# ZERO income tax **URL:** \ **Category:** Great Debates\ **Created:** [February 11, 2012, 4:32pm UTC](https://boards.straightdope.com/t/zero-income-tax/612527 "2012-02-11T16:32:21Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![Raygun99](https://avatars.discourse-cdn.com/v4/letter/r/6f9a4e/32.png) [@Raygun99](https://boards.straightdope.com/u/Raygun99)\ **Post date:** [February 12, 2012, 1:56am UTC](https://boards.straightdope.com/t/zero-income-tax/612527/41 "2012-02-12T01:56:15Z")
> [@sbright33](#): > > @Raygun- At least 1/2 the people in the USA have earned income. OK, but of the ones who don’t? You realize that those people are included in the statistic of the people who pay no income tax, right? ---
**Author:** ![sbright33](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@sbright33](https://boards.straightdope.com/u/sbright33)\ **Post date:** [February 12, 2012, 1:56am UTC](https://boards.straightdope.com/t/zero-income-tax/612527/42 "2012-02-12T01:56:20Z")
I’m out for the week! Continue on… ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [February 12, 2012, 2:07am UTC](https://boards.straightdope.com/t/zero-income-tax/612527/43 "2012-02-12T02:07:10Z")
> [@sbright33](#): > > @Ravenman- I’m not talking about tax time. I specified that. Please stop wasting my time. I said WHEN I CASH MY PAYCHECK at the bank. You have been wasting everyone else’s time with your irrational obsession with numbers relating to taxes. You don’t understand what marginal tax rates are, and you refuse to listen to rational, factual corrections to your misunderstandings. Pull out your last pay stub and look at the gross pay and the taxes taken out and tell us what that percentage is. Do not look at health care costs, retirement costs, or other elective reductions to your net pay. Tell us what that is. There is no way that it is 51%. Impossible. ---
**Author:** ![sbright33](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@sbright33](https://boards.straightdope.com/u/sbright33)\ **Post date:** [February 12, 2012, 2:21am UTC](https://boards.straightdope.com/t/zero-income-tax/612527/44 "2012-02-12T02:21:39Z")
@Ravenman- If I did the division you requested that answer would be nowhere near what the marginal tax rate is. Marginal tax rate is the rate we pay on the last dollar we earned. Not the total for the year, or for the paycheck. I’m wasting my time yes. Because I have to explain things like this to you for the 100th time, on other threads. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [February 12, 2012, 2:25am UTC](https://boards.straightdope.com/t/zero-income-tax/612527/45 "2012-02-12T02:25:52Z")
> [@sbright33](#): > > These are 2 different issues that are only vaguely related. > @Ruken- Most likely it would be 0% INCOME tax. > > @Ravenman- I’m not talking about tax time. I specified that. Please stop wasting my time. I said WHEN I CASH MY PAYCHECK at the bank. So which are we talking about? INCOME tax or all taxes WHEN YOU CASH YOUR PAYCHECK? Please pick one and stick with it. ---
**Author:** ![sbright33](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@sbright33](https://boards.straightdope.com/u/sbright33)\ **Post date:** [February 12, 2012, 2:26am UTC](https://boards.straightdope.com/t/zero-income-tax/612527/46 "2012-02-12T02:26:16Z")
It’s all explained here. I will illustrate it with a simple example when I return. [http://dbaron.org/views/taxes-2007.html](http://dbaron.org/views/taxes-2007.html) ---
