Yes, 47% of Households Owe No Income Taxes. But Look Closer. NYT

[Bill USA]

http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html


That’s the portion of American households that owe no income tax for 2009. The number is up from 38 percent in 2007, and it has become a popular talking point on cable television and talk radio. With Tax Day coming on Thursday, 47 percent has become shorthand for the notion that the wealthy face a much higher tax burden than they once did while growing numbers of Americans are effectively on the dole.
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But the modifiers here — federal and income — are important. Income taxes aren’t the only kind of federal taxes that people pay. There are also payroll taxes and investment taxes, among others. And, of course, people pay state and local taxes, too.

Even if the discussion is restricted to federal taxes (for which the statistics are better), a vast majority of households end up paying federal taxes. Congressional Budget Office data suggests that, at most, about 10 percent of all households pay no net federal taxes. The number 10 is obviously a lot smaller than 47.

The reason is that poor families generally pay more in payroll taxes than they receive through benefits like the Earned Income Tax Credit. It’s not just poor families for whom the payroll tax is a big deal, either. About three-quarters of all American households pay more in payroll taxes, which go toward Medicare and Social Security, than in income taxes.
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[classof56]

1. Thanks for posting.

And good on the Times. Would be nice if Faux, et al Non-News paid attention, but I won't hold my breath.

[virgogal]

4. Why on earth would you even know or care what Fox News covers? Are

you a regular viewer?

Just switch channels.

[classof56]

7. I was just thinking it would be nice if they would make their viewers aware of...

oh, I don't know, facts. Of course they won't. Or I take it they won't because I N.E.V.E.R watch Fox. The only time I see anything emanating from Fox is on the Daily Show, Colbert Report, or now and again Keith, Rachel, Lawrence, Ed, etc. I do not watch national news channels (NBC, CBS, ABC) except for local reports. The only reason I'd care what Fox/CNN/others cover is because that's the only "news" source for the millions of misinformed viewers who are never exposed to truth. I know it's foolish to think they'd ever hear anything but the lies perpetrated on those channels, but every now and then, a tiny glimmer of hope breaks through. It's in vain, of course. I find myself informed about a whole lot of issues from--you guessed it--Democratic Underground. Long may she wave!

Tired Old Cynic

[virgogal]

9. I'm with you-----DU is great news source. I still get a daily paper

though. Some old habits are hard to break.

[Bill USA]

21. Let me 'splain something to you. Faux news gets a lot of viewers. Some of them vote. Getting the

..drift here?

Disinformation is essential to the Corporate Lobbyist party gaining seats in Congress and winning the White House {along with voter suppression, and gimmicked vote tallying (eg. Florida, Ohio in 2000 and 2004 elections)}.

If you want to have a bit more impact on who gets voted into office than just talking to your friends you must 1) be aware of what Disinformation is being thrown around and heard by voters, and 2) you must speak out against the disinformation being spread and counter it with facts and legitimate inferences from the facts.

Remember, you and your personal friends (and the people on DU) are not the only persons who will be voting in elections.


http://tvbythenumbers.zap2it.com/2011/03/30/fox-leads-seasons-ratings-race-cbs-in-second-abc-nbc-tied-in-third/87619/">Fox Leads Season's Ratings Race, CBS In Second, ABC & NBC Tied In Third

2010-11 SEASON TO DATE RATINGS (Through week 27 of 35, March 21-27, 2011)

Fox will, once again, finish first among broadcast networks in the advertiser important adults 18-49 ratings for the 2010-11 season, and CBS will finish second. CBS fans can whine all they want about the unfair advantage of the Super Bowl, but even without it Fox would certainly have passed CBS, the Super Bowl just sped up the timetable.

NBC and ABC are in a season to date adults 18-49 third place tie with ABC, but that won't last for the rest of the season. ABC will certainly pull ahead of NBC before the end of the season.
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Jon Stewart spends much of his time exposing the disinformation FOX creates and regurgitates. http://www.mediamatters.org">MediaMatters.org devotes more column space to Fox News Network than any other perveyor of disinformation.

