Why Do Half of Americans Pay No Federal Income Tax?

You may have heard the claim that about half of Americans pay no federal income tax. That’s a true fact. My Tax Policy Center colleagues estimate, for example, that 46% of households either will pay no federal income tax in 2011 or will receive more from the IRS than they pay in.

Today, TPC released a new study that examines why these people end up paying no federal income tax.

The number one reason should come as no surprise. It’s because they have low incomes. As my colleague Bob Williams notes:

A couple with two children earning less than $26,400 will pay no federal income tax this year because their $11,600 standard deduction and four exemptions of $3,700 each reduce their taxable income to zero. The basic structure of the income tax simply exempts subsistence levels of income from tax.

Low incomes (or, if you prefer, the standard deduction and personal exemptions) account for fully half of the people who pay no federal income tax.

The second reason is that for many senior citizens, Social Security benefits are exempt from federal income taxes. That accounts for about 22% of the people who pay no federal income tax.

The third reason is that America uses the tax code to provide benefits to low-income families, particularly those with children. Taken together, the earned income tax credit, the child credit, and the childcare credit account for about 15% of the people who pay no federal income tax.

Taken together, those three factors — incomes that fall below the standard deduction and personal exemptions; the exemption for most Social Security benefits; and tax benefits aimed at low-income families and children — account for almost 90% of the Americans who pay no federal income tax.

For further details and info about the other 10%, please see the study.

P.S.: The true fact — about half of Americans do not pay federal income taxes — often gets transmogrified in public discourse into the decidedly untrue claim that half of Americans pay no taxes. That simply isn’t so. There are many other taxes in our fair land, including payroll taxes, excise taxes, sales taxes, state income taxes, and property taxes. Most people who don’t pay federal income taxes still encounter some of these other taxes.

136 thoughts on “Why Do Half of Americans Pay No Federal Income Tax?”

  1. “A couple with two children earning less than $26,400…”

    There is absolutely no way I could pull that off where I live. I am sure there are parts of the country where that happens, but that is a really low number for four people. I fear to think how I would be able to make ends meet in such a situation.

    1. I make less then $17,000 (usually between 10,000 and 15,000) a year doing temp work and collecting unemployment when I’m not working. I have 2 small children under age 6. I rent a 2 bedroom apartment in Philadelphia PA and pay my own utilities. I also get foodstamps and medical for my children as my only benefits. It’s hard to make ends meet especially around holidays and birthdays but it can be done. I don’t think people realize how many things they could live with out if they really really had to. My kids are happy though. They eat 3 times a day (even if I occassionally have to skip a few meals) and I even have a dog and a cat who get fed on a regular basis. It is possible. 🙂

      1. Do you have a husband? Does the father of your children pay you maintenance.

      2. Your entire income is basically tax-exempt with your personal and child deductions. I suspect your apartment is either rent-controlled or in a very low-income area, because in the county where I live, even a scrappy 1-bedroom or studio rents for around $1000. The counties around are the same. Property taxes for the median home exceed $10,000 a year. Furthermore, your food stamps are paid for with someone else’s tax money(and probably provide the equivalent of another $10,000 or more of pre-tax income), as is the medical coverage for your children. All said, you have the equivalent of at least $30.000 income of a single person with no itemized deductions, perhaps even a bit more.

        Don’t mean to rain on your happiness, but it isn’t possible to live on $17,000 a year without substantial government(or other) assistance, especially if you have children. Even a single person making $30,000 with no dependants can find it difficult to live above the poverty line in some parts of the country.

      3. It is not impossible to raise children and live without much or any assistance. Take away cable, internet, dining out, and other stuff and you can easily live cheap. I was making under 30k and no assistance with 2 children and it was easy to do. I made all my meals from scratch and bought lots of canned food. That lasts a while, so buy it on sale or with coupons. Just have things that you NEED and it’s not hard at all. There has always been that saying to ‘live by your means’ so don’t spend what you don’t have. Even when I was single with no children, I had PLENTY of extra money to have my own place with nothing included and it was a nice place and I had stuff. I also spent plenty on extra stuff. So no one should really complain that it isn’t possible. You haven’t tried if you think it isn’t.

      4. She doesn’t have to “spend what she doesn’t have” because everyone completely dependent on the government can spend other people’s money.

        Where is the other side of the story? All of the people that were hurt because you took money that was stolen from someone else.

        It is one thing to be charitable and take care of the small 1% of the population with extreme disability; the people who can not fend for themselves due to no fault of their own. It is quite another when 51% of the population pays NO income tax, contributes virtually nothing, and leaches off of the other 49%, yet also consumes the vast majority of the social services.

        When a society continually takes from the “haves” that work to provide a better life for themselves and their families, in order to subsidize the “have nots”, eventually everyone will have nothing. How could it possibly incentivise hard work, ambition, and economic growth when the harder you work the more is STOLEN from you and given to someone who didn’t work for it?

        This is not a hard concept to understand. 3 year-olds recognize what is fair and what isn’t. We teach our children not to steal. If the neighbor has 3 cars, is it ok to take one because “he is rich and can afford it”? If their kid has a new XBox, do we tell our children that it is ok to take it because their family can just go buy a new one? Of course not. It is immoral and illegal. But when the government effectively takes that person’s property and gives it to someone else it is somehow justified and everyone can sleep well at night because they didn’t have to physically steal it for themselves. The Government middlemen (IRS) absolves “have nots” of the ethical dilemma of getting something they never deserved or earned.

      5. I don’t understand. You have a dog and a cat ,that you have to support and you make less then $17,000 a year and receive food stamps and medical for the kids. It cost money to take care of two pets ( food and medical). You can’t take care of your kids with the income you make without foodstamps and you spend your real money on two pets..???? This is why you and millions of people in the U.S. do not need stamps because of the choices you ( they ) make in life.

