be permitted?

[JPhillips]

Originally Posted by gstelmack

Well, given that the "average" person is apparently not paying any, of course they have no issue.

I have issues both with people who don't contribute but expect benefits and with the convoluted tax code.

I'm really coming around to the national sales tax (or Fair Tax or whatever folks want to call it) and doing away with the income tax entirely. Exempt criticals (like FRESH food and housing) maybe, but that's it.

Or institute Heinlein's Citizens / Taxpayers society.

Almost everyone contributes to the federal budget. Even if you don't want to count FICA taxes that go to SS and Medicare/caid and things like gas taxes, since the FICA fix in the 80s a portion of those taxes have been diverted into the general fund meaning everyone that pays FICA taxes is paying a de facto income tax.

[Cringer]

The government will once again owe us thousands of dollars in taxes we didn't pay. So, I was thinking those of you who owe more money today then what you have already paid out, feel free to send those checks my way. I will explain it all to the IRS for you.

[JonInMiddleGA]

Originally Posted by JPhillips

Will you also apply a flat percentage rate to every other tax and fee or will regressive taxation still be permitted?

I think I'd have to go item by item to give you an worthy reasoned answer, and I simply don't have anywhere near every relevant figure at hand.

Philosophically I could say "every" off the cuff but then I quickly think of the reasonable cap limits on something like FICA and see where it almost has to be answered case by case.

So let's unfuck the largest single slice, which are combined federal & state income taxes, and then we'll go from there.

[JonInMiddleGA]

Originally Posted by JPhillips

since the FICA fix in the 80s a portion of those taxes have been diverted into the general fund meaning everyone that pays FICA taxes is paying a de facto income tax.

And that's something that needs to be undone pdq. I may not believe that SS will even exist by the time I reach that age (if I even get there) but I've always been firm on the notion that what goes into that fund should stay in that fund. Period. End of sentence.

And I don't really give a damn what (X) someone has after their name is supporting or opposing that idea, the misappropriation of those funds should never have occurred & should be stopped with all due haste.

[JPhillips]

Originally Posted by JonInMiddleGA

I think I'd have to go item by item to give you an worthy reasoned answer, and I simply don't have anywhere near every relevant figure at hand.

Philosophically I could say "every" off the cuff but then I quickly think of the reasonable cap limits on something like FICA and see where it almost has to be answered case by case.

So let's unfuck the largest single slice, which are combined federal & state income taxes, and then we'll go from there.

But if you make federal and state income taxes flat without touching anything else that will make the overall tax burden significantly regressive. If you look at total tax burden we're not too far off from flat right now.

[JPhillips]

Originally Posted by JonInMiddleGA

And that's something that needs to be undone pdq. I may not believe that SS will even exist by the time I reach that age (if I even get there) but I've always been firm on the notion that what goes into that fund should stay in that fund. Period. End of sentence.

And I don't really give a damn what (X) someone has after their name is supporting or opposing that idea, the misappropriation of those funds should never have occurred & should be stopped with all due haste.

+1 Al Gore got a lot of shit for his lock box statements, but he was right.

[gstelmack]

Originally Posted by JPhillips

Almost everyone contributes to the federal budget. Even if you don't want to count FICA taxes that go to SS and Medicare/caid and things like gas taxes, since the FICA fix in the 80s a portion of those taxes have been diverted into the general fund meaning everyone that pays FICA taxes is paying a de facto income tax.

I think this is a good description: Why more Americans pay no income tax - CNN.com

Originally Posted by article

The real issue is that millions of Americans no longer have any skin in the game and are becoming inoculated from the basic cost of government. To them, government seems free and politicians can easily convince them to support more and more spending because someone else is going to pay the tab. This trend deserves a broader national discussion than either party in Washington seems willing to engage in.

Part of it here is perception: many of those taxes are "hidden". But the other part is so many folks getting much of the money spent on these other taxes back that they really do have a net zero, at least where the federal government is concerned, or in many cases a positive cash flow.

[flere-imsaho]

Originally Posted by gstelmack

I'm really coming around to the national sales tax (or Fair Tax or whatever folks want to call it) and doing away with the income tax entirely. Exempt criticals (like FRESH food and housing) maybe, but that's it.

Interesting. I wouldn't have pegged you for a supporter of VAT, but it would be a way to greatly simplify the tax code.

[flere-imsaho]

dola,

NPR's All Things Considered did an interview with the guy who authored the original study yesterday: Who Pays Taxes? Not As Many As You Think : NPR

[Doug5984]

Originally Posted by gstelmack

Well, given that the "average" person is apparently not paying any, of course they have no issue.

I have issues both with people who don't contribute but expect benefits and with the convoluted tax code.

I'm really coming around to the national sales tax (or Fair Tax or whatever folks want to call it) and doing away with the income tax entirely. Exempt criticals (like FRESH food and housing) maybe, but that's it.

