Who Pays Taxes

Today, we released an updated analysis of who pays taxes.  While the answer is that everyone pays taxes whether that be federal or state income tax, state or local sales tax, property tax, payroll tax, or gas tax, the reality is that many low- and moderate-income households pay more as a share of their income in total state and local taxes than higher income households in North Carolina.  It is for this very reason that the federal income tax system has been designed to be progressive so that taken together the system can achieve greater equity.

And even here, as this additional state-level data for North Carolina shows, those North Carolinians not paying federal income taxes are overwhelming working households who did pay payroll taxes, the elderly who paid taxes in their lifetime and students who are very likely to pay taxes when they enter the workforce.

 

3 Comments

  1. Frank Burns

    October 3, 2012 at 6:26 pm

    The first step in income tax reform is to end the practice whereby citizens who pay no federal income tax, get a refund. Nobody should receive a refund if they paid no federal income taxes. This outrage needs to end.

  2. gregflynn

    October 4, 2012 at 9:08 am

    Federal Earned Income Tax Credit (EITC):

    “the best antipoverty, the best pro-family, the best job creation measure to come out of Congress.” – Ronald Reagan

    “one of the government’s most successful anti-poverty programs.” – Mark Everson, IRS commissioner under George W. Bush

  3. Frank Burns

    October 4, 2012 at 9:37 am

    I agree with Ronald Reagan, but we’ve extended the credits too far. When one half of the populace pays no federal taxes and some who pay no federal income taxes actually get a refund, then the system has gotten out of hand.

    In my opinion, the credit needs to be modified such that no refunds are paid to those who paid no taxes, and the percentage of citizens not paying any federal income taxes should be reduced from 50% down to 25%.

    In addition, there are way too many people receiving disability benefits. That system is flawed as well. If somebody receives disability for their own actions like being fat or being an alcoholic or drug abuser, they should not receive disability.