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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

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?
- wbsss4412 5y ago
  Per parent comment, those people do contribute to federal spending through payroll and other taxes, even if income taxes make up the largest proportion of revenues. The fact that you took it that way is evidence of how the original comment is misleading to many people.
  - skinnymuch 5y ago
    I’m not sure how the person took it. I agree the fact that it is taken in some way and I’m not sure which way, is indicative of the misleading quality of the original comment and the comment saying 43% pay no payroll tax (which is only true during the two stimulus years)
- tshaddox 5y ago
  Many states receive more federal funds than they contribute in taxes, so according to this mode of argument the population of those states do even worse than contribute nothing.
- skinnymuch 5y ago
  This is what I said I believe. Are you doubling down on what I said? Like a sibling comment said. The fact that we are confused shows how both the original stat and the technically correct but largely incorrect 43% pay no payroll tax either, are not good statistics. They muddy the water
- imtringued 5y ago
  61% of people not paying income tax can mean a lot of things. For example, a lot of them don't have to pay income taxes. Children and the unemployed don't pay it.
deleted 5y ago
[deleted]
MuffinFlavored 5y ago
> Why specify what specific tax it is? Because the majority (50%) of the money spent by the US Federal government is mainly from federal income tax. https://www.taxpolicycenter.org/briefing-book/what-are-sources-revenue-federal-government https://www.taxpolicycenter.org/briefing-book/what-are-sourc...
- secabeen 5y ago
  True, but manyservices that Americans get from government comes from state and local government: schools, fire/police, etc. The feds dominate the national new coverage, but local government generally has a much larger affect on your day to day life.
  - flowerbeater 5y ago
    I've heard this trope before, but it doesn't seem true to me. The federal government's day-to-day services include universities (through student loans and grant funding), travel (domestic and international), the quality of food we eat, healthcare regulation, and nearly everything to do with employment. The local governments seem to focus mostly on K-12 schools, and police/fire; plus some one-off errands like the DMV and liquor laws. The amount of federal taxes I pay is a life-changing amount if I were to get it back in a single check every year, whereas the state/city taxes of sales+property+stateincome is maybe a quarter as much.
- mikeyouse 5y ago
  Right, but the misleading "Don't pay Federal Income Taxes" trope purposefully ignores that they do pay Federal Payroll Taxes -- which per your chart is another 36% of government revenue.
  - TameAntelope 5y ago
    Digging into the report, 43.3% of people didn't pay either in 2020 [1], if that helps you out at all. [1] - https://www.taxpolicycenter.org/model-estimates/tax-units-zero-or-negative-income-tax-liability-august-2021/t21-0161-tax-units-zero https://www.taxpolicycenter.org/model-estimates/tax-units-ze...
megaman821 5y ago
I totally agree, but people pull this same move when comparing our tax rates to European countries. People frame their arguments in a light most beneficial to their points they are trying to make.
- skinnymuch 5y ago
  Yes well put. Exactly how it goes.
mooreds 5y ago
How about "X% of people paid no tax" which is really the meaning of this. Here's a page which talks about the effective tax rates of, as far as I can tell, all taxes people in the USA pay: https://itep.org/who-pays-taxes-in-america-in-2020/ https://itep.org/who-pays-taxes-in-america-in-2020/ This is far more useful for the discussion about how we pay for common goods than "61% of Americans pay no federal income taxes". (Never heard of ITEP before this, but they claim to be non-partisan, FWIW.)
- ClumsyPilot 5y ago
  We are missing the real juicy bit- top 0.1%
- Qiu_Zhanxuan 5y ago
  Nice ressource, if every country had that we could have a common ground on which to discuss wealth and income inequality
Berobero 5y ago
Also, "federal" here does not include not include payroll taxes, which are, nonetheless, considered "federal taxes" in any colloquial conception of the term. Of course, in addition to the lying by omission, the true irony here is that the "lack" of "federal" taxes paid by the masses is more so a symptom of a deeply inequitable economic system than the counterbalancing endorsement of the status quo the OP likely envisions it to be.
- skinnymuch 5y ago
  Your second paragraph and last sentences of the first paragraph are perfectly on point. If I wasn’t so worried I was saying something wrong, I would have seen this an hour ago and been able to just say what you wrote. As this is the actual crux of the matter.
throwawaycities 5y ago
I think you have it backwards. The extremely rich that might make millions or even billions a year but pay $0 income taxes love to play that game and muddy the water by saying they paid taxes…everyone in these contexts is talking about federal income taxes, not sales tax or property taxes. How about turn your question around and ask why the top CEOs (especially in tech) pay $0 federal income taxes claim they did pay taxes when they are referencing having paid sales tax, as if not paying sales tax is even a real issue, is in good faith.