      6. Congrats! Be proud that you can work hard and support your children. The rest of the comments were one-sided and stupid. To think that you “receive” more from the government than someone making $100k or $1 million per year is just silling. Most government benefits are paid to the rich and most government systems (law, legal, trade pacts, transportation systems (not public) as well as programs (e.g., energy research, etc.) benefit the rich to a much greater degree.

        Bottom line – why do people come to the US to build businesses and create? Because our laws & regulations benefit the rich enabling them to keep more of what they create. In return, these business people have to pay for the systems that allowed them to suceed …

    2. “A couple with three children earning less than $23,000…”

      My parents provide for us pretty well. We live in a nice house, pretty big compared to some of my friends who live in areas where each house looks the same as the one before it. We don’t use any government welfare programs. We have home phone, internet, wireless and directv, and three cars, one which we just bought a few months ago, and we make ends meet, no problem. We might even be going on a family trip this summer. I think it’s because we’re frugal spenders on everything else. We don’t feel the need to go around buying gadgets and other pricy items. It’s all about how you use your money, making the decision to not splurge everytime you go to the mall.

      1. hun you’re parents aren’t making 23 k after taxes they’re not. that’s impossible to live that way especially with 3 kids. your mortgage for that house is at least 600 a month. That’s 7,200 gone just right there. Your heat, air condition, and water is prob at least 150 assuming you’re in a 3 bedroom at least? That’s 1,800 gone. Then food for the month assuming you eat 3 meals a day is at least 400 a month with 5 people in the house. That’s 6,000 gone. Since there are 5 of you again, you’re at least getting about $35 dollars of gas each week a month if you go places and since you have 3 cars. That’s 140 a month, that’s another 1,680 gone. Just with basic expenses that’s 16,680 gone. And you’re telling me you all can afford a summer trip on 6,320 dollars to make it throughout the year and to have your trip? Yea right..

  2. The numbers are incredibly skewed by the arbitrary decision to separate payroll taxes (both employee and employer portions) from income taxes. If it was all considered together, people would have a very different picture of what portion of federal tax revenue is collected from different economic groups.

    1. Payroll or Social Security is escrowed to your SS# for future payout to you. It was never intended as a tax for the general fund. It is part of your “forced” pension fund!

      1. Sorry John A, but SSI, and medicare are taxes to pay for people who are currently retired and on disability. Social Security is NOT a pension plan. The government can change those laws at any time and wouldn’t have to pay you anything. It’s a TAX, that’s why it is called a payroll tax. The funds received are included in the general budget and that is how Clinton had a ‘surplus’. They counted Social Security and Medicare income in the budget instead of separating it out. The government wants you to think its a retirement plan, so you won’t gripe about the tax.

      2. Irish, saying the word Clinton in that context gives me a pain. It was Reagan who decided to juice the books by adding SS to the general fund to make his deficits look better.

      1. Depends on what state you live in. Some states do not tax social security.

    1. My social security is taxed because I have earned income from full time employment. Earned income makes your benefit taxable. Dividends and business income do not.

  3. I hate that argument about the federal income tax. It doesn’t include SS and MC. It also doesn’t include local, state, excise, sales, tolls, fees etc. etc. It’s a tired old argument made up of nothing but half truths. More misinformation from the people who own it all and want more. The lowest quintile which makes about 3.5% of all US income, pays about 2% of all taxes (state, local fed etc). The top 1% pay about 20% of all taxes but here’s the kicker, they get about 20% of all income. Seems pretty flat to me. Here’s the good part, the top 50% take home 85% of US income. The bottom 50% get to fight over scraps. What a socialist country eh?

      1. Sounds like JB would like to live in Greece. Don’t work, no problem, let the working guys pay for your cigarettes and beer. Oh, oops, that didn’t work out too great for them did it? If you can not afford to raise your child…… don’t keep having more for me to pay for. I pay for my children, stayed married to their father( not fathers) and we work our bums off to provide for them and their future. But we also pay for the no workers children. That’s not right.

      2. Pay attention, JB is saying that the working class supports the country. The working class meaning the middle class. It doesn’t make sense that low income gets more than they pay, high income gets tax write offs, and middle class gets the short stick. If you have kids and pay child support you don’t get a deduction but the parent using that free money to support the child gets tax credit? And why is it that when someone tells the truth about the system they are from another country?

  4. But if you want to include payroll taxes then you’ll open up the discussion of how Social Security is a bankrupt ponzi scheme rather than an actual pension program…

  5. S.S. is neither retirement program nor a “ponzi scheme, but an insurance program that at least assures some kind of floor for everyone by serving as only one of three legs of the economic stool, so I don’t have to live in a country where the old and frail are allowed to starve in the streets.

    Of course, in our current Randian fantasyland shedding ourselves entirely of these last vestiges of a civilized society will solve all problems.

    1. Social Security is not guaranteed. Is it in the Constitution? Wait Constitutional rights are being stripped away, so nothing is guaranteed. Didn’t you guys get the memo. Wake up. If house take away the Constitution that what kind of society are we living in?

      1. So the US govt will default on bonds? SS is only allowed to invest in US govt bonds. Therefore, you are implying that SS will default due to bankruptcy of the US govt. We’re a long way from that. Just playing the odds here, but there’s a good chance you live below the Mason Dixon line. That kind of doom saying is very popular in the South. Ties right in with the preachers always calling for Jesus to return and smite those evil Demonocrats who want to feed the hungry and care for the sick.

