NC Budget and Tax Center

When it comes to taxes, ALL Americans have skin in the game

All too often including most recently, we’ve been hearing the misleading claim that almost half of Americans pay no taxes.

While 47% of Americans did not pay federal income tax in 2011, they paid lots of other taxes, including sales taxes, property taxes, gas taxes, state income taxes, or payroll taxes. 

In fact, roughly two-thirds of those who didn’t pay federal income tax were workers who did contribute payroll taxes. Seniors make up another quarter of those families who don’t currently pay federal income tax, but paid payroll taxes into the federal retirement programs for their entire working lives.  The remaining households are either people with disabilities or students, who are likely to pay federal income tax in the future when they enter the workforce.

Moreover, Citizens for Tax Justice shows that the total of federal, state and local taxes paid by each income group is roughly similar to their share of total income.  This is because the progressivity of the federal tax system goes some way to offsetting the regressive state and local tax systems that ask a lot more, as a share of income, from low- and moderate-income families. This is important for the overall fairness of our tax system.

 

14 Comments

  1. Frank Burns

    September 19, 2012 at 11:00 am

    Is your justification for citizens paying no federal income taxes, is that they pay lots of other taxes? That’s argument doesn’t hold water. Everybody should pay some federal income tax so that when somebody wants to raise them, they know that they will be impacted as well. By allowing federal tax credits it creates a group in society who doesn’t care if federal spending increases, it won’t affect them. Your statement is wrong, one half of the population has no skin in the federal income tax game. I don’t know if you are intentionally trying to misdirect when you refer to payroll taxes. If you mean social security and medicare, why not use those terms? No whining or sob stories allowed!

  2. Rob Schofield

    September 19, 2012 at 11:25 am

    I know this would come as a big departure for you Frank, but you might actually try reading the report referenced in the post.

  3. Frank Burns

    September 19, 2012 at 11:31 am

    I did read the report and my statement stands. Prove me wrong.

  4. James

    September 19, 2012 at 12:22 pm

    [Darn] you, Frank.

    You’re talking about my disabled brother and my wife, both of whom are retired and neither of whom pay federal income taxes.

    You’re also talking about my daughter who is a college student and doesn’t pay federal income taxes.

    [Troubled soul]

    Editor’s note: Comment was edited for a couple of problematic words proscribed by our comment policy. We still love you though James.

  5. Frank Burns

    September 19, 2012 at 12:53 pm

    James,
    Where is your argument? All I get from your side is profanity. Do you think that helps make your case? Once everybody pays taxes, then citizens will pay more attention to how their taxes are spent. Yeah taxes are a pain, but since when does the left care about paying more taxes? You just want the middle class to pay more and don’t care how big, intrusive government gets. All citizens should be paying taxes regardless of their circumstances.

  6. Jack

    September 19, 2012 at 1:47 pm

    Frank, you should read the report.

  7. Jeff S

    September 19, 2012 at 3:08 pm

    Please just ignore Frank and let him continue educating himself via talk radio.

    I’m really not sure why the left is allowing themselves to get sucked into this argument. This is the same old “US vs THEM” storyline. Step 1 is to conclude that we don’t like “them”. Step 2 is to come up with all the politically correct sounding reasons that it’s their fault. The end.

    You can debunk every Step2 excuse that’s thrown out there and it won’t change a thing. They are not attached to the justifications and have ten more ready to go. You will never change anyone’s minds fighting them at step 2. Call them out at step 1. Simply dismiss their justifications for what they are.

    The hypocrisy, especially over the tax issue is overwhelming. Wake up in a subdivision on the edge of town whose development, road widening, infrastructure extension was subsidized by others. Eat a breakfast of government subsidized food. Drive to work on government subsidized roads, powered by oil subsidized by the blood of tends of thousands of foreign civilians. Arrive at your corporate office, subsidized by millions in local tax incentives. Start posting on the internet about all the deadbeats in the world.

    You didn’t seem to have a problem letting them build your house, lay the pipes, pave the roads, cook your breakfast, mow your grass, empty your trashcans. In fact, you insisted that all of these tasks be done as cheaply as possible. The existence of these people – millions of them – make your lifestyle possible. How oblivious do you have to be not to understand this.

  8. Frank Burns

    September 19, 2012 at 3:15 pm

    Jeff, Ignoring the problem won’t make it go away. I’m one voice of many who insist that everybody pays federal income taxes. If we all paid taxes, then there would be no us versus them, would there? We would all be in the same boat pulling the oars together. Where do you think all those taxes for road to subdivisions come from? Every citizen needs to pay a share of taxes as they all use those roads too.

  9. Ed M

    September 19, 2012 at 3:30 pm

    Frank, you’ve once again illustrated that you don’t read the reports as you claim. As mentioned in the report, virtually everyone pays state and federal excise taxes (e.g. gas taxes) that are the primary source of funding for road construction and maintenance.

    Not that you’ll actually read what’s on the following links, but here’s some additional context for those who might actually desire to do so:

    About the 47 Percent Who Don’t Pay Federal Income Tax: Mitt, Meet Andrea
    http://taxvox.taxpolicycenter.org/2012/09/19/about-the-47-percent-who-dont-pay-federal-income-tax-mitt-meet-andrea/

    The one tax graph you really need to know
    http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/09/19/heres-why-the-47-percent-argument-is-an-abuse-of-tax-data/

  10. Frank Burns

    September 19, 2012 at 7:26 pm

    Ed, your note provides no new information. I understand that all citizens pay some taxes, ok? You are using the same argument from the article that because the 47% who pay no federal taxes but pay other taxes, they shouldn’t have to pay any federal income taxes. That’s not a valid reason. I think there could be some compromise to lower that percentage down to 25% without eliminating all of the tax credits. Some citizens get a federal refund on top of not paying any federal taxes, this certainly needs to end.

  11. James

    September 19, 2012 at 7:35 pm

    Thanks for the edits, Rob.

    And thank you, Jeff, for the good s advice … to which will adhere henceforth.

    We banned Burns from BlueNC for violating our only rule of conduct: intolerable obnoxiousness. You folks are ten times more tolerant than I could ever hope to be.

    Keep up the good work.

  12. Frank Burns

    September 19, 2012 at 7:39 pm

    Yes BlueNC where NC goes to whine.

  13. Ricky Leung

    September 20, 2012 at 9:55 am

    Frank, the information Ed provided show that not only do the “47%” pay other taxes outside of the federal income tax (they do pay other federal taxes), but that they also contribute a larger percentage of their income for those taxes outside of the federal income tax. And when taken together, “most Americans paying between 25 percent and 30 percent of their income — which is, by the way, a lot more the 13.9 percent Mitt Romney paid in 2011.”

    As for “Where do you think all those taxes for road to subdivisions come from? Every citizen needs to pay a share of taxes as they all use those roads too.”

    As multiple sources point out, those taxes often come from state and local taxes, which again, the “47%” contributes a greater percentage of their income to.

  14. david esmay

    September 20, 2012 at 9:37 pm

    NC Policy Watch, where Frank comes to whine.