- deleted 5y ago
  [deleted]
- wbl 5y ago
  There is no way to do that as a CEO. At best your stock holdings can rise, but your compensation will be taxed. The places where you can earn significant untaxed income are via real estate.
  - throwawaycities 5y ago
    All those CEOs that take $0 or $1 salaries and then do press releases about it, how much do you think they are paying in taxes on that salary?
    - zsmi 5y ago
      Although you're totally correct I think you're underselling the complexity of the situation. On paper, the super rich (and even just merely "very" rich) can even show negative incomes [1] because they can a take very low interest-rate loan (which is in a way kind of tax, but paid to the bank) backed by their assets to pay expenses thus they can show no income and no realized capital gains. But, if you think about it, the practice is not all that different than taking out a home equity line on a house, for example. So whomever writes that law better be really careful or else the only ones who are going to get caught in that net are the middle class. Here is a nice article on the subject. https://www.bbc.com/news/business-57383869 https://www.bbc.com/news/business-57383869 [1] They would never actually do that because one needs to harvest that loss. They want to show $0 so they would sell something the balance the negative income out.
dec0dedab0de 5y ago
Because most people are smart enough to understand that they mean federal income tax. Especially when comparing the entire country, or talking about federal tax policy.
thoughtstheseus 5y ago
Do you pay sales tax on purchases? SALT deductions also reduced those paying federal taxes paid when they were still around. Agreed that people misunderstand it quite easily.
SquishyPanda23 5y ago
This is an odd line of reasoning. It's like responding to "Joe didn't pay for his main course at the restaurant" with "yeah but he paid for some of the appetizers."
- wbsss4412 5y ago
  The fault in your logic here is that in your metaphor joe ate the same as everyone else at the restaurant. The benefits of society as a whole are not equally shared. The wealthiest in society benefit the most from a functioning and stable federal bureaucracy.
  - skinnymuch 5y ago
    Perfect response! Your profile is blank. If you’re up for it. Look at mine and send me an email. Every other comment I saw where I knew the comment was not logically sound but couldn’t quite word it right. You were there already having written a great response.
    - wbsss4412 5y ago
      Thank you for your comment! I’m going to consider reaching out, but I also like keeping my account pseudonymous so I’ll have to figure some things out.
      - skinnymuch 5y ago
        Of course, understand your concern. I haven’t updated my HN in forever. It is updated now. If you ever reach out as someone who discovered the community I co-founded or even just try it out. I nor any one else would ever know you are this current handle. Since there’s a few inquires a week and they range a lot.
  - SquishyPanda23 5y ago
    > in your metaphor joe ate the same as everyone else at the restaurant. That's not anywhere in my metaphor. > The benefits of society as a whole are not equally shared. This is true but not relevant to my point. > The wealthiest in society benefit the most from a functioning and stable federal bureaucracy. This is less likely to be true and also not relevant to my point.
wang_li 5y ago
I've not looked for a new edition of the report but the CBO has put out reports that calculates net tax rates and more than half of the country are not federal net tax payers (this includes all federal taxes.) And more than 40% of them are so much not net payers that it offsets their entire non-federal tax burden. Ultimately a very large portion of Americans don't pay for any of government and government spending and services.
- Joeri 5y ago
  They do pay, they just get more back out. In a country without any redistribution of wealth and a perfectly efficient government everyone would be a net zero contributor to the government. In practice most countries have a few hubs where most of the wealth is created (typically coastal cities), and the taxes collected there fund the rest in the form of redistribution of wealth.
- Frondo 5y ago
  Nearly everyone in the US lives in a state with a sales tax (only five do not have a state-level sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon.) And, of course, nearly everyone buys something regularly, whether food or clothing or other necessities of life. It's 100% absurd and untrue to say "a very large portion of Americans don't pay for any of government" when most of us pay something every time we get a box of crackers or put gas in our tanks. And if you're going to follow up and clarify with a much narrower way that your statement could be taken to be true, then I'd like to know why you opened with "a very large portion of Americans don't pay for any of government" instead of that much more specific -- and much less "the poors are getting a free ride" -- statement.
  - wang_li 5y ago
