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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

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-...

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-...