  6. Nor is Social Security, or any other federal program, bankrupt. Since the United States is sovereign in its own currency, it can never be bankrupt. As a monopoly issuer of the currency that all its obligations are denominated in, the U.S. government can never be forced into default. The only way that we can fail to meet our obligations, Social Security or otherwise, is if we do so voluntarily.

    As we appear to be doing now.

    1. America is not bankrupt? The current value of the American land mass and total assets sre right around $17 Trillion. Check this out and tell me again America is not bankrupt, or at least close to it: http://www.usdebtclock.org/index.html
      The value of one U.S. dollar is about .17 cents (that’s some buying power, isn’t it?). The gov’t. has to borrow .40 cents of every dollar it spends.

      1. Sir, you have managed to state that a dollar is worth 17% of a dollar. That’s a logical spiral that leads one to conclude that you aren’t all there. I’d suggest you do something about clarifying.

    2. Check out the weimar republic in Germany in the 1920’s and you will understand what happens when a government borrows more that the economy can pay back through taxes. The currency is inflated to the point that confidence in the whole economy is destroyed. We are years away from that but moving steadily faster in that direction.

  7. Your first reason is a disingenuous statement. Yes, if you make $26,400 you won’t pay federal income taxes, you also won’t if you make $2. However, couples with 2 children under age 17 making up to $50,000 can ALSO avoid income tax. Nearly double what you state in your article.

    Additionally, nearly 22% of Americans making between $50,000 and $75,000 end up with no federal income tax liability or negative liability as do 9% of households with incomes between $75,000 and $100,000.

    No one is asserting that many people should not pay income tax. There are perhaps 60% of the 47% who rightfully should not be paying taxes. But, I think you are absurd if you believe that people making $50,000 and above a year should not pay taxes.

    1. I don’t get it. How can you make your statements and expect to have a society?

      Imagine walking into your local shopping mart to buy something and someone else walks in and gets it for free?

      We have affirmative action which forces employment based on skin color. We have equal opportunity that pushes women ahead of men.

      Until we have a fair tax how can you expect to have a society?

      Yeah I can bite my tongue at the market when someone is ahead of me with $500 on a foodstamp card while im paying cash for my stuff. But what I can’t bite my tongue is these same people sitting at home with their xbox360’s, kids, living on the government cheese, voting for larger government and saying how the rich should pay more taxes.

      I got news for them, the rich didn’t get rich by sitting on their rearends on government handouts.

      1. “I got news for them, the rich didn’t get rich by sitting on their rearends on government handouts.”

        No, lots of them got rich by sitting on their rearends and waiting for their parents to die.

      2. I agree with you James. I pay taxes and land taxes I think I pay to much taxes myself I didn’t get what I have from sitting at home I had to work for what I have

      3. True! The rich get rich because most of them work hard. Now I can’t say that’s how all of them get rich, but most work hard for what they earn.

      4. James I could not agree with you more. I know people that have not worked in years, capable people, but they do just fine living off the system and they are ok with it. Now those losers are getting tax refunds and they never even paid taxes. That makes my stomach churn. This system sucks.

        Luther… for those that did get money when their parents died, well consider this… their parents paid taxes on that money when they earned it and even worse the children pay MORE taxes on the ALREADY taxed dollars when they inherit it. Atleast they are not living off the system!

      5. Try to find someone cashing those foodstamps that doesn’t have a cell phone in their hand, a plasma tv at home and the latest high dollar shoes on. I don’t get the latest phone as soon as its out, I have to pay for my own food and the welfare generations food, housing and medical bills!

  8. What about the huge number of people who do a lot of the physical labor and insist on getting paid with cash only. Guess what, I’ll bet most of them do not declare that income. However they receive benefits from the government. Another jab at the honest taxpayer.

    1. The reality of that is the amount of income taxed by under-the-table jobs is usually minimal. If these same people have kids the government might actually be saving money by them not claiming it because there is a thin line in the amount of income you report.

      I would be first concerned with the illegal aliens working in this county. We have them in probably every state now suppressing wages.

      I long for the day when a neighbor wants a roof or addition and can’t afford it they don’t get it. Now they can get it because we have illegal aliens being hired to do the work.

      Neighbors get the roof, legitimate contractors that hire americans to do the work go broke.

      Walmarts on every corner are good I guess until it actually starts to eat away at the profits of walmart. We all can’t work in fast food or at walmart so sooner or later we are going to need other areas of industry in order to survive.

      Or is survival not on the agenda the elite has for us?

      1. Those elusive elitists want the world to themselves. All of ‘us’ make up a large portion of the “useless eaters” which they hate. There is no justice now or ever, and I doubt there ever will be, here or in the “hereafter.”
        We could all help to solve the problem if we joined Walter Burien, Jr. at http://WWW.CAFR1.COM in getting use of the hidden CAFR monies (the biggest game in town). These are a secret investment system, using our tax dollars for the investors’ benefit, not ours!

    2. Some people who insist on getting paid with cash only probably don’t report that income on their taxes. That is why they qualify for all that Earned Income Credit. Someone with 2 children can work for unreported cash of $70,000 and reported income (W-2) of $10,000………..and get $5000 FREE Earned Income Credit refund. This is one of the problems with the EIC. This is fraud and our tax money. This is another reason the EIC is unfair and should be eliminated.

  9. First – and most important – you are taxed on your INCOME not on your WEALTH. I constantly see people conflate the two when arguing about who pays taxes. Many people are wealthy because the own or control various assets (stocks, bonds,real estate, patents, copyrights, etc.) that does not mean they have a large cash income. It is quite possible to be very “wealthy” and cash poor at the same time. You man own the majority of stock in a major corporation, but unless you’re receiving dividends, the stock is necessarily providing you with income. When people speak of your “wealth”, they’re are usually speaking of the current market value of that stock – something you can only realize by selling it. BTW, the top 1% of income earners, earn 24% of all personal income, and pay 38% of all income taxes.