    You need to understand that I'm talking about net taxes. Referencing [0], the bottom 20% of households have a median market income of $15,800. They receive $9,600 in transfers and services. Their pre-tax income is $25,400 and they pay $800 in taxes. States and municipal taxes vary, but even high sales tax states and counties have rates of 15% or less. Let's call it 20% just to be extra generous in the discussion. Take their $24,500 in after tax dollars and spend every bit of it and pay 20% on all transactions. These households have paid $4,900 in non-federal taxes. So their net contribution across all levels of government is $4,900 - $9,600 = $-4,700. On a net basis, they don't pay for any part of the operations of the country at any level because the federal transfers pay for all of their non-federal tax burden. If you look at the second quintile and do the same math, you also get a negative result. Only at the middle quintile does it even become possible for them to spend so much locally that their local taxes offset the amount in transfers and services. I stand by my statement that a very large portion of Americans don't pay for any government. Assuming you consider ~40% of Americans to be a very large portion. I didn't say a majority, just a very large portion. Though it is possible that a majority of households don't pay for any government, depending on the specifics of their local tax rates and spending habits. If the middle quintile doesn't spend ALL their money at a local average tax rate of 12.8%, then they don't contribute either. 0. See page 31, table 1 of 2013 Distribution of Household Income and Taxes [pdf], https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/51361-householdincomefedtaxesonecol.pdf https://www.cbo.gov/sites/default/files/114th-congress-2015-...
jandrewrogers 5y ago
At the Federal level, it is more useful to talk about net taxes of all types. That is, taxes of all types paid to the Federal government (income, excise, payroll/social, etc) after subtracting all transfers and distributions to the taxpayer. This is a more accurate accounting of the situation. It paints a slightly different picture, but not that different. It turns out that only about 20% of taxpayers send more money to the government than they receive in aggregate across all forms of taxation and transfers. Another 20% of taxpayers roughly pay their own way, providing about as much tax revenue as they receive in transfers. 60% of taxpayers receive more in transfer payments and other distributions than they pay in taxes (not that surprising with things like Social Security). tl;dr: across all Federal taxes and transfer payments taken as net, 20% of taxpayers are paying taxes that are transferred to 60% of taxpayers. Individual States have diverse taxation structures, so the net taxpayer statistics likely vary widely.
commandlinefan 5y ago
> They read this as those people pay no taxes Nobody on earth would ever read "not paying federal taxes" as meaning also not paying social security, medicare, sales or property taxes.
- skinnymuch 5y ago
  Of course not sales tax. However for the rest, yes people would. People are quickly reading the stat. They aren’t thinking deeply or in a nuanced fashion. They aren’t on a forum like this. They are going about their day. You agree not everyone knows what payroll taxes specifically go toward or that there’s even a separation of federal income taxes and payroll taxes as distinct things, right?
- svachalek 5y ago
  Social Security and Medicare are federal taxes so hopefully some people are aware of that.
fallingknife 5y ago
Federal income taxes are the money that funds the federal government. The military, congress, FBI, courts, EPA, etc. Payroll taxes go to entitlement programs, so they are more similar to paying insurance premiums than actually funding the activities of the government.
RC_ITR 5y ago
Because almost everyone who purchases anything pays 'sales tax' and almost all homeowners pay 'property tax,' but the problem we care about is income/capital gains tax evasion.
- skinnymuch 5y ago
  If that’s the problem that is cared about. Are you saying going after the lower socioeconomic class of America is how to get back those evaded taxes? The narrative in general for the statistic is about lower socioeconomic people. If this was a good faith caring about tax evasion. Why would the focus be on the people with the least income and wealth? I don’t think it would be if that was really the problem being cared about. And yes the sales tax is part of the point. To give nuance to such a simple statistic.
  - deleted 5y ago
    [deleted]
  - AniseAbyss 5y ago
    We are going back to a time where the church and nobility are exempt from taxation and the monarch in desperation keeps squeezing the peasants.
  - RC_ITR 5y ago
    Yeah, Brookings or whatever cesspool that made this left out those taxes as part of their narrative. I included them to counter that narrative and the you RAN with my intent. EDIT: To that point, you can absorb statistics from an organization but still disagree with their editorializing.
cactus2093 5y ago
I don't really see how it misleads the argument in a way that would be considered bad faith. But I do agree focusing on the $0 number does seem kind of arbitrary. A better metric might be percentage of the total tax burden paid by the bottom 50% of the income distribution. Maybe that is 0% if you look purely at federal income tax, and maybe it rises to something like 5% if you include all the other taxes you mention. But I don't think it changes the picture significantly.
suzzer99 5y ago
The funniest part is that a good chunk of the people who pass along this link in grievance are probably in the group that technically pays no income tax, and don't even realize it.

