The Motley Fool Discussion Boards

Previous Page

Politics & Current Events / Political Asylum

URL:  https://boards.fool.com/eighty-percent-of-all-taxpayers-30376898.aspx

Subject:  Eighty percent of all taxpayers Date:  11/12/2012  2:07 PM
Author:  BlueGrits Number:  1835930 of 2242045

"The key number he cited is that 47% of Americans "pay no income tax." The statistic is true as far as it goes, but it doesn't come close to reaching the finish line. In fact, its shock value derives from the legerdemain of focusing solely on the federal income tax. This misleads Romney and his audience into thinking that the group in question is mostly people on a lifelong dole.

The truth is that the vast majority are people who are working or who have worked in the past. Their ranks include millions of Americans who are now retired, living on Social Security and Medicare benefits they paid for throughout their working lives. Many others are those who were booted into culverts by the economic crisis and are today struggling to get back on the road.

The 47% statistic comes from the Tax Policy Center, a project of the Urban Institute and Brookings Institution, which crunched IRS data to get it. TPC's actual finding is that 46.4% of "tax units" — that's IRS filers and non-filers combined — will have zero or negative U.S. income tax liability for 2011. (Romney would have been better advised to say 47% aren't paying income taxes now, rather than that 47% "don't pay taxes," as if that's a permanent condition.)

The worst flaw of this figure is that it ignores the burden of other federal taxes shouldered by many in the zero-income-tax group.

Principally, these are payroll taxes, which are levied this year on the first $110,100 of wage income for Social Security and all wage income for Medicare. Indeed, four-fifths of all taxpayers pay more in payroll taxes than federal income taxes as a percentage of income. The crossover point is about $100,000 in wage income. (By definition, the statistic counts the employer's share of payroll taxes as a burden on the worker.)

What this means is that a large share of all households paying no income tax are working households with substantial payroll tax bills. They're the antithesis of people who can't be convinced to "take personal responsibility" for their lives."

http://articles.latimes.com/2012/sep/19/business/la-fi-hiltz...


The above may not be news to some, but I heard the 80% figure on TV today and had to check it out. Sure enough, it's true...
Copyright 1996-2019 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us