Chart of the Week: Nearly Half of All Americans Don’t Pay Income Taxes

Another eye-popping number was the percentage of Americans who don’t pay income taxes, which now accounts for nearly half of the U.S. population. Meanwhile, most of that population receives generous federal benefits.

http://blog.heritage.org/2012/02/19/char....

Not breaking - was old last year.

That is my goal for next year. Work less, just under the boundary where I will owe 1 cent in Fed income taxes.

And surprisingly we're 40% short on tax revenue vs. spending when we try and provide the same level of benefits to all regardless of payments in.

No free lunch I guess.

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Another eye-popping number was the percentage of Americans who don’t pay income taxes, which now accounts for nearly half of the U.S. population.

Unfortunately, when you add the 21+ Million government employees who pay ZERO in taxes, then it's quite a bit over half.

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Another eye-popping number was the percentage of Americans who don’t pay income taxes, which now accounts for nearly half of the U.S. population. Meanwhile, most of that population receives generous federal benefits.

Yep. 51% pay no federal income tax and most of them receive extremely costly federal benefits.

That's totally sustainable, really... no problem there...

Daddy Warrenbucks will pay taxes for us all.

100 years ago it was 100%.

Did my federal taxes last weekend and, damnit, I paid taxes again last year. Where are my benefits?

The smell of class warfare in the morning.

To clarify, does this mean that if you paid in during the year, and you get a refund, you are in the didn't pay category?

Steel: yes. Talking about net payments for the tax year, including refunds/rebates.

But remember, this does not include payroll taxes. Strictly income taxes and all refunds/rebates applied.

Ahh, well then this makes more sense.

Get rid of the Child Tax credit and this number will change a good 10%+ immediately I would think.

How about we tax those who do pay federal income tax at a lower rate, and stop subsidizing the exponential increase of the welfare-dependent population?

Or... do we really want this...

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But remember, this does not include payroll taxes.

Those who do not pay payroll taxes do not qualify for SS and Medicare. So they're not taxed as such, but then aren't eligible to receive those benefits, either.

That's kind of tangential. But ok.

Just pointing out that the study is not considering that some part of that 49.5% do pay payroll taxes, and this study is only looking at net income taxes.

Do with that what you will.

It's not tangential. Some people get stuck on focusing on payroll taxes, forgetting that those who don't pay payroll taxes (the über-rich who supposedly only pay the capital gains tax rate of 15%) likewise do not qualify for SS and Medicare benefits.

You're free to think about payroll taxes as going into a lockbox, thoughtfully invested by the government for your retirement. In that case, they aren't really taxes.

I never said anything about a lockbox. The obvious implication is that the über-rich who do not pay payroll taxes likewise do not draw the corresponding costly government benefits.

That's patently untrue as well.

You just have to earn any salary wages for 10 years to qualify for both SS and Medicare. All the super-wealthy I'm sure had (big) salaries for at least 10 years of their life. Not that they *use* Medicare, but they definitely can.

Also, SS benefits get paid back at 90%/32%/15% steps based on your lifetime payroll-taxed income, so your wages later in life have pretty limited effects on your monthly SS check. I'm sure Buffett collects here too and collects a fairly decent amount, probably a solidly higher % of what he put in than I would get as a % of what I put in.

The people who take the hardest screwing on SS/Medicare are those who earn a high wage income their whole life.

My payroll taxes at this point are earning me pretty small marginal benefits, even assuming the programs exist in the same form in the future.

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You just have to earn any salary wages for 10 years to qualify for both SS and full Medicare.

So... you'd have paid payroll taxes. And you would get the benefit(s) for which you qualified. No different than anyone else.

Buffett paid payroll taxes, no? He would qualify and receive the same benefits as anyone else who paid what he did.

I don't see anyone getting away with anything except for the 51% who pay no federal income tax whatsoever.

Sigh.

The whole point is that you can't just ignore payroll taxes, even for low wage earners, because you "get something back later".

Even someone making minimum wage for 10 years gets no added benefit for every Medicare tax dollar after that. That's just a tax like the income tax.

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The whole point is that you can't just ignore payroll taxes, even for low wage earners, because you "get something back later".

The point is that the same exact rules apply to everyone regarding payroll taxes and corresponding benefits.

That is NOT true of the federal income tax. 51% pay no federal income tax whatsoever, and a majority of those receive a significant amount of costly government benefits and services.

Every one of those receives costly government services.

Themortgage - not true, I will not pay any income tax this year, completely legitimately! For the last few years my theory has been, it's not how much you make, but how much you keep and spend. I have met many that are in my camp, why take the risk when the govt becomes a 40% partner with no risk! I have thought through my income and expenses very thoroughly and I can project, I will not pay taxes for the foreseeable future. I am someone that has paid more in taxes in the past in one year than most pay in their whole life combined! It sure feels great! Not a leech, but not paying for all this bs either! You would be surprised how many of me are out there....