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Related: 61% of Americans paid no federal income taxes in 2020 https://www.cnbc.com/2021/08/18/61percent-of-americans-paid-no-federal-income-taxes-in-2020-tax-

• m_ke 5y ago
  Might have something to do with this: https://christiankull.files.wordpress.com/2020/06/economist-graph-jpg.jpg https://christiankull.files.wordpress.com/2020/06/economist-...
  • bagels 5y ago
    Wondering what that looks like after taxes.
    • m_ke 5y ago
      Taxes on the rich went down during that time https://www.nytimes.com/interactive/2019/10/06/opinion/income-tax-rate-wealthy.html https://www.nytimes.com/interactive/2019/10/06/opinion/incom... https://static01.nyt.com/images/2019/10/04/us/tax-trump-wealth-promo-1570228395029/tax-trump-wealth-promo-1570228395029-superJumbo.png https://static01.nyt.com/images/2019/10/04/us/tax-trump-weal...
      • bagels 5y ago
        Specifically how Europe compared after taxes.
• learc83 5y ago
  I don't pay any federal income tax on the first x dollars of income I earn either. This is nothing but a recognition that money has diminishing marginal utility. The issue is that there are too many people earning less than x.
• vkou 5y ago
  And if we do the accounting, we'll find that most states paid no net federal taxes in 2020, and are wholly dependent on states that did. Is there a particular point you are trying to make, here?
• SavantIdiot 5y ago
  How is that related? I believe that statement is completely unrelated. And possibly flamebait.
  • kome 5y ago
    > Related: 61% of Americans paid no federal income taxes in 2020 It means their income is very low: OP is just pointing out how US society is very very polarized between a small group rich owners (10% that own almost all the stocks) and and a big group of poor people (60% of the population).
    • ericd 5y ago
      Is it including children and the elderly?
      • imtringued 5y ago
        100% of all tax payers paid taxes.
• Jweb_Guru 5y ago
  I assure you that people would happily trade paying some taxes for owning any assets whatsoever.
  • nerdponx 5y ago
    And having functioning public services like healthcare.
  • Aunche 5y ago
    If this were true, they would spend more of their discretionary money on assets rather than consumer purchases.
    • nickthemagicman 5y ago
      'discretionary income' At a median wage of 50k a year...is there discretionary income or are large amounts of people living paycheck to paycheck in America?
      • Shared404 5y ago
        What is the mode wage in America though?
        • solveit 5y ago
          Probably minimum wage of some suitably populous city or state. Why in the world would the mode be relevant though?
          • Shared404 5y ago
            Is not the most common wage more relevant to the issue than the middle? Though I should've asked about the mean, I'm still waking up.
            • kapp_in_life 5y ago
• newacct583 5y ago
  That's because of the covid downturn, though. A ton of people saw a rapid shortfall in income, but it's was (as the article calls out) transitory. It doesn't reflect what we saw in 2019 or will see this year. Questions about wealth distribution are, by definition, not transitory.
  • flyingfences 5y ago
    Even during a "good" year, though, the number is still around half. (Recall Romney's "47%".)
    • newacct583 5y ago
      That's true, but (especially when spread by politicians) terribly spun. Almost half of americans have no federal "income tax" liability. They still pay a ton of federal tax on every paycheck they receive. Their income is absolutely taxed.
      • bpodgursky 5y ago
        That's just not true. It might be taxed at the state or local level, but a lot of people simply don't pay federal income tax (and in fact receive a relatively large refund at the end of the year). (many people get confused and interpret social security and health insurance withholdings as taxes).
        • pessimizer 5y ago
          Many people refer to payroll taxes as payroll taxes, yes.
          • Spivak 5y ago
            Especially since they are, literally, taxes. I would probably even go so far as to call insurance a tax as well since I am legally required to pay it. I may have my choice what company administers my policy but they're effectively private arms of the government.
