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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

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.
  - TameAntelope 5y ago
    Yep, I was 100% wrong, and felt I should bow out of the conversation as a result. I left in the research that made me discover how incorrect I was, to help guide others.
    - lisper 5y ago
      It is customary in cases like this not to delete the erroneous comment but rather to add an [UPDATE] tag at the end to add a correction. This keeps the original thread of the conversation intact. There is no shame in making mistakes. Everyone does it.
      - deleted 5y ago
        [deleted]
      - TameAntelope 5y ago
        I don't agree for a number of reasons, but mostly that I don't think "custom" alone is a good reason to do literally anything. But I respect your opinion, and I hope you are able to forgive me.
    - skinnymuch 5y ago
      You should add an update to the 43% comment as well to say that percent is only true for 2020 and 2021. Every other year it is usually below 25%. Including going into the future with their simulation. I find a technically correct statistic that helps the same narrative as the incorrect/wrong stat is possibly even worse. Like the sibling said. It should be an update or edit. Not a change of the comment entirely. Hope you can make that change as there are a lot of comments that have replied to you. Cheers for acknowledging you made a mistake. Like many others. That is sometimes hard for me to admit.
wbsss4412 5y ago
Note the jump from 2019 to 2020. 25% in 2019 to that 43% figure you note here. That’s fairly important context. 43% is not a typical number, and as you can see in the report, it is expected to return to baseline quickly.
boulos 5y ago
That's not what your link says. The final rows are "don't pay either" (20% of tax units). The one you quoted is from the 2020 data for "Zero or Negative Sum of Income and Payroll Taxes". Your total tax liability can become zero, even post the 7-ish% Social Security and such, due to the EITC and so on. For example, if you make $20,000 / yr but have two children (made up numbers), you probably end up with a sum of zero.
- TameAntelope 5y ago
  What does a "sum of zero" mean, in "dollars paid to the US government overall"?
  - boulos 5y ago
    The $300-600/week/person benefit counts as part of that sum (plus the one off checks). So you could have Federal taxes of say $2000 and then benefits of $10000, resulting in a net transfer (sum of "zero" is probably not right, <= zero).
skinnymuch 5y ago
Edit: I just looked at this and other articles. They all say to be aware of how isolated 2020 and 2021 are due to the stimulus. I believe it is bad faith to put 43% as the number when for every other year, the number is usually below 25%. EDIT: This to me is another indicator of the narrative pushing and stat specifying that muddies the waters. —- It would be quite helpful if the net worth/wealth of individuals who don’t pay either is given as well. When that 43% figure is pointed out. Generally people only think of lower economic class people. Not situations like the previous president not paying taxes for a number of years. Otherwise all these stats still do not change my original point that they all muddy the waters and people assume the stats are only referring to lower income individuals or “leeches” who are of lower socioeconomic levels too.
- LorenPechtel 5y ago
  There's also the early-pandemic dip. The stock gains aren't nearly so dramatic when you look at the bigger picture.
newbamboo 5y ago
Could many of these people be retirees? It takes a lot of wealth to retire and then you don’t pay income tax.
- missedthecue 5y ago
  Only 16.5% of the population is over 65 years old. And many retirees do pay income tax. So most of this number is not retirees.
  - adgjlsfhk1 5y ago
    once you combine that with 16 and under, you are getting most of it.
  - newbamboo 5y ago
    I said “many” not “all.” The question I have is how to have policies that don’t hurt that 16.5%. It seems unfair to go after the elderly and take away the money they have worked hard to save. They are already being hurt by inflation, which sits at about 5%.
tomrod 5y ago
Original comment from parent: > They do not pay Federal Payroll Taxes, because those are considered Federal Income Taxes. Why would they be different? Taxes come out of their paycheck, of which they get back from the government when their taxes are due. > The point is 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 (though they do pay as a result of sales and other taxes). Payroll taxes are paid by the employer.
- nobody9999 5y ago
  >Payroll taxes are paid by the employer. Half of payroll taxes are paid by the employer. The other half are paid by the employee. And if the employer wasn't paying that half, they might pay at least some portion of that to the employee. And employers don't pay any payroll tax for non-employees.
  - tomrod 5y ago
    Sort of at the Federal level (though these tend to colloquially be understood/communicated as "income taxes" despite being de jure FICA/payroll). This _isn't_ true at the state level, where payroll taxes may be paid by an employer and not the employee. In the end it is a wash.
    - nobody9999 5y ago
      >This _isn't_ true at the state level, where payroll taxes may be paid by an employer and not the employee. That's not true in my state. >In the end it is a wash. Not even close. Show me a state that has combined (employer/employee) payroll taxes of 15.3%. What's that? No state comes anywhere close to that? Not a wash by a long shot.
      - tomrod 5y ago
        In your effort to create a false dichotomy you have ignored several factors and points. 15.3% is the FICA factor (assuming not above income cap), split evenly between employer and employee. Add on top how the state, municipalities, school districts extract their payroll/income taxes, which can be 100% on employee, 50% on employee, 0% on employee, or none of the above. In Texas, it is 100% on employer. In Ohio, the split mixes and matches with some of the entities charging the employer and employee. Ergo, it's not always a 50/50 split between employee and employer. In the end, it is a wash whether applied to employer or employee. FICA extracts the same amount, and other entities will extract their amount. Reduction by the employee or employer via credits are typically not feasible or are strongly engineered against. Thanks, and this is my last comment on this thread. Have a good day.