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?

wbsss4412 5y ago
Per parent comment, those people do contribute to federal spending through payroll and other taxes, even if income taxes make up the largest proportion of revenues. The fact that you took it that way is evidence of how the original comment is misleading to many people.
- skinnymuch 5y ago
  I’m not sure how the person took it. I agree the fact that it is taken in some way and I’m not sure which way, is indicative of the misleading quality of the original comment and the comment saying 43% pay no payroll tax (which is only true during the two stimulus years)
tshaddox 5y ago
Many states receive more federal funds than they contribute in taxes, so according to this mode of argument the population of those states do even worse than contribute nothing.
skinnymuch 5y ago
This is what I said I believe. Are you doubling down on what I said? Like a sibling comment said. The fact that we are confused shows how both the original stat and the technically correct but largely incorrect 43% pay no payroll tax either, are not good statistics. They muddy the water
imtringued 5y ago
61% of people not paying income tax can mean a lot of things. For example, a lot of them don't have to pay income taxes. Children and the unemployed don't pay it.

deleted 5y ago

[deleted]

MuffinFlavored 5y ago

> Why specify what specific tax it is? Because the majority (50%) of the money spent by the US Federal government is mainly from federal income tax. https://www.taxpolicycenter.org/briefing-book/what-are-sources-revenue-federal-government https://www.taxpolicycenter.org/briefing-book/what-are-sourc...