• tshaddox 5y ago
  In what way is that related?
  • Berobero 5y ago
    It's related in that it morally licenses the privileged to be OK with wealth inequality because, see, the masses are actually being supported by the magnanimous benevolence of their betters.
  • stonemetal12 5y ago
    Owning stocks is one of the ways to avoid paying taxes?
• dv_dt 5y ago
  But they very likely paid sales, property taxes, tolls, and service fees
  • marwatk 5y ago
    And payroll taxes, everyone always forgets payroll taxes.
    • skinnymuch 5y ago
      On top of that, forget that social security part stops at ~$120K-ish. I realize that you are supposed to get a lot of it back, but can you guarantee 100% that will be the case to an 18 year old right now. More than that, it doesn’t exactly fit in with the system that a safety net for when you’re 60+ is forced upon people via taxes that stop mid way through the top 5%+ income amt. it is almost farcical
      • 88913527 5y ago
        The wage limit for 2021 is $142,800 and it's increasing to $147,000 in 2022. https://www.ssa.gov/oact/cola/cbb.html https://www.ssa.gov/oact/cola/cbb.html
        • nobody9999 5y ago
          >The wage limit for 2021 is $142,800 and it's increasing to $147,000 in 2022. While I always enjoyed having that extra ~6.25% in my paycheck after I hit the limit every year, it didn't make any material difference in my spending/saving or quality of life. I expect that's the case for most (if not all) folks who exceed that limit. And since removing those limits would keep the US social security and medicare chugging along nicely for the next 50 years or so, while not doing so will require cuts in benefits within a decade or so. While it's not a certainty, it's more likely that we'll come up with better ways to fund healthcare in 50 years rather than in ten. As such, it makes sense to remove those wage limits on FICA[0] payroll taxes. [0] https://www.investopedia.com/terms/f/fica.asp https://www.investopedia.com/terms/f/fica.asp
• literallyWTF 5y ago
  This just in, poor people don’t have much money. Do you expect to squeeze blood out of a stone as well?
• skinnymuch 5y ago
  Key word “federal”. Why specify what specific tax it is? Does it not muddy the waters vs talking about taxes overall? I did an anecdotal test with a few people near me. They read this as those people pay no taxes. Most people aren’t thinking about the specifics of state, federal, FICA (SS + Medicare), sales, property, and more. I can’t think of any good faith reason this is done.
  • jimbob45 5y ago
    Several states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming) don't pay any state tax. I'm sure you could make a statement like "85% of US residents don't pay state tax" that would be true but also be incredibly misleading.
    • camhart 5y ago
      Just to clarify (I believe this is what you were hinting at), they dont pay any state income tax. If you look at sales/property taxes for those states you can see some of them make up for the lack of income tax.
      • jimbob45 5y ago
        Right, yes, the point is that state taxes can get very nuanced which is why I'm guessing they weren't included in the analysis.
    • wbl 5y ago
      New Hampshire doesn't tax wage income. It does tax unearned income.
  • bidirectional 5y ago
    Shouldn't taxes be thought of as a contribution to some form of spending rather than a purely punitive measure? Why is it not important that 61% of people do not contribute anything to the spending done by the federal government, even if they do contribute to other spending?
• AdamN 5y ago
  That's even worse. It presents even more clearly that the United States has been captured by the upper class, who pay all the bills but also receive all the proceeds (aside from small supports to keep the lower and middle classes working and productive). This isn't much different than Rome, which of course the US is modeled on. The only solution is a wealth tax for the next 10 years which dovetails into more sensible taxation on capital gains to prevent this from happening again. The thing is that most CEOs of Fortune 500 companies aren't even in the 1%, which requires $11.1MM in assets: https://www.investopedia.com/financial-edge/1212/average-net-worth-of-the-1.aspx https://www.investopedia.com/financial-edge/1212/average-net...