  10. Uh, that should be “Isn’t necessarily providing you with income”.

  11. The true fact — about half of Americans do not pay federal income taxes – often gets transmogrified in public discourse into the decidedly untrue claim that half of Americans pay no taxes. That simply isn’t so. There are many other taxes in our fair land, including payroll taxes, excise taxes, sales taxes, state income taxes, and property taxes. Most people who don’t pay federal income taxes still encounter some of these other taxes.

  12. I’ve often wondered how this works. Thanks for explaining it.

    I’d go a step further and say alot of those in the 1/2 are paid by the government to breed poverty.

    I seen it at the supermarket a bit ago. A young attractive couple with a kid or two. Both adults were on food stamps. The man looked more than capable of holding a job as did the wife (im assuming wife). They had to do 2 separate orders for what they had (which wasn’t much to begin with) so that they could do whatever with the food stamps.

    Im 29, I do not have kids. I do not have kids because I cannot provide the kind of life they would need.

    Why does government encourage poverty? Why are we paying people to breed?

    Animals can have children; should we pay them? I guess when you can get cats and dogs voting the politicians will have a system for it.

    No taxes paid? No votes cast.

    1. Wow! You do realize that many people on welfare actually have jobs, don’t you? Their jobs just don’t pay a living wage. Or, if they actually don’t work they could have been laid off due to the current economic crisis.

      Regardless, you seriously need to look at the SNAP (food stamps) income eligibility guidelines for a family of 4. Your speculative assumption that they don’t work could very well be completely untrue.


      The only relatives that I have that are on welfare and who don’t work are an uncle who is disabled (he has schizophrenia) and an aunt who was injured and disabled in a serious car accident. Everyone else works. They just don’t have living wage jobs. One is an Aunt who was born disabled and works. The other is a brother (with 4 kids) who works at a place that helps disabled people go about their daily lives. I’m tired of the myth that all welfare recipients never work.

      1. PHANTOM It is shameful that so many write anti Safety Nets-Pro Rich yet go to a Christian Church and worship Jesus Christ. They are hypocrites as are many pastors. Jesus used one word the most. POOR. Jesus condemned the Rich. Yet! We shame the Poor and Idolize the Rich. Christ-Like???

        Today 5% own 62% of all Net Wealth
        80% own 13% 120,000,000 workers
        what would Jesus say? 62/13

        Today 2% own 50% all Financial Wealth
        20% own 93%
        80% 0wn 7% 120,000,00 workers
        What would Jesus say? 93/7

        Today 25% take 67% of all individual income
        80% take 13% 70,000,000 workers
        What would Jesus say? 67/13

        We are now one of lowest taxed nations
        In 2008, individual Income was 8426 Billion.
        Paid 1031B in individual income taxes. 12% 12%! Wow!
        Top 25% paid 15.68%
        taxfoundation.org summary of federal individual income taxes

        America now ranks fourth from bottom in Equality in rich nations
        INEQUALITY has, historically, been dominant in Revolutions.

        We had no Safety Nets there would be Burn Baby Burn like in London

        Imagine no safety nets in next 15 years when 79 million will retire or be eligible. Over half four work force will turn over. It will open jobs for those below that age It could be the good old days again.

        clarence swinney madmadmad at Inequality in America
        Achmed so mad he spit splat splat

    2. Amen to that! And only vote with proper ID. No more of the 08 fiasco of Mikey Mouse and Elvis casting votes for Obama! Really? And these people aren’t in jail. Because of who benifited from the voter fraud, Hussein Obama, the traitor and embarassment to the office of the President.

  13. >We have affirmative action which forces employment based on skin color. We have equal opportunity that pushes women ahead of men.

    Neither claim is true.

  14. >Actually both claims are true. So there.

    Nope. I was in management fro decades and was involved in hiring and firing. We were never required to hire, or fire, someone because of their race or sex.

  15. Let’s not forget the various taxes which amount to a hidden tax that consumers pay nor the lower wages & benefits workers endure as a result of business taxes & a runaway regulatory environment.

    1. “Runaway regulatory environment?”

      In Texas, where there is minimal regulation, less than 50% of construction workers are covered by workers’ compensation insurance. A worker dies in Texas every couple days and several thousand workers are injured on the job in Texas every year. There are also cases of wage theft by employers. Some workers don’t have “access to drinking water!” All thanks to minimal regulation!

      Also, Texas is tied with the highest % of minimum wage workers and has the highest number of people without health insurance.

      Source: http://www.huffingtonpost.com/2011/08/03/governor-perrys-texas-economy_n_917460.html


  16. Ummm… “True fact”?

    Dude. If it’s false, it’s not a fact.

    If it’s a fact, then “true” is redundant (at least).

    This is as egregious a bit of boobery as “free gift”.

  17. If the rich, who create all the jobs do not pay sufficient salary for their employees to pay income taxes, then they have to take the responsibility to pay their employee’s share.

  18. Pingback: - StreetEYE
  19. You forget that all employees pay Social Security and Medicare which is 40% of the federal budget. These people also have to pay for unemployment out of their paychecks. These people also have to pay local/state taxes, property tax, and sales tax to local governments. Then there are federal taxes on tobacco, gasoline, alcohol, aviation, cell phone,etc, etc. So these people do pay plenty of taxes despite the fact that the tax code says they get a refund on their income tax.