Or institute Heinlein's Citizens / Taxpayers society.

I would most likely lose my job if we went to a national sales tax / fair tax- and I would be completely for that.

[Farrah Whitworth-Rahn]

Originally Posted by Mizzou B-ball fan

That was a PAINFUL check I cut this morning.

+1

Today...If anyone dares tell me I need to pay more because I'm not paying my fair share, I cannot be held responsible for my actions.

[SteveMax58]

Originally Posted by gstelmack

Part of it here is perception: many of those taxes are "hidden". But the other part is so many folks getting much of the money spent on these other taxes back that they really do have a net zero, at least where the federal government is concerned, or in many cases a positive cash flow.

Agree with this completely. There cannot be a zero liability or income incentive for people to achieve less.

My comment on the average person not being as concerned is more centered on...we've got so much other hidden tax to weed through that I think this type of stat becomes the populist way to get the middle class to attack the poor without solving the initial problem which is (primarily)2-fold imo.

(1) The notion that government should judge & micromanage our behaviors "for our own good" and...
(2) The notion that the 47% of Americans who are deemed "poor enough" in our current system to not pay anything would be "poor enough" if the government was not (to the extent it does today) embedding, burdening, and wasting tax revenue by penalizing high achievers (or the benefactors of high achievement).

I'm not arguing for a zero tax, anarchistic state. Or "pure" capitalism which means I need to hire my own police protection. But the federal government should also not be the only alternative to this. This is why everything from Healthcare Reform to highways to welfare should be handled on state/county/municipality basis. If these 3 levels want to pool their localities for savings and the like, so be it. But at least there is real choice & consequences to poor leadership. And I cant stand the argument of deficit spending being better than balancing a budget. If you've structured your budget properly...you need not deficit spend.

[JPhillips]

They aren't paying zero. Every income earner is paying 12.4% in FICA taxes. Almost everyone pays federal excise taxes(primarily on gasoline). Many pay dividend and interest taxes. Very few people come out at zero or better for total federal tax burden.

And if you add in state and local taxes, which can often be regressive, the total tax burden is very close to flat for @90% of the population.

[SteveMax58]

Originally Posted by JPhillips

They aren't paying zero. Every income earner is paying 12.4% in FICA taxes. Almost everyone pays federal excise taxes(primarily on gasoline). Many pay dividend and interest taxes. Very few people come out at zero or better for total federal tax burden.

And if you add in state and local taxes, which can often be regressive, the total tax burden is very close to flat for @90% of the population.

That's where I'm going though. They are paying taxes in indirect ways that are done "for everybody's benefit", in theory. The problem I have is that I dont like the slippery slope of a federal government deciding what is best for everybody on societal micro-issues. Macro issues make sense but to the extent possible...federal regulation/law should always be the last resort in solving a problem.

I just don't think this viewpoint is being represented in today's politicians. Some do...but for the most part we have conservatives who hate regulation unless its "their" regulation...which means outlawing abortion, or actually debating the merits of allowing gays in the military, etc. Then we have liberals who think it prudent to have a massive government that can help the "stupid" people with their lives because of course, they are stupid and should not be able to make stupid choices whether they care or not. I just find both of those views to be unacceptable and pointless.

[SportsDino]

I've plastered this rant all over the place before, but since its a tax thread I might as well put it all in one place.

The 'Fair' or 'Flat' tax (everyone pays 20%). Not so fair, it might actually bump the mega investors up 1-2 points, but depending on income distribution it means all those paying 0% are now paying 20%, which will be terrible on individual margins and hence a consumer spending crash (no no given our economy's dependence on it, we already are feeling the wrath of it in the existing crisis). If you eliminate ALL taxes, such as payroll, most general fees, and so on and replace that with the 'Fair' tax... then the target rate would probably be 25%, making mega-investors rates go about about 7 points, middle class would probably see an average 10-15 point drop, and the poor about a 10-15 point jump (but better than the 20 point jump if you don't eliminate the random taxes).

Even under that scenario, which is actually getting closer to a real definition of 'fair', it is not very progressive, and it still impacts individual marginal spending. Think of a person's margin as their liquidity essentially, as a person's budget approaches 0 their flexibility to handling any sort of stress in the system reduces dramatically. This is the basic concept of progressive tax schemes (which I agree with, as long as they are not oppressive)... a mega-investor can handle more burden and still maintain liquidity, so its 'safer' to raise taxes on them.

What I see as a problem of all these statistics is that the tax code is overly gimmicky. We should just have a flat progressive bracket system, and start eliminating all of these weird deductions. Make people pay a smaller base rate at lower brackets, rather than subsidizing specific behaviors. Things like the housing credit basically subsidize markets that probably don't need a subsidy (housing probably just pocketed a bunch of that money by raising the prices 8K or more to compensate). The deductions for certain types of debts over others, or fitting various attributes can be done better by simply not having people pay that much to begin with. Or targetted spending programs for the effected groups... such as a scholarship program instead of student loan deductions.