[Doctor_J]

24. Since the original talking point (lie) was the creation of Fox,

why would they say out loud that's it's a lie? Their primary function is to keep their junkies stupid.

[bluestateguy]

2. Any Republican who wants to run on a platform of raising taxes on the poor and lower middle class

I would welcome and encourage them to go right ahead and do that.

[Bill USA]

3. of course they would call it "tax reform"

[Cowpunk]

18. They're all doing that! It's called "broadening the tax base"

President Obama seems to like the idea as well.

[jtrockville]

5. Don't you have to be a math wiz to know 10 is less than 47?

[bhikkhu]

6. Yes, and the more important percentage:

everyone making less than 500K a year, on average, pays about 40% of their income in taxes of one form or another. Everyone making more than 500K a year pays about 17% of their income in taxes on average. The net effect is to drain the accounts of the bulk of the country, while enriching the minority of the very wealthy.

If things seem unfair to people in terms of the OP, it has more to do with the huge concentration of wealth at the top, and the almost complete lack of resources and opportunities at the bottom.

[cascadiance]

8. And a THIRD of SS payouts go to the disabled and for survivor benefits..

... which arguably is NOT a pension program payout but it is a safety net payout.

So arguably, though many on the right will claim that it is all paying in to their retirement, the fact is that what they pay in payroll taxes does NOT all go in to paying back their retirement. It pays for our safety net.

Which begs the question, why should the very wealthy pay next to nothing for this safety net, and the poor in effect pay a third of their payroll taxes to pay for this safety net. THAT is completely not fair distribution of the burden those responsibilities of government. The wealthy are the deadbeats there. And that is paying for the likes of Paul Ryan, who got a piece of that third from when his father passed away and used it to pay for his college expenses.

So anytime wingnuts throw out that these people don't pay any federal taxes and calls them deadbeats, turn it right around on them and show them where the real deadbeats are, who have MORE than enough to pay for their share, but buy off congress to make sure that they can continue to cheat the rest of us and keep the cap from being lifted!

[Angry Dragon]

10. There are millionaires that pay no federal income taxes

at the end of the year

[former9thward]

11. Only if they had no income that year.

[plumbob]

13. Incorrect. IRS reports nearly a thousand people with a million or more in

income paid no federal income tax.

http://www.csmonitor.com/Business/2010/0415/Tax-Day-101-How-some-millionaires-can-owe-no-taxes

Nearly a thousand Americans with more than $1 million in income paid no taxes in 2007.

How's that?

It's a phenomenon that, when mentioned in another installment in this series, drew reader questions. After all, the US tax code is set up to lean hardest on people with higher incomes, and $1 million is high by any standard.

Yet 959 tax filers had that much income and were not taxed, according to latest (2007) data from the Internal Revenue Service. And, as the earlier Monitor article reported, 1,646 tax filers with incomes between $500,000 and $1 million were "nontaxable," or owed no tax that year.

more at link

[former9thward]

14. It means they had losses in previous years.

It doesn't just apply to millionaires. Anyone can use it. I don't understand the point.

[plumbob]

17. Where do you get this information? Nothing from the IRS indicates this.

Link, please.

[former9thward]

19. I get my information because I am familiar with the tax code.

Mine is the most logical and least complicated explanation. I don't have links that give me access to their tax returns and neither does anyone but the IRS. Do you really think the IRS is allowing people to have incomes of $1 million and they don't bother to get taxes from them? That is not how the IRS works.

[Bill USA]

22. There is nothing simple about the U.S. tax code. There is a multitude of deductions that can be used

to deduct from your actual income to arrive at what is called your 'taxable' income. There are charitable contributions, extraordinary losses and tax havens to name few. The wealthy can afford to pay tax attorneys to figure out ways (mostly legal) to reduce their taxable income.