    Study of 2008 tax returns revealed Top 20% paid 30% of Total Income in Federal-State-Local taxes. Middle 20% paid 28%.
    John Paulson made 4300 million in 2009 and has yet to pay a tax.
    Rich pay all the income taxes luckie duckies
    2008 Returns
    140 Million returns
    Total AIG=8400 Billion—- Paid $1031B in Taxes–12.24% tax rate
    1% got 20% of income—-paid 38% of taxes–24% tax rate
    5% got 35% of income—-paid 59% of taxes–21% tax rate
    10% got 45% of Income—paid 70% of taxes-19% tax rate
    25% got 67% of Income—paid 87% of taxes-16% tax rate
    50% got 87% of income—paid 97% of taxes-14% tax rate
    70M got 13% of income—-paid 3% of taxes—3% tax rate
    clarence swinney olduglymeanhonest  mad mad mad at Inequality in America
    political historian Lifeaholics of America
    available for speeches cswinney2@triad.rr.com


    From 1946 to 1980 the period was known as the GREAT MIDDLE CLASS YEARS
    Each President worked to reduce the Debt from WWII.
    In 1980 Debt was less than 1000 Billion and Government Spending was 600 Billion per year.

    Reagan boastful Cut Taxes plus Cut the size of Government was a Trojan Horse, per his OMB Stockman, to cut Taxes for very rich.

    Reagan was Governor for 8 years during which he increased Taxes on many items.
    He increased the state revenues more than any predecessor.
    By Far. Cutting Government? Ho Hum. Blarney Baloney once more.

    Reagan policies increased Spending by 80% .
    Debt by 186%.
    9-30-81 Debt was $999.9 Billion and 9-30-89 at $1,859 Billion
    Conservatives use Spin: It was Congress.
    From 1930 to 1980 we spent $6066 Billion.
    Reagan 8 Budgets totaled over $7000 Billion.
    Congress? Ho Hum.
    Blarney Baloney.
    Congress returned Reagan 8 budgets for his signature with
    fewer total dollars on them.
    Haynes Johnson in “sleepwalking” said Reagan administration was “most scurrilous in history”
    138 were investigated /charged/fined. More than total for all preceding Presidents in 20th century.
    There were scandals in 27 Departments of the Federal Government.
    Most involved money fraud.
    The book “Ronald Reagan-There he goes again” documents over 300 incorrect statements by good old Ron.
    Each President from 1945 reduced the Debt then came Spend-Borrow Reagan
    to increase government by 80%.

    THEN-Here comes GHW BUSH.
    No braggart here. Nice Gentleman.
    He increased Debt to $4411 Billion.
    A 54% Increase.
    Give him credit for increasing Tax on Rich due to out of control Deficits.
    He had courage to put America first over ideology and party.

    The Debt on 9-30-1993 was $4411 Billion.
    The Debt on 9-30-01 was $5807 Billion.
    An increase of $1396 or 31%
    He ended with a surplus.

    HERE comes old King of Spend-Borrow GW BUSH
    Debt was $5807 Billion and on 9-30-09 it was $11,909 Billion.
    105% increase.
    Bush I-54%
    Bush II-105%
    Reagan-Bush I-Bush II did not pay down a penny of debt in 20 years
    Those Three Famous Conservatives added $10,946 Billion to our Debt.
    Three so called Famous “conservatives” promoted cut government
    Up = Down to them.
    9-30-81 to 9-30-09 we paid $8400 Billion in Interest.
    87% Interest Paid on Debt incurred by the Famous 3.

    Is it not possible(no) that without Reagan + Bush Tax Cuts we would enjoy a Surplus?

    Increase Unearned Income Tax to 40%. Make Gamblers pay.
    Increase Top Income Tax Rate to 40%
    Increase Estate Tax big time big time biggie
    Eliminate Loopholes on Corporate profits—Set a Minimum
    2008 -16% average payment-(top rate 35%)

    In 2003 distribution of corporate profits by CBO report revealed
    Bottom 80% of Income earners got 8%–Top 5% got 67%—Top 1% got 49%
    2009 Tax Return of Exxon pays no tax on billions in profits. Wrong. Sad.
    2007—Exxon paid no tax. Got a Refund.
    2010—Exxon Profit 45 Billion. Let us see if pay a tax?
    Renew Revenue Sharing to return cost to rich from middle class

    Clarence Swinney
    Political historian since 1991 on Reagan-Clinton-Bush II administrations.
    Lifeaholics Of America — old n ugly but honest mad mad mad at Inequality in Amrica
    Author-Lifeaholic-Work for a Life not just a Living—Workaholic to Lifeaholic
    Author-forthcoming– title not decided—How Democrats created a Great Middle Class and Wall Street Rich Conservatives are determined to destroy it
    Many Stats from 12-6-09 polidose.com article by John Lucia “The National Debt:Betrayal and Devastation
    Comments and corrections welcome at cswinney2@triad.rr.com I do err.

  22. >We have affirmative action which forces employment based on skin color. We have equal opportunity that pushes women ahead

    Neither bill does that. What they do do is prohibit biased hiring (and firing) against people based on race or sex. I was closely involved in hiring and firing for about 40 years.

  23. The point you are all failing to consider on the poor not paying taxes is that certain few people are benefiting from this scheme. Our local McDonald’s is one of 100 owned by then same man. If each of his stores empolyees 30 people and receives an average (guesstimate) of $2,000.00 refund for unearned income tax credit, that means the rest of the taxpayers in the United States are subsidizing him to the tune of $5,000,000.00 each year. The owner of these stores should be paying his employees better wages—-NOT THE REST OF US.

    I cannot think of a better racket than owning Walmart or McDonald’s.


