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> 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://w

> 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...
  - JamesBarney 5y ago
    The report says that the % of people(tax units) who didn't pay either in 2020 was 20.5%. The 43.3% was the % of tax units that had a net negative income and payroll taxes (thought I doubt this included the employer side of the tax which for economics purposes falls on the worker). But that was also the Covid year. Most years it's 25%-22%, which doesn't seem high for the poor, the disabled, and the retired.
  - deleted 5y ago
    [deleted]
  - skinnymuch 5y ago
    I do not understand your point. The parent is saying FICA/payroll taxes are 36%. That’s revenue for the federal government and some of it is spent by the federal govt. So I do not understand your first sentence. Maybe you can clarify.
  - lisper 5y ago
    > Why would they be different? It doesn't make a lot of sense, but the fact of the matter is that the phrase "income tax" as commonly used does not include payroll taxes. "Income tax" refers only to the tax on "taxable income", i.e. your net income after deductions and credits. Payroll tax, by way of contrast, is taken from the very first dollar you make, so the only way you can avoid paying that is if you are unemployed. Saying that "61% of Americans do not contribute to the pool of money that is spent by the federal government as a result of their income" is tantamount to saying that 61% of Americans are unemployed, which is plainly not the case. (BTW, "income" in the sense of "income tax" does include dividends and capital gains, which are not subject to payroll taxes. So it is possible to make millions while unemployed and pay no payroll taxes. That is actually not uncommon. In fact, it's the norm among retired people.)
    - Jtsummers 5y ago
      For others, lisper is replying to the original version of the GP comment which stated that federal income and payroll taxes were one and the same for the 61% number.
- realce 5y ago
  Thank you.
- cptskippy 5y ago
  > they do pay Federal Payroll Taxes The 36% on that chart is labeled "SOCIAL INSURANCE (PAYROLL) TAXES". Are you suggesting the employer pays these taxes?
skinnymuch 5y ago
Right and so what does saying this achieving? There is still so much nuance as to, in my opinion, make this fact practically useless. There’s no breakdown of capital gains taxes. Or how much taxes are not captured because of loopholes or tax benefits that go to this segment or that segment of income level or wealth. OTOH, I don’t know how many services come from local government that isn’t the federal government. These are simplified examples/points. The point remains both the original stat and this one portray a skewed narrative. I don’t think this changes anything for my original comment. One could say it even bolsters the case as it is another example of how misleading a quick stat can be.
- dntrkv 5y ago
  > There is still so much nuance as to, in my opinion, make this fact practically useless. Agreed, and so is the title of the thread we are discussing. > The wealthiest 10% of Americans own a record 89% of all U.S. stocks
  - skinnymuch 5y ago
    Why is the title to the thread just as practically useless? It seems less useless to me. It is at least giving some semblance of the high levels of wealth inequality.
- xwolfi 5y ago
  But the thing is that if americans who don't pay taxes don't own stocks and americans who build most of the social system, the top 10% who pay all those taxes, also own stocks, it might compel someone to say... thanks, rather than "fuck you"... ? I don't know, if you just redistribute ALL the wealth by murdering the 10% to the rest, what do you think will happen to the taxes ? What will happen to all that "the rich don't pay enough", when actually they paid everything, when it's time for YOU to pay ? I think that's what all these people in the thread hint at.
  - MuffinFlavored 5y ago
    > the top 10% who pay all those taxes, Do you have any sources around this info?
colinmhayes 5y ago
So 50% of the Federal government's income is taxes that every working American does pay.
- StevePerkins 5y ago
  "Money spent" != "income". The other 50% is deficit spending.
  - colinmhayes 5y ago
    Look at the chart again. It's revenue, not spending.
- missedthecue 5y ago
  There are also corporate taxes and estate taxes, and payroll taxes of which the employer must pay half.
  - colinmhayes 5y ago
    corporate and payroll taxes are all paid by employees depending on elasticity, their income would be higher if the taxes didn't exist. True for estate tax.
    - eigen 5y ago
      I dont know anyone that got a substantial pay raise in 2017 when the corporate tax rate went from 35% to 21%. I also dont remember prices declining. are you sure that corporate taxes are paid by the employee and lowering taxes results in higher pay and lower prices?
      - renewiltord 5y ago
        Yeah, the personal income elasticity with respect to those taxes doesn’t seem appreciable.
      - 5y ago
sdfjksbdf 5y ago
100% of the USDs that the federal government spends originate from the federal government. Money doesn't grow on taxpayers.
- imtringued 5y ago
  In fact, it's the citizens responsibility to return the dollars via taxation... One way to interpret government debt is that money is a claim to the entire economy of the country and thus money does not create real wealth, it just makes real wealth liquid.

