Mitt Romney’s remarks notwithstanding, what would an ideal taxpayer distribution look like to you?
Keep it at 53% paying federal income taxes and 47% not paying?
Distribute it a bit more broadly/evenly; perhaps 80% paying federal income taxes and 20% not paying?
Bunch it up a bit towards the wealthy side; perhaps 20% (the wealthiest) paying federal income taxes and 80% not paying?
You first need to determine who’s in the 47% and why they’re not paying taxes.
Such as retirees who are former taxpayers and now have non-taxable income.
Before asking this question, you should first analyze that 47% number to exclude those that you would agree should not have to pay income taxes, such as:
Once you remove those that you cannot reasonably expect to pay taxes what is the remaining percent of non-tax payers that you feel should legitimately be paying income taxes?
People throw this 47% number out there without giving it any thought whatsoever.
You can’t get blood from a stone and you can’t get income taxes from those with no income.
How do you propose raising the taxpayer percent to 80% if not 80% of the population makes any income or makes enough income to tax? Give them a government salary so we can then tax it?
A dollar of tax/government fees is a dollar out of one’s pocket no matter whether it is called income tax, social security/medicare tax, sales tax, alcohol tax, cigarette tax, gasoline tax, customs duties, property tax, license fee… and no matter whether it is levied at the federal, state or local level. Conservatives don’t seem to understand this as they focus almost entirely on income tax. When you look at the broader picture very low income people can pay an amazingly high level of such fees and taxes (and only part of them make it up by receiving government transfers).
The ideal distribution? Nearly 100% of non-student adults pay income taxes, including the retired, because nearly 100% make enough money to have to pay taxes.
Not Social Security for the retired, but investment income.
It seems to me that conservatives bring up this number as a bad thing because they somehow think it represents people shirking their duty and not having skin in the game. I think it is a bad thing because it means people don’t make enough.
How you get there is a different matter entirely. I’m just talking where a good place to be is.
There’s no way to not be arbitrary about some specific “correct percentage” unless you analyze the makup of that 47% and put them into categories of who should and should not pay income tax. Many people simply aren’t going to make enough, and there’s no way that they can or will without the government just giving them a salary so they make enough to tax.
Also, not every senior citizen is living high on investment income. That’s just ridiculous.
What about the disabled? Soldiers overseas? The unemployed?
Give me the real number you are concerned with. It can’t be 47% unless you advocate shaking down Grandma in the nursing home living off of assisted living insurance, and our soldiers overseas, and the disabled, and the unemployed.
You have to disqualify these groups from paying income tax, right? Or are you really suggesting we actually do try to squeeze some blood from a stone? How do people put ‘skin in the game’ when they have no skin to put in?
What? Is that true? Then where is this 47% number coming from?
(BTW, my last reply I thought I was replying to Velocity again. I read too fast and thought your reply was him again. My bad, I interpreted what you wrote based on that misunderstanding so please ignore anything that sounded argumentative towards you as I’m pretty sure we actually agree on this for the most part.)
Airbeck, I suspect you did not understand Voyager’s post.
Regards,
Shodan
The Census Bureau says 23.3% of the population in 2013 was under 18. Almost all of those pay no taxes, so there’s half the 47 percent right there. Look at the other end, the elderly, and I think we can find most of the rest.
I seem to remember that Mitt had a swell dodge that kept him from paying federal income tax on his millions, so we can add in 1% more. Of course, he’d rather we pictured lazy poor people stealing welfare rather then super-wealthy tax dodgers. Fear and hate sells.
I thought it was 47% of households? Not 47% of people?
No problem, especially since I didn’t come back to the thread until after this post of yours.
When I retire in not too long I will almost certainly be paying income tax because Social Security will be a fairly small part of my income. That’s a good thing, and why I don’t exclude retired people from my “near 100%” number. Students in an ideal world will be studying and not working a lot, so they are excluded.
The lucky ducks in our society are not those who pay no taxes because their income is too low, but those of us whose income is high enough to pay lots of taxes.
Shodan, please read my subsequent post.
Sincerely,
Airbeck
Here’s the quote from Romney himself:
“Forty-seven percent of Americans pay no income tax”
Where’d you get households from?
PastTense has nailed the central point of this issue. There is practically nobody in this country who does not pay taxes. Taxes to fund state and local governments are often regressive, and have nothing whatsoever to do with one’s income.
The right number is whatever it takes to make the overall tax burden on the residents of this country identifiably progressive.
It used to be reported both ways, but even by 2013, the 47% number wasn’t true for households (http://www.tax-news.com/news/Fall_In_Percentage_Of_US_Households_Paying_No_Income_Tax____61934.html) and was still falling rapidly, so those who care more about causing outrage than truth switched to the “people” claim, without excluding children, students, and retirees, because it makes the number bigger. This is the same reason they’re so careful to specify “income tax,” since you can’t get people worked up over “something like 4% of people don’t pay any taxes at all.”
Here’s an article from The Wire that has the original pie chart from which the 47% claim derives. A couple of things: first, the number of people who pay some Federal income tax is 53.6%, which leaves 46.4% with no income tax liability. So, you only get 47& if you first truncate the percentage of people who do have some liability. Next, 28.3% of the 46.4% do pay the payroll taxes that fund two of the largest entitlements in the budget (Social Security and Medicare). So, we’re left with only about 18% with no Federal tax liability at all, more than half of whom are elderly.
So, roughly 82% already pay some kind of Federal tax, even if it is not technically income tax. The original argument that those 47% are “takers”, or somehow have no skin in the game is wrong. Even if the statement itself is technically correct, it is misleading as hell.
Also note that the article has another chart showing that total share of taxes is pretty damn close to share of income for each income group. It looks like the bottom 60% pay slightly less than their share of income, and the top 20% slightly more. So, overall, the system is very slightly progressive.
Another source of real numbers is available here.
They report on 2006, when 41% of households had no federal income tax liability. There’s some interesting breakdown by filing status and by resident state, and also a nice little graph showing how this number has varied over the years.
For those looking for a better demographic breakdown, here’s 2005 data with demographic breakdowns like age, race, income level, and employment status.
One element from both of these that I’d bring up: of those with no tax, 52.9% were getting some kind of refundable tax credit like child tax and EIC. So not only are these people (about 20% of all households) paying no income tax, but they’re actually receiving government assistance in the form of “tax refunds.”
Even with payroll taxes factored in, some of these people are still net takers from the tax system. For example, wages of $20,000 will cost you $1500 in federal payroll tax, but with two kids you might have $6,000 in refundable tax credits. This isn’t a refund of money paid in - it’s just welfare under another name.
I’m not necessarily opposed to helping out low-income families… but I strenuously object to doing it through the tax system and calling it a tax refund. Call it what it is, and put it on the right line item of the federal budget.
If they’re voting, they’re 18 or older.
You can’t squeeze blood from a stone.
No, the real problem these days is not that the poor aren’t paying enough tax but that the rich aren’t paying nearly enough. We should put the top tax rates back up around 95%. Capital naturally tends to pool at the top, and when that happens the economy stagnates. Aggressive taxation of the richest individuals pumps that money back into the economy and raise the boats for everyone.
This. And what this indicates is that the “47%” statistic really means that 47% pay no federal income tax not because they are undertaxed, but because they don’t earn enough money to have any liablity to income tax. They’re paying their fair share; it’s just that their fair share is nil. It’s an indictment, in other words, of the highly skewed distribution of income in the US. If Romney’s first thought on being seeing this glaring evidence of inequality is “this gives the Democrats a built-in advantage!”, then he really is profoundly morally deficient.