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.
- TameAntelope 5y ago
  Yep, I was 100% wrong, and felt I should bow out of the conversation as a result. I left in the research that made me discover how incorrect I was, to help guide others.
  - lisper 5y ago
    It is customary in cases like this not to delete the erroneous comment but rather to add an [UPDATE] tag at the end to add a correction. This keeps the original thread of the conversation intact. There is no shame in making mistakes. Everyone does it.
    - deleted 5y ago
      [deleted]
    - TameAntelope 5y ago
      I don't agree for a number of reasons, but mostly that I don't think "custom" alone is a good reason to do literally anything. But I respect your opinion, and I hope you are able to forgive me.
  - skinnymuch 5y ago
    You should add an update to the 43% comment as well to say that percent is only true for 2020 and 2021. Every other year it is usually below 25%. Including going into the future with their simulation. I find a technically correct statistic that helps the same narrative as the incorrect/wrong stat is possibly even worse. Like the sibling said. It should be an update or edit. Not a change of the comment entirely. Hope you can make that change as there are a lot of comments that have replied to you. Cheers for acknowledging you made a mistake. Like many others. That is sometimes hard for me to admit.

wbsss4412 5y ago

Note the jump from 2019 to 2020. 25% in 2019 to that 43% figure you note here. That’s fairly important context. 43% is not a typical number, and as you can see in the report, it is expected to return to baseline quickly.

boulos 5y ago

That's not what your link says. The final rows are "don't pay either" (20% of tax units). The one you quoted is from the 2020 data for "Zero or Negative Sum of Income and Payroll Taxes". Your total tax liability can become zero, even post the 7-ish% Social Security and such, due to the EITC and so on. For example, if you make $20,000 / yr but have two children (made up numbers), you probably end up with a sum of zero.

TameAntelope 5y ago
What does a "sum of zero" mean, in "dollars paid to the US government overall"?
- boulos 5y ago
  The $300-600/week/person benefit counts as part of that sum (plus the one off checks). So you could have Federal taxes of say $2000 and then benefits of $10000, resulting in a net transfer (sum of "zero" is probably not right, <= zero).

skinnymuch 5y ago

Edit: I just looked at this and other articles. They all say to be aware of how isolated 2020 and 2021 are due to the stimulus. I believe it is bad faith to put 43% as the number when for every other year, the number is usually below 25%. EDIT: This to me is another indicator of the narrative pushing and stat specifying that muddies the waters. —- It would be quite helpful if the net worth/wealth of individuals who don’t pay either is given as well. When that 43% figure is pointed out. Generally people only think of lower economic class people. Not situations like the previous president not paying taxes for a number of years. Otherwise all these stats still do not change my original point that they all muddy the waters and people assume the stats are only referring to lower income individuals or “leeches” who are of lower socioeconomic levels too.

LorenPechtel 5y ago
There's also the early-pandemic dip. The stock gains aren't nearly so dramatic when you look at the bigger picture.

newbamboo 5y ago

Could many of these people be retirees? It takes a lot of wealth to retire and then you don’t pay income tax.

missedthecue 5y ago
Only 16.5% of the population is over 65 years old. And many retirees do pay income tax. So most of this number is not retirees.
- adgjlsfhk1 5y ago
  once you combine that with 16 and under, you are getting most of it.
- newbamboo 5y ago
  I said “many” not “all.” The question I have is how to have policies that don’t hurt that 16.5%. It seems unfair to go after the elderly and take away the money they have worked hard to save. They are already being hurt by inflation, which sits at about 5%.

tomrod 5y ago

Original comment from parent: > They do not pay Federal Payroll Taxes, because those are considered Federal Income Taxes. Why would they be different? Taxes come out of their paycheck, of which they get back from the government when their taxes are due. > The point is 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 (though they do pay as a result of sales and other taxes). Payroll taxes are paid by the employer.

nobody9999 5y ago
>Payroll taxes are paid by the employer. Half of payroll taxes are paid by the employer. The other half are paid by the employee. And if the employer wasn't paying that half, they might pay at least some portion of that to the employee. And employers don't pay any payroll tax for non-employees.
- tomrod 5y ago
  Sort of at the Federal level (though these tend to colloquially be understood/communicated as "income taxes" despite being de jure FICA/payroll). This _isn't_ true at the state level, where payroll taxes may be paid by an employer and not the employee. In the end it is a wash.
  - nobody9999 5y ago
    >This _isn't_ true at the state level, where payroll taxes may be paid by an employer and not the employee. That's not true in my state. >In the end it is a wash. Not even close. Show me a state that has combined (employer/employee) payroll taxes of 15.3%. What's that? No state comes anywhere close to that? Not a wash by a long shot.
    - tomrod 5y ago
      In your effort to create a false dichotomy you have ignored several factors and points. 15.3% is the FICA factor (assuming not above income cap), split evenly between employer and employee. Add on top how the state, municipalities, school districts extract their payroll/income taxes, which can be 100% on employee, 50% on employee, 0% on employee, or none of the above. In Texas, it is 100% on employer. In Ohio, the split mixes and matches with some of the entities charging the employer and employee. Ergo, it's not always a 50/50 split between employee and employer. In the end, it is a wash whether applied to employer or employee. FICA extracts the same amount, and other entities will extract their amount. Reduction by the employee or employer via credits are typically not feasible or are strongly engineered against. Thanks, and this is my last comment on this thread. Have a good day.