- 151.7m people – 49.5% of the U.S. population – paid no federal income tax in 2009, figures show
Only half of U.S. citizens pay federal income tax, according to the latest available figures.
In 2009, just 50.5 per cent of Americans paid any income tax to the federal government – the lowest proportion in at least half a century.
And the number of people outside the tax system could have climbed even higher since as the economic downturn has continued to bite and unemployment has remained high.
The decreasing number of taxpayers threatens government revenues, and could also cause resentment from those who believe that welfare recipients are taking money out of the economy.
151.7million U.S. citizens paid no federal income tax in 2009, according to figures compiled by the Heritage Foundation, a right-wing think tank.
In 1984, the middle of the Reagan era, 85 per cent of Americans paid federal income tax, meaning just 34.8million people did not.
This situation is a serious danger to our Republic.
Tytler wrote that our representative democracy can only exist until the voters discover that they can vote themselves largesse from the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing.
It is Obama, not Romney, who is managing our decline.
In fact Obama is engineering our decline.
Slightly more than half of the U.S. population experiences poverty at some time before age 65. Roughly half of those who get out of poverty will become poor again within five years.
In any given year, that might account for the 50% who pay no federal income taxes.
We also have 24% of the population below age 18, and 13% who are over 65–many of whom have little or no retirement income other than Social Security. Add mothers staying at home with young children, and the disabled.
There’s nothing surprising or particularly shocking about the 50% figure.
Most of those people do pay other inescapable taxes, however. There are state and county income taxes, sales taxes, Social Security and Medicare tax, state and federal gasoline taxes, property taxes, etc.
What some might find more shocking is the half-a-million taxpaying units with income in excess of $100,000 in 2011 who paid no federal income taxes, or the 7,000 with income in excess of $1 million who paid no federal income taxes.
@Greg:
Yes, that general figure of 50% is somewhat misleading, and there are many reasons why a person pays little to no income taxes, including those whose gross income is relatively high. I have to wonder if you even read the article Curt linked, or the data the article cited from the Heritage Foundation.
Consider the last sentence in the post(not the last sentence in the linked article, mind you). In the middle of Reagan’s presidency, an overwhelming number of people paid taxes compared to today. What has changed? For one, the tax code has become more progressive, knocking wage earners out of the threshold for paying taxes. Tax credits, such as the EIC has contributed to this, even to the point where many wage-earners get back, in a refund, more than they actually paid into the system throughout the year. For another, the unemployment rate jumping up like it has contributed to the 50% figure. Add in the ever increasing number of retirees due to the baby boomers starting to retire, and there is very little to wonder about in that 50%.
But, the real issue is that the percentage is continuing to grow every year, even at the same time that liberal/progressives wish to make the tax code even more progressive, which will take millions more wage earners off the taxpaying rolls. Do you not see a problem with this? What about when the percentage of taxpayers drops to 40%? 30%? When only 1/3 of Americans are paying income taxes and the number of government dependents grows to 50%, will that be ok?
And as for the higher income earners not paying taxes, there are many reasons why this is so, not the least amongst them those people who are self-employed and filing taxes for their work as personal income. Those people take advantage of certain tax breaks in order to lessen their taxable income amounts. And depending on the makeup of those tax breaks, and the income itself, paying zero income taxes is entirely possible. My own father, when he owned his own company, filed the same way. He rarely had much in the way of taxes due, even as we were most assuredly a middle-class family. And my father is the most honest person that I have ever known, so the chances that he was lying or falsifying his income tax returns is highly unlikely.
On top of that, would you condemn those lower income earners for partaking in the various available tax credits and deductions that end up reducing their taxes to zero? If not, then why would you condemn those higher income earners for doing essentially the same thing? My guess is that if you happened to be a high income earner you would take all available means to reduce your taxable income, correct?
The problem is not that the tax rates are too low for some or too high for others. The problem is that the tax code itself is such a mess in the first place, yet, liberal/progressives only want to add to the 60k+ pages of federal tax code.
J.G. 2 words— Fair Tax —-abolish the I.R.S.
