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45% of Americans Pay No Federal Income Tax

15 points by clarkmoody 11y ago

aorth 11y ago
Article mentions that 77 million "households" either have no taxable income or "half get enough tax breaks to erase their tax liability." Just for reference, there are also a handful of people who qualify for the Foreign Earned Income Exclusion, which is a legal exemption from paying federal income taxes if you, for example, are outside of the US for more than 330 days a year. - https://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion https://www.irs.gov/Individuals/International-Taxpayers/Fore... - https://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion---Requirements https://www.irs.gov/Individuals/International-Taxpayers/Fore...
mikeyouse 11y ago
Thanks Mitt Romney. "Roughly half pay no federal income tax because they have no taxable income, and the other roughly half get enough tax breaks to erase their tax liability, explains Roberton Williams, a senior fellow at the Tax Policy Center." So something like 22% of households have literally 0 taxable income, and the remaining 22/23% earn so little that the standard deduction + FICA/SSI + other deductions zero out their taxable income. Those lucky duckies, earning so little money that they don't pay one type of tax!
banku_brougham 11y ago
This headline makes the rounds every year. Perfect example of how to 'lie' with statistics, but at least this one includes the qualifier 'Federal'. I say it's a lie because the implication of the headline is that a bunch of moochers are getting over on us righteous tax-payin Americans. But with FICA, state taxes, sales taxes, gas taxes, etc these same non-federal-tax-paying citizens have a higher tax rate than Warren Buffet.
- Torgo 11y ago
  Buffett paid almost seven million dollars in federal taxes in 2011, that's a huge absolute amount for a single individual and whatever the rate that is for him, I'm finding it really hard to frame him as a moocher compared to almost half the country paying literally 0%.
  - dallbee 11y ago
    Another thing that hasn't been mentioned is age & school status. From 18-23 I worked part time and never had to pay taxes. I was part of that group who zeroed out, and now I contribute $20,000 per year (proudly, I might add). Am I a moocher?
    - Torgo 11y ago
      You make a good point. 45% of the country are probably part time workers aged 18-23, who soon will become more valuable contributors to the economy than Warren Buffett.
- harryh 11y ago
  Yet another reason that we should get rid of FICA taxes as a separate thing and roll them into regular old federal income taxes.

15 points by clarkmoody 11y ago

aorth 11y ago

Article mentions that 77 million "households" either have no taxable income or "half get enough tax breaks to erase their tax liability." Just for reference, there are also a handful of people who qualify for the Foreign Earned Income Exclusion, which is a legal exemption from paying federal income taxes if you, for example, are outside of the US for more than 330 days a year. - https://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion https://www.irs.gov/Individuals/International-Taxpayers/Fore... - https://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion---Requirements https://www.irs.gov/Individuals/International-Taxpayers/Fore...

mikeyouse 11y ago

Thanks Mitt Romney. "Roughly half pay no federal income tax because they have no taxable income, and the other roughly half get enough tax breaks to erase their tax liability, explains Roberton Williams, a senior fellow at the Tax Policy Center." So something like 22% of households have literally 0 taxable income, and the remaining 22/23% earn so little that the standard deduction + FICA/SSI + other deductions zero out their taxable income. Those lucky duckies, earning so little money that they don't pay one type of tax!

banku_brougham 11y ago

This headline makes the rounds every year. Perfect example of how to 'lie' with statistics, but at least this one includes the qualifier 'Federal'. I say it's a lie because the implication of the headline is that a bunch of moochers are getting over on us righteous tax-payin Americans. But with FICA, state taxes, sales taxes, gas taxes, etc these same non-federal-tax-paying citizens have a higher tax rate than Warren Buffet.

Torgo 11y ago
Buffett paid almost seven million dollars in federal taxes in 2011, that's a huge absolute amount for a single individual and whatever the rate that is for him, I'm finding it really hard to frame him as a moocher compared to almost half the country paying literally 0%.
- dallbee 11y ago
  Another thing that hasn't been mentioned is age & school status. From 18-23 I worked part time and never had to pay taxes. I was part of that group who zeroed out, and now I contribute $20,000 per year (proudly, I might add). Am I a moocher?
  - Torgo 11y ago
    You make a good point. 45% of the country are probably part time workers aged 18-23, who soon will become more valuable contributors to the economy than Warren Buffett.
harryh 11y ago
Yet another reason that we should get rid of FICA taxes as a separate thing and roll them into regular old federal income taxes.