secabeen 5y ago
True, but manyservices that Americans get from government comes from state and local government: schools, fire/police, etc. The feds dominate the national new coverage, but local government generally has a much larger affect on your day to day life.
- flowerbeater 5y ago
  I've heard this trope before, but it doesn't seem true to me. The federal government's day-to-day services include universities (through student loans and grant funding), travel (domestic and international), the quality of food we eat, healthcare regulation, and nearly everything to do with employment. The local governments seem to focus mostly on K-12 schools, and police/fire; plus some one-off errands like the DMV and liquor laws. The amount of federal taxes I pay is a life-changing amount if I were to get it back in a single check every year, whereas the state/city taxes of sales+property+stateincome is maybe a quarter as much.
mikeyouse 5y ago
Right, but the misleading "Don't pay Federal Income Taxes" trope purposefully ignores that they do pay Federal Payroll Taxes -- which per your chart is another 36% of government revenue.
- TameAntelope 5y ago
  Digging into the report, 43.3% of people didn't pay either in 2020 [1], if that helps you out at all. [1] - https://www.taxpolicycenter.org/model-estimates/tax-units-zero-or-negative-income-tax-liability-august-2021/t21-0161-tax-units-zero https://www.taxpolicycenter.org/model-estimates/tax-units-ze...

megaman821 5y ago

I totally agree, but people pull this same move when comparing our tax rates to European countries. People frame their arguments in a light most beneficial to their points they are trying to make.

skinnymuch 5y ago
Yes well put. Exactly how it goes.

mooreds 5y ago

How about "X% of people paid no tax" which is really the meaning of this. Here's a page which talks about the effective tax rates of, as far as I can tell, all taxes people in the USA pay: https://itep.org/who-pays-taxes-in-america-in-2020/ https://itep.org/who-pays-taxes-in-america-in-2020/ This is far more useful for the discussion about how we pay for common goods than "61% of Americans pay no federal income taxes". (Never heard of ITEP before this, but they claim to be non-partisan, FWIW.)

ClumsyPilot 5y ago
We are missing the real juicy bit- top 0.1%
Qiu_Zhanxuan 5y ago
Nice ressource, if every country had that we could have a common ground on which to discuss wealth and income inequality

Berobero 5y ago

Also, "federal" here does not include not include payroll taxes, which are, nonetheless, considered "federal taxes" in any colloquial conception of the term. Of course, in addition to the lying by omission, the true irony here is that the "lack" of "federal" taxes paid by the masses is more so a symptom of a deeply inequitable economic system than the counterbalancing endorsement of the status quo the OP likely envisions it to be.

skinnymuch 5y ago
Your second paragraph and last sentences of the first paragraph are perfectly on point. If I wasn’t so worried I was saying something wrong, I would have seen this an hour ago and been able to just say what you wrote. As this is the actual crux of the matter.

throwawaycities 5y ago

I think you have it backwards. The extremely rich that might make millions or even billions a year but pay $0 income taxes love to play that game and muddy the water by saying they paid taxes…everyone in these contexts is talking about federal income taxes, not sales tax or property taxes. How about turn your question around and ask why the top CEOs (especially in tech) pay $0 federal income taxes claim they did pay taxes when they are referencing having paid sales tax, as if not paying sales tax is even a real issue, is in good faith.

deleted 5y ago
[deleted]
wbl 5y ago
There is no way to do that as a CEO. At best your stock holdings can rise, but your compensation will be taxed. The places where you can earn significant untaxed income are via real estate.
- throwawaycities 5y ago
  All those CEOs that take $0 or $1 salaries and then do press releases about it, how much do you think they are paying in taxes on that salary?
  - zsmi 5y ago
    Although you're totally correct I think you're underselling the complexity of the situation. On paper, the super rich (and even just merely "very" rich) can even show negative incomes [1] because they can a take very low interest-rate loan (which is in a way kind of tax, but paid to the bank) backed by their assets to pay expenses thus they can show no income and no realized capital gains. But, if you think about it, the practice is not all that different than taking out a home equity line on a house, for example. So whomever writes that law better be really careful or else the only ones who are going to get caught in that net are the middle class. Here is a nice article on the subject. https://www.bbc.com/news/business-57383869 https://www.bbc.com/news/business-57383869 [1] They would never actually do that because one needs to harvest that loss. They want to show $0 so they would sell something the balance the negative income out.

dec0dedab0de 5y ago

Because most people are smart enough to understand that they mean federal income tax. Especially when comparing the entire country, or talking about federal tax policy.

thoughtstheseus 5y ago

Do you pay sales tax on purchases? SALT deductions also reduced those paying federal taxes paid when they were still around. Agreed that people misunderstand it quite easily.