    1. I remember a day when only the people who could afford it ate out. The rest of us ate at home. The brave new world is going to be hard to get used to for some of us.

      1. >The brave new world is going to be hard to get used to for some of us.

        I’m not too sure about that. I’m not a cook by any means and I eat at home most of the time. I figure my meals cost me about $1 each–so to go out is very expensive to me!

  24. I don’t have a problem with the people who zero out of the income tax due to exemptions, etc. I do have a problem that so many of the people who pay NO income tax get a huge refund of Earned Income Credit and Child Tax Credit. The Earned Income Credit has increased 114% over the last 10 years, although the inflation rate was only 28%. This EIC was designed to help the working poor….help….not pay them for not working.

    1. Stop the hand outs. Their are so many jobs available but the lazy don’t want to work at the ” hard jobs”. Or the jobs that aren’t in my area of study. Get your hands around a broom and work! Go to work at 0300 to make the donuts. Convienient stores are always looking for help. Get a job, stop having children that you can’t afford and better yourselves!

  25. @ Billie.. I don’t think you qualify for EIC if you don’t have income (work). So we are not paying them for NOT working.

  26. You are correct. Earned Income Credit is based on your earned income. The problem is that many people only work part of the year and still get big $$$ in EIC. Also, these same people never work to improve themselves, and they get EIC year after year after year. If someone works a minimum wage job, they should make about $15,000 a year. If this happens in a family that includes a mother, father, and 2 children, they still get about $5000 EIC. This family qualifies for Welfare, Food Stamps, Housing assistance, Education assistance, Medicaid, etc., etc. A family of 4 can make up to about $22,000 and still get about $4000 EIC. The government should not pay them EIC year after year. These people should try to improve by education, moving, etc., but they would lose all that FREE money. One example shows that a family of 4 making $50,000 year, paying FICA/Medicare, medical insurance, federal taxes, housing, etc.,(with no government assistance) makes less that that family making $15,000 and getting all that assistance. This makes them wonder why they should try to get a better job, education, etc. That is my problem with the tax system and government assistance. One easy way to correct this is to limited EIC to so many years….or eliminate it. There are plenty of other programs out there.

  27. Do away with all the programs that help the underpaid, unemployed, etc, and see just how inequality rules. The rich get richer, the poor get children. Then figure out how to pry a living wage out of the fists of the owners of the subsidized Mcd and WM. And everyone pay a fair price for all the goods they buy. No more milk subsidies. No more govt. supported roads. Every legal transaction, drivers licenses, passports, photo ID cards, car tags, real estate transaction…the party getting the goods pays the cost of providing them.
    If the mal-nourished, the disabled, the lost, the square pegs in the round holes of our society, all shall be evicted to wander in the desert until they figure out how to shape up and join the rest of society and make a contribution. Nature’s way. Social Darwinism. Just try to imagine a society such as this before whining about how the least of these don’t pay taxes. And don’t forget that those who do pay taxes are standing on the backs of those who don’t.

  28. i agree with James to sitting at home an collecting government handouts the rich got rich form hard work and there are select few who get there wealth through inheritance and money passed down but all that means is there parents or grand parents or whole family worked there butt of so they could live well off and not have to go through the struggles they did and im sure broke peoples parents or grandparents did the same trying to make a better life for there next generation unfortunately the link brook and someone wanted to be lazy and as for the tax first of all the federal income tax is one hundred percent illegal there is no legislation behind it. Article V of the U.S. Constitution defines the ratification process and requires three-fourths of the states to ratify any amendment proposed by Congress. There were fourty-eight states in the American Union in 1913, meaning that affirmative action of thirty-six was necessary for ratification. In February 1913, Secretary of State Philander Knox proclaimed that thirty-eight had ratified the Amendment. not one state legally ratified as well as they were thirteen short but by the power of Philander Knox secretary of state at that time claimed ratification. please do your research before you throw your money away to people who don’t need a bit of it invest back in your state and community because that’s were you live and what needs the most help. if i live in California im not gonna pay for homeboy to sit on his butt in his trailer in Georgia lol as well is don’t believe everything your are told by others make sure you do ur research and study up on what your doing with your money and life your not going to go to a car lot and buy a car with a blind fold on and no test drive and believe the car is fine and sign the contract you never read there is no difference to this matter

    True conservative

  29. All yall shut the hell up. Im going to enjoy my refund this year. CanI say BAAALLLLIIINNNGGGG!!!!!!!!
    Don’t be mad when you see me in my escalade. holla!!

  30. JUst wondering how some people can go after poor folks who are “getting over” but yet they couldnt careless about the CEOs and millionaires that are “getting over” ohhh wait, thats right the rich people are on TV telling you when and what to get mad about about, and some are too stupid to think for themselves:

  31. More people aren’t getting married and the one with the lower income files head of household and the boyfriend claims the other kids. I see and hear about this all the time. That’s why couples are not getting married anymore. I use to work at H & R block and we would ask if they are married if they said yes we couldn’t do them as head of household. They would get up and leave. Seen this everyday over and over…

  32. You guys keep arguing about who is and isn’t paying enough income tax? What are we not paying enough for? Where does the income tax go? It goes directly towards the interests on our debt. It fattens the pockets of those involved with the Federal Reserve. Everytime Obama takes money gets money from the Federal reserve for bailouts and government programs, everytime Bush and every candidate wanted money for their wars they borrowed from the Federal reserve. The Federal reserve sells the debt and we pay the wealthy for our debt, some of who our not even American!!!! Wake up people! There should be no income tax, there should be no Federal reserve. This is enslaving us and this bantering of the poor deserve more and the rich need to pay more, is fucking pointless! Our money, no matter how much we pay in federal income tax ONLY goes to pat fat cats’ pockets!