  • vinay427 5y ago
    > This isn't much different than Rome, which of course the US is modeled on. Do you have a source for either of these claims? I can’t seem to find a clear one, especially for the latter claim.
    • margalabargala 5y ago
      Here's an academic article on how ancient Rome influenced the writing of the US Constitution: https://www.jstor.org/stable/3290141 https://www.jstor.org/stable/3290141
      • JumpCrisscross 5y ago
        > Here's an academic article on how ancient Rome influenced the writing of the US Constitution Influenced. Not modeled on. Every republic since Cæsar has been influenced by Rome, including but not limited to its discussion on the relative benefits of monarchy, oligarchy and democracy.
        • sudosysgen 5y ago
          What Republic has had the most influence on the USA? There were very few republics between the fall of Rome and 1776. All basically local governments and very feeble.
• deleted 5y ago
  [deleted]
• paulpauper 5y ago
  A decent chunk of adult Americans are effectively on the margins .. not contributing much at all to the economy. It's sad but a reality
  • Berobero 5y ago
    The "economy" is not just what is captured in formally taxable income. Large swaths of the economy is composed by absolutely essential reproductive labor that receives no direct monetary compensation. Conversely, the existence monetary income doesn't necessitate that economically meaningful or necessary labor is being performed, just that it is being compensated for in a formal manner. Then, of course, there's unearned income -- very much so related to the topic of "stock ownership" that started this thread -- which, by definition, is acquired not through any meaningful contribution of labor to the "economy", but instead as a reward for the incidental private claim to profits our economic system happens to allow to people.
  • imtringued 5y ago
    They still do a big chunk of the work.
• varelse 5y ago
  But do the wealthiest 10% pay 90% of the taxes? Answer: nope. Eventually there's a reckoning for this discrepancy, but that's why we have corporate media to delay that as long as possible. https://taxfoundation.org/publications/latest-federal-income-tax-data/ https://taxfoundation.org/publications/latest-federal-income...
  • opo 5y ago
    From your link it says the top 10% received 47.7% of gross income but paid 71.4% of total income taxes paid. Why do you think that if they receive 47.7%, they should pay 90% of the taxes?
    • varelse 5y ago
      Because they own 90% of the toys and I think we should be taxed more on our share of the toys as opposed to our annual take of toys or we are eventually heading for a nasty tragic unproductive violent revolution. But thank you for playing. If you can make the singularity happen instead and then end scarcity that'll work too, but good luck with that. Also if you haven't figured out by now that the investor class has figured out how to shelter almost all of their income from taxation, you haven't been paying attention. Time to make them work for their tax dodging ways again IMO. I am also aware of previously badly implemented wealth taxes that hit just about everyone because of their very low threshold. So have a high threshold this time, say 10 or 50 million $$$, problem solved. Maybe I would feel differently if I were one of the lucky few with a bug out bunker/castle/estate in New Zealand or inside a dormant volcano, but alas.
• klyrs 5y ago
  There's a $10k deduction for state taxes. If the state tax rate is greater than the federal rate, then they won't pay federal income tax. Also, federal income tax doesn't include payroll taxes. Indeed, the last paragraph mentions this: > Federal income taxes do not include payroll taxes. The Tax Policy Center estimates that only 20% of households paid neither federal income taxes nor payroll taxes. And “nearly everyone” paid some other form of taxes, including state and local sales taxes, excise taxes, property taxes and state income taxes, according to the report. Nice cherry-picked, but meaningless, statistic you've got there.
  • deleted 5y ago
    [deleted]
  • lotsofpulp 5y ago
    The $10k SALT deduction does not apply to the 90% of tax filers who do not itemize since the standard deduction is worth more.
  • drdec 5y ago
    > There's a $10k deduction for state taxes. If the state tax rate is greater than the federal rate, then they won't pay federal income tax. That would be true if it were a credit, but it is a deduction.
