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KillroyFool: "It's estimated that 47% of all US households (71 million) will pay no federal taxes in 2009."

From article you cite:

"The vast majority of households making up to $30,000 fall into the category, as do nearly half of all households making between $30,000 and $40,000.

As you move up the income scale the percentages drop.

Nearly 22% of those 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.

Of course, income taxes don't tell the whole story. Workers are also subject to payroll taxes, which support Social Security and Medicare.

When considering federal income taxes in combination with payroll taxes, the percent of households with a net liability of zero or less is estimated to be 24% this year, according to the Tax Policy Center's estimates."

You really want to have an AGI below $40k???

In addition, how is the Tax Policy Center estimating households?

The Tax Foundation reports 141,071,000 personal income tax returns filed for 2009 (from IRS data). See table 2,

If 47% of all US households equals 71 million households, then that implies 151 million plus households!!! 10 million more households than filed returns in 2007. In addition, what about households that file multiple returns, H files MFS, W files MFS, and each of two children who are still dependents file. One household, 4 returns.

I strongly suspect that something is rotten in the state of Denmark WRT to the initial claim about households.


In additon, as the original article notes (in a portion you conveniently ignored), federal income taxes are not the be all and end all of federal taxes. Social Security is effectively an income tax on only earned income, and is flat and ultimately regressive in that the actual rate paid declines as earned income grows past the ceiling; and social security does not tax capital income or or other unearned income.

In other words, if you want to discuss equity in federal tax policy, it is inequitable to focus on only federal income tax.

If you want to discuss equity, why is it equitable for some capital icome (which is unearned), to be taxed at a lower rate than the rate charged on earned income (labor)?

Regards, JAFO
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