**Author:** ![Mithras](https://avatars.discourse-cdn.com/v4/letter/m/f04885/32.png) [@Mithras](https://boards.straightdope.com/u/Mithras)\ **Post date:** [February 12, 2012, 2:37am UTC](https://boards.straightdope.com/t/zero-income-tax/612527/47 "2012-02-12T02:37:57Z")
> [@sbright33](#): > > It’s all explained here. I will illustrate it with a simple example when I return. > [Marginal income tax rates for a single California resident with only wage income, 2007](http://dbaron.org/views/taxes-2007.html) I believe it’s been brought up before but, like a lot mentioned here, not addressed by you. The 7.65% the employer pays is only on the first $100Kish of your income. Therefore, if you’re at the maximum marginal tax rate your employer isn’t paying it on the last dollar you earned. Therefore, your attempt to add it to your marginal rate is wrong on two counts (The first being that your employer pays it and not you. But that’s moot. Your employer doesn’t even pay it). For a Wikipedia reference: > **[Payroll tax | Social Security and Medicare taxes](https://en.wikipedia.org/wiki/Payroll_tax#Social_Security_and_Medicare_taxes)** > > Federal social insurance taxes are imposed on employers and employees, ordinarily consisting of a tax of 12.4% of wages up to an annual wage maximum ($118,500 in wages, for a maximum contribution of $14,694 in 2016) for Social Security and a tax of 2.9% (half imposed on employer and half withheld from the employee's pay) of all wages for Medicare. The Social Security tax is divided into 6.2% that is visible to employees (the "employee contribution") and 6.2% that is visible only to em ---
**Author:** ![sbright33](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@sbright33](https://boards.straightdope.com/u/sbright33)\ **Post date:** [February 12, 2012, 2:51am UTC](https://boards.straightdope.com/t/zero-income-tax/612527/48 "2012-02-12T02:51:19Z")
What you said is true. Yet when I earn an extra $10, I only keep $5.76. Those extra 0.76 are being paid by my employer, not by me, for my benefit. The SSFICA is not 7.65 beyond the maximum wage base. Bye! ---
**Author:** ![Frank](https://avatars.discourse-cdn.com/v4/letter/f/3d9bf3/32.png) [@Frank](https://boards.straightdope.com/u/Frank)\ **Post date:** [February 12, 2012, 3:27am UTC](https://boards.straightdope.com/t/zero-income-tax/612527/49 "2012-02-12T03:27:15Z")
> [@sbright33](#): > > What you said is true. Yet when I earn an extra $10, I only keep $5.76. Those extra 0.76 are being paid by my employer, not by me, for my benefit. The SSFICA is not 7.65 beyond the maximum wage base. Bye! I will happily wave bye-bye to someone who includes the employer’s share of SS/FICA in taxes to prove his point, but doesn’t include it in income. ---
**Author:** ![J\_Cubed](https://avatars.discourse-cdn.com/v4/letter/j/c6cbf5/32.png) [@J\_Cubed](https://boards.straightdope.com/u/J_Cubed)\ **Post date:** [February 12, 2012, 3:29am UTC](https://boards.straightdope.com/t/zero-income-tax/612527/50 "2012-02-12T03:29:24Z")
Two things: 1. If you are earning an extra $10 and getting $5 in your paycheck, you should fix your W4 withholdings. I often earn an extra $200 or $400 for pager duty, and my paychecks are about $150 or $300 more. But I’ve carefully set my and my wife’s withholding so that we skirt close to our expected tax responsibility, without going under. Your employer’s software is probably calculating the overtime checks as if you made that much all the time, so it withholds more. Don’t worry, you’ll be getting it back at the end of the year, but I understand the desire to not give the government an interest-free loan for a year. Talk to your HR person about working it out better. 2. You’re right, from a high-level economic perspective, that the money that your employer pays to Social Security on your behalf can reasonably be considered part of your compensation (to your employer, especially). Same with their part of the health insurance premiums and any 401k matching they do. If, however, you want to count that money as tax you pay, you also have to consider your income to be greater by that amount, as well, which slightly lowers the percentage it represents. ---
**Author:** ![Swords\_to\_Plowshares](https://avatars.discourse-cdn.com/v4/letter/s/b38774/32.png) [@Swords\_to\_Plowshares](https://boards.straightdope.com/u/Swords_to_Plowshares)\ **Post date:** [February 12, 2012, 3:38am UTC](https://boards.straightdope.com/t/zero-income-tax/612527/51 "2012-02-12T03:38:11Z")
> [@sbright33](#): > > What you said is true. Yet when I earn an extra $10, I only keep $5.76. Those extra 0.76 are being paid by my employer, not by me, for my benefit. The SSFICA is not 7.65 beyond the maximum wage base. Bye! How much are you paying in to your 401(k)? Do you have to chip in for health insurance? Either way, you’ve proven that you’re bad at math in the OP so I don’t have much reason to trust you. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [February 12, 2012, 4:01am UTC](https://boards.straightdope.com/t/zero-income-tax/612527/52 "2012-02-12T04:01:52Z")