The complexity of the tax code is just leading to higher base rates, more paperwork, and a 'lotto' effect where some years you pay less in taxes and others you get hit hard. It also leads to market inefficiencies that are blowing up the prices of things we are buying (like housing or cars), or encouraging sub-optimal behaviors.

Edit:
A mega investor is someone like me, who pays mostly investment related taxes instead of income taxes, causing their overall tax burden to approach 15-20%.

[DaddyTorgo]

yeah - the complexity of the tax code is the problem, not the tax rates themselves...i agree with you Dino.

[Blackadar]

Originally Posted by molson

he argument in that article is just weird. The real spirit of the "tea party" movement (which has sadly tainted a smaller but signficant movement during the '08 election), is federal spending/influence, not oppressive taxes. I'm sure most of the sane tea party-esque people would be fine with a moderate flat tax that would require half of them to chip in more. I don't think (the sane ones) are arguing that more people should have zero tax liability, as that articles suggests.

No, the real spirit of the tea party is that "OMG, a black man is President!!!"

[molson]

Originally Posted by Blackadar

No, the real spirit of the tea party is that "OMG, a black man is President!!!"

And now that spirit is intertwined with any call for more efficient government and accountability of public spending. Brilliant. (I say brilliant sarcastically in the context of the tea partiers, and legitimately in terms of the democrats who love that all their opposition can now even more easily be grouped together with the nutjobs).

[Blackadar]

Originally Posted by molson

And now that spirit is intertwined with any call for more efficient government and accountability of public spending. Brilliant. (I say brilliant sarcastically in the context of the tea partiers, and legitimately in terms of the democrats who love that all their opposition can now even more easily be grouped together with the nutjobs).

If it was about spending/deficits/big government, they would have been protesting years ago.

And as if I needed any reinforcement about teabaggers:

http://www.salon.com/news/tea_partie...e_tea_partiers

This point is reinforced by a study released last week by the University of Washington, which discovered that people who think that “the U.S. government has done too much to support blacks” were 36 percent more likely to support the Tea Party than those who didn’t think so. Among whites who approve of the Tea Party, only 35 percent said they believe blacks are hard-working, only 45 percent believe blacks are intelligent, and just 41 percent believe that they’re trustworthy. (Curiously, the UW poll was only conducted in seven battleground states.)

[molson]

Originally Posted by Blackadar

If it was about spending/deficits/big government, they would have been protesting years ago.

Not everybody is either a Democrat or Republican. Many were speaking out about this for years. Check out Ron Paul's contribution $ from individuals (as opposed to the normal corporate donations obtained by Republicans normally) in the '08 election prior to the tea party even getting started.

And I imagine some of these tea partiers weren't even interested in politics years ago. They're like the equivalent of the trendy extreme Bush hatred/extreme Obama obsession group that wasn't involved or interested in politics before or since. It was just the flavor of the month to make a jackass of yourself in that particular way, just like this is.

[Blackadar]

Originally Posted by molson

Not everybody is either a Democrat or Republican. Many were speaking out about this for years. Check out Ron Paul's contribution $ from individuals in the '08 election prior to the tea party even getting started.

And I imagine some of these tea partiers weren't even interested in politics years ago. They're like the equivalent of the trendy extreme Bush hatred/extreme Obama obsession group that wasn't involved or interested in politics before or since.

The 18 percent of the nation that identifies with the Tea Party movement tends to be white, male, older than 45 and Republican.

75% are over 45 and almost all of them are more educated than the public at large. 89% are white (1% black, 1% Asian, 3% Hispanic, 6% "other".) 56% say they make over 50k a year. 12% say they make over 250k a year.

That's not a typical non-political demographic. And read what the survey said about teabagger's views of blacks. This is a bunch of angry white people afraid the black man is coming to get them.

But I suppose if we want to discuss the motivations and demographics of teabaggers, we should start a new thread.

[DaddyTorgo]

i highly doubt 12% of tea-partiers make over 250k a year.

just saying...

[SteveMax58]

Originally Posted by DaddyTorgo

i highly doubt 12% of tea-partiers make over 250k a year.

just saying...

You doubt myspace income identifiers?

[DaddyTorgo]

Originally Posted by SteveMax58

You doubt myspace income identifiers?

[JonInMiddleGA]

Originally Posted by Blackadar

That's not a typical non-political demographic. And read what the survey said about teabagger's views of blacks. This is a bunch of angry white people afraid the black man is coming to get them.