SquishyPanda23 5y ago

This is an odd line of reasoning. It's like responding to "Joe didn't pay for his main course at the restaurant" with "yeah but he paid for some of the appetizers."

wbsss4412 5y ago
The fault in your logic here is that in your metaphor joe ate the same as everyone else at the restaurant. The benefits of society as a whole are not equally shared. The wealthiest in society benefit the most from a functioning and stable federal bureaucracy.
- skinnymuch 5y ago
  Perfect response! Your profile is blank. If you’re up for it. Look at mine and send me an email. Every other comment I saw where I knew the comment was not logically sound but couldn’t quite word it right. You were there already having written a great response.
  - wbsss4412 5y ago
    Thank you for your comment! I’m going to consider reaching out, but I also like keeping my account pseudonymous so I’ll have to figure some things out.
    - skinnymuch 5y ago
      Of course, understand your concern. I haven’t updated my HN in forever. It is updated now. If you ever reach out as someone who discovered the community I co-founded or even just try it out. I nor any one else would ever know you are this current handle. Since there’s a few inquires a week and they range a lot.
- SquishyPanda23 5y ago
  > in your metaphor joe ate the same as everyone else at the restaurant. That's not anywhere in my metaphor. > The benefits of society as a whole are not equally shared. This is true but not relevant to my point. > The wealthiest in society benefit the most from a functioning and stable federal bureaucracy. This is less likely to be true and also not relevant to my point.

wang_li 5y ago

I've not looked for a new edition of the report but the CBO has put out reports that calculates net tax rates and more than half of the country are not federal net tax payers (this includes all federal taxes.) And more than 40% of them are so much not net payers that it offsets their entire non-federal tax burden. Ultimately a very large portion of Americans don't pay for any of government and government spending and services.

Joeri 5y ago
They do pay, they just get more back out. In a country without any redistribution of wealth and a perfectly efficient government everyone would be a net zero contributor to the government. In practice most countries have a few hubs where most of the wealth is created (typically coastal cities), and the taxes collected there fund the rest in the form of redistribution of wealth.
Frondo 5y ago
Nearly everyone in the US lives in a state with a sales tax (only five do not have a state-level sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon.) And, of course, nearly everyone buys something regularly, whether food or clothing or other necessities of life. It's 100% absurd and untrue to say "a very large portion of Americans don't pay for any of government" when most of us pay something every time we get a box of crackers or put gas in our tanks. And if you're going to follow up and clarify with a much narrower way that your statement could be taken to be true, then I'd like to know why you opened with "a very large portion of Americans don't pay for any of government" instead of that much more specific -- and much less "the poors are getting a free ride" -- statement.
- wang_li 5y ago
  You need to understand that I'm talking about net taxes. Referencing [0], the bottom 20% of households have a median market income of $15,800. They receive $9,600 in transfers and services. Their pre-tax income is $25,400 and they pay $800 in taxes. States and municipal taxes vary, but even high sales tax states and counties have rates of 15% or less. Let's call it 20% just to be extra generous in the discussion. Take their $24,500 in after tax dollars and spend every bit of it and pay 20% on all transactions. These households have paid $4,900 in non-federal taxes. So their net contribution across all levels of government is $4,900 - $9,600 = $-4,700. On a net basis, they don't pay for any part of the operations of the country at any level because the federal transfers pay for all of their non-federal tax burden. If you look at the second quintile and do the same math, you also get a negative result. Only at the middle quintile does it even become possible for them to spend so much locally that their local taxes offset the amount in transfers and services. I stand by my statement that a very large portion of Americans don't pay for any government. Assuming you consider ~40% of Americans to be a very large portion. I didn't say a majority, just a very large portion. Though it is possible that a majority of households don't pay for any government, depending on the specifics of their local tax rates and spending habits. If the middle quintile doesn't spend ALL their money at a local average tax rate of 12.8%, then they don't contribute either. 0. See page 31, table 1 of 2013 Distribution of Household Income and Taxes [pdf], https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/51361-householdincomefedtaxesonecol.pdf https://www.cbo.gov/sites/default/files/114th-congress-2015-...