> [@sbright33](#): > > What you said is true. Yet when I earn an extra $10, I only keep $5.76. Those extra 0.76 are being paid by my employer, not by me, for my benefit. The SSFICA is not 7.65 beyond the maximum wage base. Bye! At this income, if you are truly at the 35% marginal income tax bracket, neither you nor your employee is paying SS tax on your marginal income. Only Medicare. So marginal total Federal tax rate is now, what, 36.45%? Or 37.9% if you continue to insist on counting the employer contribution. And those 51% who pay no federal income tax? What’s their marginal total Federal tax rate? _They’re_ paying SS taxes on their marginal pay. But some of those 51% aren’t even wage earners. What’s the marginal tax rate for those in the 51% who actually have income? There’s really not much point in getting worked up about unemployed children, although are we even supposed to be getting worked up? What exactly is the point of the OP? ---
**Author:** ![Chessic\_Sense](https://avatars.discourse-cdn.com/v4/letter/c/7c8e57/32.png) [@Chessic\_Sense](https://boards.straightdope.com/u/Chessic_Sense)\ **Post date:** [February 12, 2012, 5:16pm UTC](https://boards.straightdope.com/t/zero-income-tax/612527/53 "2012-02-12T17:16:31Z")
> [@Ruken](#): > > But some of those 51% aren’t even wage earners. What’s the marginal tax rate for those in the 51% who actually have income? There’s really not much point in getting worked up about unemployed children > [@Lemur866](#): > > There are a lot of children, elderly, unemployed, stay at home moms, disabled, and so on. Let’s be clear, here. It’s that 46% of households pay no income taxes. Presumably, _someone_ in the household is making money unless they’re retirees, so I’d say most of the ‘untaxed’ are earning money. SAHMs and children don’t count. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [February 12, 2012, 5:37pm UTC](https://boards.straightdope.com/t/zero-income-tax/612527/54 "2012-02-12T17:37:27Z")
No, we are _not_ talking about households. If you read the [document](http://finance.senate.gov/newsroom/ranking/download/?id=9fe27e9f-a5e0-4010-8461-ffc00b5c00ef) (PDF warning) that was produced by the Joint Committee on Taxation and is the source of Sen. John Cornyn’s speech, about 51% of “tax units” (individual tax returns, be they single filers, head of household filers, married filing jointly filers or married filing separately filers) either had no income tax liability or negative liability (presumably those entitled to the EITC). ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [February 12, 2012, 10:53pm UTC](https://boards.straightdope.com/t/zero-income-tax/612527/55 "2012-02-12T22:53:23Z")
> [@Dewey\_Finn](#): > > No, we are _not_ talking about households. If you read the [document](http://finance.senate.gov/newsroom/ranking/download/?id=9fe27e9f-a5e0-4010-8461-ffc00b5c00ef) (PDF warning) that was produced by the Joint Committee on Taxation and is the source of Sen. John Cornyn’s speech, about 51% of “tax units” (individual tax returns, be they single filers, head of household filers, married filing jointly filers or married filing separately filers) either had no income tax liability or negative liability (presumably those entitled to the EITC). True, although **Chessic Sense** is correct to have pointed out my error, since there probably aren’t too many small children who are “tax units”. That all said, I’m still not entirely sure what the OP is trying to get out of this thread. ---