  33. Thanks for the auspicious writeup. It in reality was once a amusement account it. Glance advanced to far added agreeable from you! By the way, how could we keep in touch?

  34. I’m a 71-yr old widow who made less than $50,000 in 2011 (a combination of SS, retirement, savings interest, and small editing jobs–yes I claim every penny). I paid a little over $5,000 in federal income tax. I’m not too put out by that. Saw today where Obama is hoping to get the “Buffet tax” passed. Complained that Romney paid an effective tax rate on income of $21.7 million (let’s see–that’s $3,016,300 federal income tax), but that just isn’t enough for the big O. He wants at least 30% (or $6,510,000). I’m sorry… I just don’t get that because someone earns big bucks that he should have to come up with such an enormous amount of money. Seems like he already pays a lot. I have no problem whatsoever with paying the equivalent percentage of tax that someone else does no matter their bracket. It seems to me that if you don’t contribute something to the defense of your country and maintaining things that actually need maintenance, then you shouldn’t expect to be defended or maintained.

  35. Good for Patty. The big problem with a low percentage of Americans paying no federal income taxes is the adverse incentives it creates. If you have large portions of the American population paying zero FEDERAL income taxes (the taxes that fund federal government spending – the other taxes mentioned fund other spending: SS, medicare, state spending, local schools) those people have no personal financial incentive to ensure that federal spending is reasonable, proper or efficient. It becomes in their interest to vote for ever-increasing federal spending to benefit themselves – all paid for by their fellow citizens. Entitlement is the ugliest of human emotions because it combines greed with self-righteousness, the federal tax code shouldn’t encourage it. Everyone should have at least some skin in the game. No one should pay less than 5% – even if it’s only a couple hundred bucks.

  36. i dont care about the last paragraph…we all pay those taxes and it is still not fair that the low income and those that have lots of babies get tax relief while I get crap!…it isn’t my fault they are low income and I should not have to pay for them…they make their own choices in their life

  37. If any adult does not know that when they say nearly half pay no taxes – the subject already introduced was Federal Income Tax, they need to go back to school. I was always low income before I married and I always had to pay income taxes – I don’t get it!!!

    1. how many kids, how many jobs? also depending on place and COL according to the old model of pricing with food and transport included.
      Also single male 18-30, no children at that time? you are not the target market for income tax refunds.

  38. this seems rather absurd 1. poor 2. living on federal retirement fund. what about the hundreds of other taxes people pay directly or in the market? primarily based with food prices though refining and transport, and a place to sleep.

  39. The mass of misinformation and disinformation displayed here is stunning! First of all, the non-tax payers=non-workers/slackers hoax. If you took the trouble of parsing the numbers, you’d realize that a fair percentage of those who paid no federal income tax actually made 70-100k AGI. And all of the rest do work, but they can’t all be bosses, can they?

    Then you have people claiming you can live decently well on $15k(min wage) a year. Really? I haven’t seen anyone who lives on their own making $15k who has the time or the means to argue against their own income bracket on the internet(yes, I’m tallking about you 1% shills). Hell, they don’t even have computers. Back in 1985, I made $9000, and paid over $700 in federal income tax(not including my refund). My first year in the workforce, and I couldn’t have survived if I hadn’t pooled with others for housing, utilities and transport. That was in 1985 dollars.

    One of the posters here says that his meals cost him $1 each. Really? Unless you lived on potatoes alone, it would cost you quite a bit more. Two eggs, two slices of toast with jam, and a cup of coffee with cream and sugar would cost you more than $1 at home. And that’s only breakfast. When you make lunch or dinner with 4 oz of protein(chicken, fish, beef, etc.), what’s that going to cost you? At an absolute lowball figure of $5/person/day, a family of three will spend close to $500 a month on food, without buying “luxuries” like milk, American cheese, fruit or organic anything. With enough people doing that, it should knock plenty of 1%ers way out of their current income brackets. See how things work together?

    Then you have people saying, if you don’t like it here, move to Greece. Hey, you know what, if you don’t like lower tax rates and safety nets for the poor, move to a poor country and see if you can make your millions there. It is because the US has things like minimum living wage and social nets that the rich are rich in this country. The equivalent of the 1% in poor countries is 0.01% or less. Yes, 99% of our 1%-ers would be out of their group in most other countries.

    If you are in a lifeboat with 50% sick people, and the boat is taking on water, should the 50% able-bodied refuse to do “more than their fair share”? If the 1% are paying 50% more tax than the rest, they are fully able to do so, and the state of the luxury market in the US shows that they are not hurting in the least. I’ve been in and out of the 1% over the years, but I have never questioned that we need to help the less fortunate. That is where I broke rank with the Republicans, who make a mockery of Christianity’s core principle of empathy and compassion.

  40. Here is food for thought….
    If the top 5% of society disappeared the country would fall apart immediately. Every doctor, pilot, engineer, successful businessman, gone.

    If the bottom 5% disappeared, the country would be safer and better off. The welfare babies, lazy citizens, people who enjoy scamming the system, etc. Society would be just fine without them.

    People can act irresponsibly (have 5 kids, different fathers, etc…) because they are taken care of by the state. Medicaid for the health insurance, housing subsidies for rent, food stamps for groceries, the list goes on and on. We, as a society, are beginning to reward poor decisions and punish good decisions.

    The work ethic in this day and age is appalling. I see 8.1% unemployment on the news, then a newspaper filled with job postings. I have a small business and I have watched first hand the quality of employee go lower and lower. We have employees texting at work, checking their precious facebook page, doing all kinds of things than ENSURE you will never improve their lot in life. I have Saturday hours that are difficult to staff. People want to “have their weekend”. News flash guys, those who pay the taxes in this country spent the majority of their working life at a low wage, early hours, late hours, weekend hours, and learned that you can move up if you want to.