NanG Our country is great. Our decline will be in direct proportion to the number of citizens who believe “greed is good” or caring for our poor and less fortunate is a “weakness”
Regardless of how anyone feels about “rich”, “poor” or whatever label you would prefer, I believe that the larger issue on behalf of staunch leftists is the Cloward-Piven strategy.
Any comments?
I call that graph progress. Maybe going forward we can bump up the number who don’t pay income tax to 70% or more. Except that we need spending cuts to match, of course. We don’t have a revenue problem, we have a spending problem. And politically, demanding that the bottom 50% pony up sounds like a huge loser.
@Richard Wheeler:
The Fairtax would be an immense improvement over what we have now. Consider that the percentage of overall income that the bottom 25% and bottom 50% garner grows regardless of how the economy does, yet the percentage of all wage earners not paying any income taxes continues to grow. It’s not hard to imagine that given the trend there that it won’t be long before the top 50% of wage earners are paying the entirety of income taxes. Politicians have used the tax system to pit people against one another, based on economic classes. Remove that, and there will be one less divisive mechanism for the pols to categorize the people.
@Anti-Socialist:
It is certainly looking like the intent is to collapse the US economy by weighing it down with entitlement-addicts.
But the ultimate outcome might not be the kleptocracy that most failed states’ leaders have enjoyed (behind their high walled citadels).
For decades other kleptocrats have managed to reign in their rabble via two scapegoats: Israel and the USA.
But the rabble have connected to the internet and afterward could not believe that Israel and the USA were the reason they were poor.
They saw their own leaders’ lavish lifestyles from the web.
They rebelled.
Sure, the Islamists took advantage of them.
Our own kleptocrat-in-waiting, Obama, doesn’t think for a second that Islamists now voted into power in Egypt will simply allow another election to replace them when they don’t deliver the goods–more jobs, housing, and cheaper prices.
In fact, Obama is following their playbook: promise those things, NEVER deliver them, insist on more time and -who knows?- maybe never have another election that isn’t so dirty he can’t stay in…..or another puppet in his image.
The problem with kleptocrats is that they can loot but they are running out of places to run away to with that loot.
Obama has created a haven for foreign kleptocrats.
Obama’s crackdown on the dirty assets of dictators’ families is a highly selective campaign.
Ever read about Teodoro Obiang and his $35 million Malibu home?
Are his or Tunisia’s Zine Ben Ali’s assets frozen in the USA?
No.
But they also have huge yachts with choppers on pads and 80 bedrooms.
And one of those huge $300 million-plus yachts might be Obama’s new home when he does leave office with billions.
He and Michelle are NOT going to spread THEIR wealth around.
They are used to kobe beef, lobster, and all the finest.
High walls won’t be enough to protect him if his own rabble ever realize how they’ve been suckered.
The original article is a poorly presented exposition, mainly written—whether intentionally or not—to throw red meat to conservatives. The instance of equivocation and vagueness are too numerous to mention. Instead of pointing the way to a consistent conclusion, it leaves the subject open for the reader to form a multitude of conclusions, based personal experience and bias, not facts.
@Liberal1 (objectivity):
Actually, I was thinking the same about how poorly written the article was, L1.
But for a different reason.
The Guardian’s article denigrated the original research (mostly by not bothering to LINK to it).
Here is the research the Guardian gleaned their tiny article from.
As you can see, its raw data is all the Obama’s Administration’s own numbers.
Every bit of it.
Be sure to click on the bottom link in the original research to see the 82 references.
Note most are Obama’s own numbers.
Other citations, more of a political or economics bent, if you want to discount them, are clearly noted.
@Richard Wheeler:
You were 1 for 2 there Rich. I’d be ok with the Fair Tax. Taking care of the poor is not the role of the federal government though. Let’s be honest, they suck at it. We have what, 50 years invested into LBJ’s war on poverty? No, taking care of the poor is the responsibility of the community. The federal government has no more responsibility than to ensure that laws are written in a way that provides opportunity for everyone. Not equal outcome, equal opportunity. What a person does with that opportunity is up to them. There are people that truly need a helping hand and there are people that are looking for the next handout. A community understands which is which, the federal government does not.