Lemme see here "Among whites who approve of the Tea Party, only 35 percent said they believe blacks are hard-working, only 45 percent believe blacks are intelligent, and just 41 percent believe that they’re trustworthy. "

Depending upon the places where the survey was conducted (because the study was limited to certain state IIRC) those percentages might not vary by a great amount if you surveyed non-black non- tea partiers.

Often white attitudes about blacks* have an inverse relationship with the percentage of black population; i.e. the higher the percentage the lower the general confidence in them.

*for lack of a better way to quickly lump questions like this together

[JonInMiddleGA]

Incidentally, anybody take a look at the Newsweek op-ed piece on this same data? In it there's a link to the actual table of results, broken down by responses from whites who "Strongly APPROVE" of the tea party & those who "Strongly DISAPPROVE" of the tea party.

The gaps on the answers are interesting, at no point does the affirmative response on any of the generalizations about blacks ever reach 60% even among the "strongly DISapprove" whites.

edit to add: I also love how alleged "full table of results" only shows white responses. It seems as though inquiring minds would at least be curious what the answers from non-white groups were to those same questions, especially from non-Latinos about Latinos, non-blacks about blacks, etc. (i.e. not just grouping them as white/non-white but rather as same group/different group).

[sterlingice]

Originally Posted by Farrah Whitworth-Rahn

+1

Today...If anyone dares tell me I need to pay more because I'm not paying my fair share, I cannot be held responsible for my actions.

Out of curiousity, why are you cutting such a huge check today of all days instead of just paying them the whole year? My wife is considered a home business since she's now a contractor and she has to cut a pretty substantial check 4 times a year and then we get a bit of money back at this time of year (which, well, we put towards next year's taxes so we don't have to cut a check next quarter).

SI

[sterlingice]

Originally Posted by JonInMiddleGA

Incidentally, anybody take a look at the Newsweek op-ed piece on this same data? In it there's a link to the actual table of results, broken down by responses from whites who "Strongly APPROVE" of the tea party & those who "Strongly DISAPPROVE" of the tea party.

The gaps on the answers are interesting, at no point does the affirmative response on any of the generalizations about blacks ever reach 60% even among the "strongly DISapprove" whites.

edit to add: I also love how alleged "full table of results" only shows white responses. It seems as though inquiring minds would at least be curious what the answers from non-white groups were to those same questions, especially from non-Latinos about Latinos, non-blacks about blacks, etc. (i.e. not just grouping them as white/non-white but rather as same group/different group).

Fivethirtyeight.com has been picking about the numbers a bit over the last week but it still feels only skin deep. Here's the articles, tho

FiveThirtyEight: Politics Done Right: New Data on Tea Party Sympathizers
FiveThirtyEight: Politics Done Right: You Asked For It, You Got It

SI

[JPhillips]

It's not just the poor. Bruce Bartlett found some other freeloaders.

There are 78,000 tax filers with incomes of $211,000 to $533,000 who will pay no federal income taxes this year. Even more amazingly, there are 24,000 households with incomes of $533,000 to $2.2 million with zero income tax liability, and 3,000 tax filers with incomes above $2.2 million with the same federal income tax liability as most of those with incomes barely above the poverty level.

But of course we can't even consider removing some of these loopholes or we'll destroy American businesses.

[panerd]

Originally Posted by JPhillips

It's not just the poor. Bruce Bartlett found some other freeloaders.



But of course we can't even consider removing some of these loopholes or we'll destroy American businesses.

Agree. Of course the "destroying businesses with higher taxes" does sound like the right wing version of raise the debt ceiling to spend more money or the world will cease to exist tomorrow.

[JPhillips]

Of course even right wing economists are saying that. Check out Mark Zandi's thoughts today.

[panerd]

Originally Posted by JPhillips

Of course even right wing economists are saying that. Check out Mark Zandi's thoughts today.

Don't know why you think I am part of the D/R game that everyone likes to engage in. Zandi is just as big a piece of shit (spend spend spend!) as the rest of the guys.

The Financial Tube - Peter Schiff on CNBC, 10.14

[Pumpy Tudors]

Originally Posted by Pumpy Tudors

I think half the people in this thread are arguing that the sky is blue, and the other half are arguing that the Blackhawks are going to win the Stanley Cup.

I paid taxes, and I only made $39.95 last year plus shipping.

No comment on the political stuff, but I posted the above last year. The Blackhawks ended up winning the Stanley Cup. So I'm gonna agree with that half.

[GrantDawg]

Originally Posted by Pumpy Tudors

No comment on the political stuff, but I posted the above last year. The Blackhawks ended up winning the Stanley Cup. So I'm gonna agree with that half.

Stop it. If Necro-ing a thread gets you a Pumpy classic post, we are going to get a lot more thread Necro-ing.

[Pumpy Tudors]

Originally Posted by GrantDawg

Stop it. If Necro-ing a thread gets you a Pumpy classic post, we are going to get a lot more thread Necro-ing.