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...
- JamesBarney 5y ago
  The report says that the % of people(tax units) who didn't pay either in 2020 was 20.5%. The 43.3% was the % of tax units that had a net negative income and payroll taxes (thought I doubt this included the employer side of the tax which for economics purposes falls on the worker). But that was also the Covid year. Most years it's 25%-22%, which doesn't seem high for the poor, the disabled, and the retired.
- deleted 5y ago
  [deleted]
- skinnymuch 5y ago
  I do not understand your point. The parent is saying FICA/payroll taxes are 36%. That’s revenue for the federal government and some of it is spent by the federal govt. So I do not understand your first sentence. Maybe you can clarify.
- lisper 5y ago
  > Why would they be different? It doesn't make a lot of sense, but the fact of the matter is that the phrase "income tax" as commonly used does not include payroll taxes. "Income tax" refers only to the tax on "taxable income", i.e. your net income after deductions and credits. Payroll tax, by way of contrast, is taken from the very first dollar you make, so the only way you can avoid paying that is if you are unemployed. Saying that "61% of Americans do not contribute to the pool of money that is spent by the federal government as a result of their income" is tantamount to saying that 61% of Americans are unemployed, which is plainly not the case. (BTW, "income" in the sense of "income tax" does include dividends and capital gains, which are not subject to payroll taxes. So it is possible to make millions while unemployed and pay no payroll taxes. That is actually not uncommon. In fact, it's the norm among retired people.)
  - Jtsummers 5y ago
    For others, lisper is replying to the original version of the GP comment which stated that federal income and payroll taxes were one and the same for the 61% number.
realce 5y ago
Thank you.
cptskippy 5y ago
> they do pay Federal Payroll Taxes The 36% on that chart is labeled "SOCIAL INSURANCE (PAYROLL) TAXES". Are you suggesting the employer pays these taxes?

skinnymuch 5y ago

Right and so what does saying this achieving? There is still so much nuance as to, in my opinion, make this fact practically useless. There’s no breakdown of capital gains taxes. Or how much taxes are not captured because of loopholes or tax benefits that go to this segment or that segment of income level or wealth. OTOH, I don’t know how many services come from local government that isn’t the federal government. These are simplified examples/points. The point remains both the original stat and this one portray a skewed narrative. I don’t think this changes anything for my original comment. One could say it even bolsters the case as it is another example of how misleading a quick stat can be.

dntrkv 5y ago
> There is still so much nuance as to, in my opinion, make this fact practically useless. Agreed, and so is the title of the thread we are discussing. > The wealthiest 10% of Americans own a record 89% of all U.S. stocks
- skinnymuch 5y ago
  Why is the title to the thread just as practically useless? It seems less useless to me. It is at least giving some semblance of the high levels of wealth inequality.
xwolfi 5y ago
But the thing is that if americans who don't pay taxes don't own stocks and americans who build most of the social system, the top 10% who pay all those taxes, also own stocks, it might compel someone to say... thanks, rather than "fuck you"... ? I don't know, if you just redistribute ALL the wealth by murdering the 10% to the rest, what do you think will happen to the taxes ? What will happen to all that "the rich don't pay enough", when actually they paid everything, when it's time for YOU to pay ? I think that's what all these people in the thread hint at.
- MuffinFlavored 5y ago
  > the top 10% who pay all those taxes, Do you have any sources around this info?

colinmhayes 5y ago

So 50% of the Federal government's income is taxes that every working American does pay.

StevePerkins 5y ago
"Money spent" != "income". The other 50% is deficit spending.
- colinmhayes 5y ago
  Look at the chart again. It's revenue, not spending.
missedthecue 5y ago
There are also corporate taxes and estate taxes, and payroll taxes of which the employer must pay half.
- colinmhayes 5y ago
  corporate and payroll taxes are all paid by employees depending on elasticity, their income would be higher if the taxes didn't exist. True for estate tax.
  - eigen 5y ago
    I dont know anyone that got a substantial pay raise in 2017 when the corporate tax rate went from 35% to 21%. I also dont remember prices declining. are you sure that corporate taxes are paid by the employee and lowering taxes results in higher pay and lower prices?
    - renewiltord 5y ago
      Yeah, the personal income elasticity with respect to those taxes doesn’t seem appreciable.
    - 5y ago

sdfjksbdf 5y ago

100% of the USDs that the federal government spends originate from the federal government. Money doesn't grow on taxpayers.

imtringued 5y ago
In fact, it's the citizens responsibility to return the dollars via taxation... One way to interpret government debt is that money is a claim to the entire economy of the country and thus money does not create real wealth, it just makes real wealth liquid.