    1. What a patronizing post! First of all, there is no argument about “disappearing” the top 5%. The argument, if you had paid attention, was whether the top >1%< should only pay taxes proportional to their share of national income. That is, if the top 1% make 16% of the income, should they pay 24% of the taxes, as they apparently do now, or pay 16%(a flat tax applied selectively for the wealthy).

      When I had my first full year of basic employment in a Reagan recession year, I made about $9000, paid about $900 in federal income tax, and got back about $300. I was part of that 5% who you so dismissively refer to as "welfare babies, scammers and lazy people". Are you seriously suggesting that I should have paid the same tax rate as people who wouldn't blink at spending my daily income on a drink at a Manhattan restaurant? Sure there are lazy shirkers at the bottom end of the income scale, but they're also there on the upper end. Just as some people on the low end may be lazy, scamming welfare babies, some on the high end are lazy, entitled, trust fund kiddies, sycophants on retainers commensurate with their skill at kissing the butts above them and people whose only skill is to toss, carry or hit a ball.

      Stop falling for the propaganda, and think for yourself. Refuse to let your opinions be delivered to you by your preferred media outlet. And never forget that while you are an individual, you do live in a society, not in a bazaar.

  41. My bad, the numbers for the top 1% should have been 24% of the income and 38% of the federal income tax.

  42. Pingback: Econ 479
  43. I worked with poor/homeless for years. The truly needy were lumped in with those who knew how to use the system. Earned Income tax credit is a subsidy for corporate hogs not paying livable wages/ thus WE the taxpayer subsidize. An employer will tell applicant that while pay is min wage they will be getting X thousands more due to earned income. The more children the bigger the check thus if you watch Judge Joe you will see MOST defendants (part time jobs) with 4-5-6 etc kids/ all by different fathers.

    Plus with a FIVE yr limit since Clinton era —-the only way to extend this is MORE children…plus the fact that those collecting welfare need to be engaged in workfare program UNLESS they have children under two – they do not need to work – sad but true, many families are using their teenage girls as baby machines- a baby turns one yr old and the girl is pregnant again.

    Also – note how the media has paid NO attention to the fact that President Obama’s AUNT ( written about in his book – Dreams from My Father) overstayed her visa in 2001 – was ordered back to Kenya – she ignored order/ was ordered back again / she showed up at court hearing with SEVERAL lawyers/ meantime President said he was unaware of her situation/ NOT – she had visited him at his mansion in Chicago – attended his swearing in (Senate) / was given a refurbished handicapped apt (Boston) first floor / food stamps – SS disability – medical (son enrolled in Boston University – who’s paying??).

    She remarked when confronted in ’08 – that we (US) owed it to her (apt – disability etc). When working with American poor (not welfare cheats) they had to wait up to 6-8 yrs for housing – veterans were living under bridges / this Aunt got a beautiful apt – BACK operation for free (mine cost $76,000 – tumor in spinal canal)….WHY are we paying for this woman who never worked a day in USA – has a nephew now worth millions whose mother in law resides in White House/ spent $5 mill JUST for last yrs Hawaiian vacation / What an insult ( she attended inauguration) to all of us for him to claim ignorance of the special treatment afforded this illegal immigrant aunt . I am an Independent – FAIR IS FAIR I don’t care what party you belong to. Check out Boston, President’s Aunt given benefits —or President’s Aunt says she deserves help.

    PS it is just as sickening that we pay 72% of (health) premium costs of legislators – GOLD CARD benefits, network of doctors (no searching for them) they voted themselves exempt from Obama Care/ we subsidize their very lucrative pensions ( they also get SS) – they get FREE leased cars – gas expenses – free weekly airfare home – can retire after 5 yrs – Senators get upwards of one million for office expenses – they worked 106 DAYS last yr. ..we pay for their exotic vacations called FACT FINDING missions/ their children, wives get lobbying jobs – appointed to $$$ boards – corporate jobs etc.

  44. can no one tell me why a foreigner working and owning homes and businesses in this country don’t pay taxes? In my husbands workplace they will work all kinds of overtime and then boast that they don’t pay taxes. Why not, they live here? Who will pay for their S/S? Seems to me that if they did pay it would ease the burdens the Gov’t faces.

  45. The rich didn’t not pay and the very poor do not pay the middle class get fuck all the time I am a retire person who work all my life forty years paid my taxes on every level now when i do my taxes i can not get any breaks the government want to keep bleeding a dead horse because i am a honest person retired and getting fuck every year by uncle sam..

  46. II AM NOT A TEA PARTY MEMBER i want to help peole just give me a few breaks to as a retired senior citizen that all I want to help the less fortiunate old and young just do not forget that we senior play by rules and paid our taxes for years that all.

  47. My ex-husband never paid child support, despite ‘working’ as a real estate broker in Beverly Hills. He paid little or no taxes simply by not declaring large chunks of cash income. During the Korean War, he served stateside in San Diego, as a dental assistant. Today, he lives off Social Security and a PENSION from the VA and gets subsidized housing and food stamps. Mr. Bradshaw is a drag on society, and typical of many deadbeats. Despite having three children to support, I managed to work fulltime, and have never claimed aid or benefits of any kind for myself or my children. So, those of us who choose to play by the rules and work hard, get to support the losers.

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  50. I have to just die laughing at all these people bitching about the welfare mothers with all the children by different fathers collecting government checks. In their next breath, they will tell you that sex education is evil, birth control is sinful, and abortion is murder. ROFL! Assholes.

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