Aqua My comment didn’t reference govt. It spoke to the mindset and soul of our citizens.
@Richard Wheeler:
Considering the generosity of Americans in general, and the amount that private charities and community organizations receive, I’d say that your take on the pulse of the mindset and soul of US citizens is off-base.
John I don’t have a “take” I speak of a fervent hope that will allow us to continue as a strong,prosperous and caring society. A society that honors civil rights,human rights and freedom of speech. “If a free society cannot care for the many who are poor it cannot protect the few who are rich” JFK inaugural address
@Richard Wheeler:
Agreed. Here’s another great quote by JFK. (By the way, Stephen King has a new book out called 11/22/63, it is an awesome read).
http://www.americanrhetoric.com/speeches/jfkeconomicclubaddress.html
@Richard Wheeler:
I agree, but therein lies the difference between you and I, Rich. You support a strong federal government that forces it’s citizens to do so. I don’t. Unfortunately, your strong federal government, while “protecting” the rights of the poor, stomps all over the rights of the rich. And while “protecting” the “rights” of women, infringes on religious rights.
every one poor and rich and middle class should pay the percentage on their revenue, be it from work or
wealth or welfare or unemployement benefits or old age security pension. to have a fairness of all
contributing to the expanses of the COUNTRY, as long as the GOVERNMENT lower their own
benefits and pay,, meaning they are the first one, who should do the first move which include also the not elected, but work for the FEDERALS AND THE STATES , that would boost their acknowledging of the realty they belong to the whole of the NATION, which vote for the one which deserve it, not just anyone coming out of no body knows being push to the throne by not credible group with an intent
to destroy AMERICA as she really is which have existed and abide by the laws of the land written deep in generations of the PEOPLE OBEYING THOSE LAWS
Thanks Aqua Many of us would take JFK one better with a Fair Tax and a dismantling of the IRS.
John Galt The very wealthy in our society are doing just fine whether under Bush,Obama or name your Pres. After time in Rome and The Vatican I find it difficult to worry about the hierarchy of The Catholic Church.The needs of their many poor should be of highest priority.
Bees below That is your philosophy,isn’t it.
Rich Wheeler
you can also reverse the quote and it would fit perfectly to send to OBAMA
TO REFLEX ON IT FOR TODAY’S SOCIETY
if a society do not care for the few who are rich, cannot protect the many ones who are poor,
BYE
@johngalt: ‘the percentage of overall income that the bottom 25% and bottom 50% garner grows’
Not correct. I would refer you to the graph at the bottom of this page: http://currydemocrats.org/in_perspective/american_pie.html
The percentage of overall income accruing to the bottom three quintiles has dropped over time. Or were you talking about something else?
@Aqua: OK, but at the time JFK uttered those words, the top rate was 91%. There are two separate effects under consideration: one is that there are immediate increases in work and reported income when income taxes are lowered, as people have more incentive to work and less incentive to dodge the income tax. Economists estimate that this effect will immediately increase revenues if the income tax rate is over 70%. Second are the longer term effects where greater economic growth due to lower tax rates eventually increases government revenues to cover whatever temporary decrease might have occurred due to lower short term tax revenues. How long it takes for the government to break even in these scenarios, say if they cut taxes from 40% to 30% or something, depends on different factors. But in our situation, where we’re really bumping up against the limits of how much debt we can carry, it does not make sense to think that we can balance the budget via tax rate reductions. The time for a positive return is too long and the amount of debt we would have to carry in the meantime too high.
We need spending cuts.
@bbartlog:
No, bbartlog, you are correct. It was a misstatement by me. I meant to say that the total income, even when adjusted to current dollars, continues to grow for the bottom 50%. And that happens regardless of whether the economy is good, stable, or declining. In contrast, the total income of the top 50%, while growing during times where the economy is good, declines significantly under a bad, or declining economy. That being the case, the share of income as a percentage of total US individual income, for the bottom 50%, tends to decline, albeit by very small amounts, during times when the economy is good, and tends to grow, again albeit by small amounts, when the economy is bad, or declining.
I refer you to this site for pure data on taxation, income, etc.;
http://www.taxfoundation.org/news/show/250.html