• ypcx 5y ago
  Governments should be forced to choose between collecting income taxes _or_ taxing everyone through the general monetary inflation (a.k.a. money printing). They currently practice both - the income tax taxes the non-rich, and the inflation also only taxes the non-rich, because the freshly-printed money goes to the rich.
  • whakim 5y ago
    One of the reasons central banks and monetary policy have taken on such a strong role over since the 2008 financial crisis is an unwillingness to have honest discussions about taxation. If we want "nice things" however you define them, it's easier to outsource the details to an amorphous central bank than actually discuss a just and equitable tax regime that can support those things.
    • imtringued 5y ago
      The central bank doesn't really do "inequality" in the sense that getting rid of the central bank will get rid of the inequality. It can only amplify or maintain a trend. The fact that earning money from stocks is profitable than earning money from work is something that can be easily explained by the tax system.
      • whakim 5y ago
        I agree with you that central banks don't have the tools to solve inequality in the long run (as you point out, the tax system and spending does). I'm simply noting that we've collectively invested central banks with magical powers because of our unwillingness to actually discuss taxation.
  • BeFlatXIII 5y ago
    The entire point of taxes in the modern day is a polite fiction to prevent money-printing from ending up like the Weimar Republic or Zimbabwe.
• purple_ferret 5y ago
  Also related (and not spun in a way to make it seem like 61% of Americans aren't paying their fair share): From 1975 to 2018, the difference between the aggregate taxable income for those below the 90th percentile and the equitable growth counterfactual totals $47 trillion. "Trends in Income From 1975 to 2018" https://www.rand.org/pubs/working_papers/WRA516-1.html https://www.rand.org/pubs/working_papers/WRA516-1.html
• simorley 5y ago
  Just a note. You don't pay income taxes on stocks. You pay capital gains taxes.
• vngzs 5y ago
  That CNBC article is unbelievably misleading. If you dig into the sources, it links to the actual report [0] where they state that 80% of households paid federal income or payroll taxes: > Remember, this reflects only those who pay no federal individual income tax. TPC estimates that while the number of households paying neither payroll nor income taxes also rose significantly, roughly 4 out of every 5 did pay one of these two taxes. The trick is that "income tax" is used as a technical term in the headline, while the colloquial use of it is quite different (average readers would probably consider their payroll tax to be "income tax"). [0]: https://www.taxpolicycenter.org/taxvox/covid-19-pandemic-drove-huge-temporary-increase-households-did-not-pay-federal-income-tax?utm_medium=twitter&utm_source=tpc_social https://www.taxpolicycenter.org/taxvox/covid-19-pandemic-dro...
  • GhostVII 5y ago
    I don't think that is really misleading, at least I wouldn't consider Medicare/social security as a part of my federal income tax. When I think of income tax I think of tax brackets and deductions, not payroll taxes which are deducted before I ever receive any income, and which I never really have to deal with. Based on the headline, I would have assumed that 57% of people had enough deductions/low enough income to be below the bottom income tax bracket. Which is correct, based on what you said.
  • vmception 5y ago
    Even as a technical term, income has like 5 different meanings and contexts in the tax code, only sometimes distinguished by adjectives such as "ordinary", "adjusted gross", "modified adjusted gross", etc So its very easy to use this to your advantage and appeal to emotion, when convenient, or pass tougher tax laws that never affect you, which is even more convenient.
• vmception 5y ago
  I just filed my taxes on Friday, the last date of the extension. When you change the tax code 3 times in one year, after overhauling it a few years earlier, it can complicate the ability to report. Also the 2020 tax code changes allowed for 100% deductions against your income for donations to some kinds of non-profits. That plus being able to withdraw from 401ks, plus having large drops in income, means many people would not have anything to pay. You can always spend more than you earn (on certain things) and nullify your taxes that year. You just have to have more than you earn already, whether its savings, credit card debt, or other capital. So it should be obvious thats not an experience most people ever have, if they are barely making ends meet to cover living costs monthly. But its always available.