A few years ago a number of Accounting firms were offering tax avoidance schemes to clients (with enough money to make it worth their while) that were advertized as being able to reduce their taxes enough to be worth the fees involved. They can get in trouble with the IRS though, if some business arrangement enterred into by the client does not appear to be an undertaking for legitimate business purposes (i.e. to make money) but is only a contrivance to generate losses so as to reduce the clients ultimate tax bill.

As Warren Buffett has said he, and many other super wealthy, pay LESS in taxes (as a percent of their real income) than people like his secretary making a small fraction of what Mr. Buffett and other super wealthy individuals do.

as far as corporations go the GAO has said that about 60% of the corporations in a survey paid zero income taxes in at least two years of a survey covering seven years. http://www.reuters.com/article/2008/08/12/us-usa-taxes-corporations-idUSN1249465620080812">Study Says Most Corporations Pay No U.S. Income Taxes

Forget about the fairness issue, when you transfer too much of the tax burden to the middle class you end up with an economy that does not grow and create jobs as it could. You need a middle class with enough after tax money in their pockets to buy enough of the products companies want to sell them so that the companies make enough money to hire more people and create more jobs. The economy just will not grow like it could when the middle class does not get enough of the wealth. If the middle class does get enough of the wealth, companies make MORE money, have an opportunity to be more profitable - which means the wealthy - if they are invested in the right businesses become MORE wealthy.

The wealthy will do much better, in general, in situation of a strong, growing economy, because businesses have the opportunity to make more money, to invest in new product development and to grow.

[plumbob]

23. Thank you. The silly idea that the only reason people pay no taxes is if

they have no money is just a meme.

There are many schemes not available to ordinary folks that can reduce tax liability to zero.

[former9thward]

25. Link to the "many schemes"?

As someone who is clearly far more familiar with the tax code than you are I would like to see what schemes you come up with (not available to ordinary folks) -- in your words.

[JohnWxy]

26. I'm assuming this is an open discussion. I offer links to articles not in my words but in the words

of people who are far more knowledgeable than I in these technical matters(I want to offer the best info I can find):

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x628987"> We lose $100 BILLION every year in uncollected taxes due to income sheltered off shore.


http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x628961">High Income, No Taxes: How Big Money Beats the IRS - Fiscal Times

[FogerRox]

12. Original purpose of the EITC was to compensate for

the regressivity of FICA.

[eyeofdelphi]

15. we pay taxes every day that we don't even think about

my family is definately in that 47% that pays no federal income tax. but we still pay all the sales taxes, and we never see that come back. so we are at least contributing something. here in our part of virginia, it's 4.5% tax on pretty much everything, and then 8% tax on prepared foods, like when you go to a restaurant. it's not so much that at the time you really notice, but it adds up throughout the year.
oh, and i am aware that there are places that have no sales tax. i'm just not lucky enough to live in one.
i don't have any problem whatsoever paying these taxes, i'm not whining. i just think Fox should probably include this information, though pigs will fly before they'll ever provide any factual information to their viewers. pretty much everyone pays taxes in some form or another. making a huge deal about 47% of the population that's so poor they're exempted from paying federal taxes kinda seems like class warfare to me.
also, i have recently heard that the figure of people who don't pay federal taxes is 51%. is that now correct? this article was printed in april of 2010, so the figures have probably changed. yes, i know, i will google and get back to you.

[eyeofdelphi]

16. ok, sorry

i guess i just made that 51% thing up in my head. i don't know where i got that from, and since i can't find anything to support it, sorry.

[Lydia Leftcoast]

20. I've seen right-wingers use that figure to claim that half of Americans are

"freeloaders."

[Bill USA]

27. I would hope that some people would use the info & NYT article in comments on M$M sites to counter

the RW Bull. (note: USA Today now allows inclusion of urls in your comments - (which become active links!).