**Author:** ![SmartAlecCat](https://avatars.discourse-cdn.com/v4/letter/s/67e7ee/32.png) [@SmartAlecCat](https://boards.straightdope.com/u/SmartAlecCat)\ **Post date:** [February 12, 2012, 11:46pm UTC](https://boards.straightdope.com/t/zero-income-tax/612527/56 "2012-02-12T23:46:52Z")
> [@Ruken](#): > > That all said, I’m still not entirely sure what the OP is trying to get out of this thread. Outrage that lots of people aren’t paying enough taxes? Justification for plans to raise taxes on poor people and remove the EITC? ---
**Author:** ![Chessic\_Sense](https://avatars.discourse-cdn.com/v4/letter/c/7c8e57/32.png) [@Chessic\_Sense](https://boards.straightdope.com/u/Chessic_Sense)\ **Post date:** [February 13, 2012, 12:37am UTC](https://boards.straightdope.com/t/zero-income-tax/612527/57 "2012-02-13T00:37:51Z")
> [@Dewey\_Finn](#): > > No, we are _not_ talking about households. If you read the [document](http://finance.senate.gov/newsroom/ranking/download/?id=9fe27e9f-a5e0-4010-8461-ffc00b5c00ef) (PDF warning) that was produced by the Joint Committee on Taxation and is the source of Sen. John Cornyn’s speech, about 51% of “tax units” (individual tax returns, be they single filers, head of household filers, married filing jointly filers or married filing separately filers) either had no income tax liability or negative liability (presumably those entitled to the EITC). I was actually looking at [this Washington Post article](http://www.washingtonpost.com/blogs/ezra-klein/post/why-do-half-of-all-americans-pay-no-federal-income-taxes/2011/07/11/gIQA8olBuI_blog.html) and the .pdf in the second paragraph, which use the word “household”. The only difference between “household” and “tax unit” would be the married-filing-separately crowd and the adult-kids-at-home set. Roommates aren’t part of your household. So it seems like we’re splitting hairs now. In any case, kids and SAHM(D)s don’t count toward explaining the really high 46% figure. ---
**Author:** ![Great\_Antibob](https://avatars.discourse-cdn.com/v4/letter/g/e47c2d/32.png) [@Great\_Antibob](https://boards.straightdope.com/u/Great_Antibob)\ **Post date:** [February 13, 2012, 12:51am UTC](https://boards.straightdope.com/t/zero-income-tax/612527/58 "2012-02-13T00:51:04Z")
> [@Ruken](#): > > That all said, I’m still not entirely sure what the OP is trying to get out of this thread. My WAG (well, maybe not totally wild) is the concept that some people get a “free” ride plus outrage that for other people, over half their paychecks go to taxes. Of course, both ideas rely on some bad numbers, arithmetic, and reasoning (plus a bizarre idea of the meaning of “marginal”), but I’m sure the feelings behind the outrage are somewhat sincere. ---
**Author:** ![kaylasdad99](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kaylasdad99/32/3398_2.png) [@kaylasdad99](https://boards.straightdope.com/u/kaylasdad99)\ **Post date:** [February 13, 2012, 1:09am UTC](https://boards.straightdope.com/t/zero-income-tax/612527/59 "2012-02-13T01:09:18Z")
> [@sbright33](#): > > What you said is true. Yet when I earn an extra $10, I only keep $5.76. Those extra 0.76 are being paid by my employer, not by me, for my benefit. The SSFICA is not 7.65 beyond the maximum wage base. Bye! I’m not buying it. I’m looking at two old pay stubs from last year. Due to a step increase in my hourly wage, the gross on the later stub is $42.00 higher than on the earlier one. The net is $29.00 higher. Only 31% of the raise went away. ---
**Author:** ![SmartAlecCat](https://avatars.discourse-cdn.com/v4/letter/s/67e7ee/32.png) [@SmartAlecCat](https://boards.straightdope.com/u/SmartAlecCat)\ **Post date:** [February 13, 2012, 1:25am UTC](https://boards.straightdope.com/t/zero-income-tax/612527/60 "2012-02-13T01:25:52Z")
> [@kaylasdad99](#): > > I’m not buying it. I wouldn’t be surprised if it was due to a withholding artifact. He is simply reporting numbers from a paycheck. He might get some of that back come tax time. A more thorough analysis would ignore the paycheck withholding numbers and examine only the actual taxes as filed. [Previous page](https://boards.straightdope.com/t/zero-income-tax/612527.md?page=2) [Next page](https://boards.straightdope.com/t/zero-income-tax/612527.md?page=4)