jandrewrogers 5y ago

At the Federal level, it is more useful to talk about net taxes of all types. That is, taxes of all types paid to the Federal government (income, excise, payroll/social, etc) after subtracting all transfers and distributions to the taxpayer. This is a more accurate accounting of the situation. It paints a slightly different picture, but not that different. It turns out that only about 20% of taxpayers send more money to the government than they receive in aggregate across all forms of taxation and transfers. Another 20% of taxpayers roughly pay their own way, providing about as much tax revenue as they receive in transfers. 60% of taxpayers receive more in transfer payments and other distributions than they pay in taxes (not that surprising with things like Social Security). tl;dr: across all Federal taxes and transfer payments taken as net, 20% of taxpayers are paying taxes that are transferred to 60% of taxpayers. Individual States have diverse taxation structures, so the net taxpayer statistics likely vary widely.

commandlinefan 5y ago

> They read this as those people pay no taxes Nobody on earth would ever read "not paying federal taxes" as meaning also not paying social security, medicare, sales or property taxes.

skinnymuch 5y ago
Of course not sales tax. However for the rest, yes people would. People are quickly reading the stat. They aren’t thinking deeply or in a nuanced fashion. They aren’t on a forum like this. They are going about their day. You agree not everyone knows what payroll taxes specifically go toward or that there’s even a separation of federal income taxes and payroll taxes as distinct things, right?
svachalek 5y ago
Social Security and Medicare are federal taxes so hopefully some people are aware of that.

fallingknife 5y ago

Federal income taxes are the money that funds the federal government. The military, congress, FBI, courts, EPA, etc. Payroll taxes go to entitlement programs, so they are more similar to paying insurance premiums than actually funding the activities of the government.

RC_ITR 5y ago

Because almost everyone who purchases anything pays 'sales tax' and almost all homeowners pay 'property tax,' but the problem we care about is income/capital gains tax evasion.

skinnymuch 5y ago
If that’s the problem that is cared about. Are you saying going after the lower socioeconomic class of America is how to get back those evaded taxes? The narrative in general for the statistic is about lower socioeconomic people. If this was a good faith caring about tax evasion. Why would the focus be on the people with the least income and wealth? I don’t think it would be if that was really the problem being cared about. And yes the sales tax is part of the point. To give nuance to such a simple statistic.
- deleted 5y ago
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- AniseAbyss 5y ago
  We are going back to a time where the church and nobility are exempt from taxation and the monarch in desperation keeps squeezing the peasants.
- RC_ITR 5y ago
  Yeah, Brookings or whatever cesspool that made this left out those taxes as part of their narrative. I included them to counter that narrative and the you RAN with my intent. EDIT: To that point, you can absorb statistics from an organization but still disagree with their editorializing.

cactus2093 5y ago

I don't really see how it misleads the argument in a way that would be considered bad faith. But I do agree focusing on the $0 number does seem kind of arbitrary. A better metric might be percentage of the total tax burden paid by the bottom 50% of the income distribution. Maybe that is 0% if you look purely at federal income tax, and maybe it rises to something like 5% if you include all the other taxes you mention. But I don't think it changes the picture significantly.

suzzer99 5y ago

The funniest part is that a good chunk of the people who pass along this link in grievance are probably in the group that technically pays no income tax, and don't even realize it.