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Who Doesn’t Pay Taxes And Why

fishingboatproceeds:

Mitt Romney is in a bit of hot water for comments he made during a closed-door fundraiser about the 47% of Americans who don’t pay federal income taxes.

I’m generally pretty sympathetic to people saying stupid things in closed-door fundraisers, but the whole flap raises an interesting question: Is it really true that 47% of Americans pay no federal income tax? And who are these people? And do they believe that they are victims entitled to health care and housing?

So:

How many people don’t pay federal income tax in the US?

Lots of people. The 47% stat is accurate, as long as you only count federal income taxes. (More than 85% of Americans under 65 pay either income tax, federal payroll tax, or both—and almost all Americans who own land or buy things pay state and local taxes.)

Who are these people?

Many elderly people who live off social security pay no income tax (social security benefits are only taxable if your total income is over $25,000 a year). Only about 25% of Americans over the age of 75 pay federal income tax, but it’s important to remember that most of them did pay federal income tax when they were working.

Also, many young adults pay no income taxes, because they are full-time students or have very low incomes. You can see a chart here that shows that about 30% of 18-year-olds pay federal income tax, while over 65% of people in their 40s do.

People living in poverty are also unlikely to pay federal income taxes. A married couple filing jointly making under $18,700 annually pays no income taxes. But it’s worth noting that in 1996, 99.5% of all nontaxable returns came from people making less than $30,000 a year. Today, that number is closer to 76%.

The fastest growing segment of Americans who pay no tax are those who earn between $75,000 and $100,000 each year. As explained here, there’s been a 12,000% increase in nontaxable returns in this income category thanks to middle income tax cuts and tax credits introduced by both George W. Bush and Barack Obama.

Romney’s central mistake is imagining the data as static. In 2000, for instance, I paid no federal income tax. This doesn’t mean that I am a drain on the system: In fact, I have paid lots of federal income tax in other years. 2000 just happened to be a weird year, because I had a lot of health care expenses and not very much income.

This is the case for most Americans: Romney’s comments implied that the same 47% of Americans pay no federal income taxes every year. In fact, the members of that 47% are constantly changing as people age into and out of the work force. 

Do these people believe that they are victims entitled to health care and housing?

The most incendiary remark Governor Romney made was, “There are 47% who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care of them, who believe that they are entitled to healthcare, to food, to housing, to you-name-it.”

In fact, the number of Americans who feel the government should provide health care and food to those in need is much higher than 47%. 76% of Americans (including a majority of Republicans) favor medicaid, the program that offers health care to the poor. A majority of Americans also believe medicare, the program that offers health care to the elderly, is worth its cost. And more than three quarters of Americans support the federal food stamp program that provides food to low-income and elderly people.

America's Aversion to Taxes

politicalprof:

An excellent article from Eduardo Porter at the New York Times. This graphic is particularly useful. Some highlights:

Every developed country aspires to provide a better life for its people. The United States, among the richest of all, fails in important ways. It has the highest poverty and the highest infant mortality among developed nations. We provide among the least generous unemployment benefits in the industrial world. Not long ago one of the most educated countries in the world, the United States is slipping behind.

The reason is not difficult to figure out: rich though we are, we can’t afford the policies needed to improve our record. The politicians in Washington all know that we face a long-term fiscal crisis. By 2020, 70 million Americans are expected to be on Social Security, up from 45 million in 2000. The ranks on Medicare will swell to 64 million, up from 40 million in 2000. Virtually every economist knows that just maintaining Medicare and Medicaid benefits will require raising taxes on the middle class….

————————————

The big exception has been the United States. In 1965, taxes collected by federal, state and municipal governments amounted to 24.7 percent of the nation’s output. In 2010, they amounted to 24.8 percent. Excluding Chile and Mexico, the United States raises less tax revenue, as a share of the economy, than every other industrial country….

——————————

To a large extent, this is because we have chosen a tax system that raises relatively little revenue and inflicts maximum economic harm. Every other industrial country has a national consumption tax, which can be used to raise a lot of money without distorting people’s economic incentives. The United States, by contrast, relies mostly on taxes on labor and capital that damp people’s drive to work and invest, putting a drag on economic growth. And the tax code is riddled with preferences and loopholes that further distort people’s economic behavior.

It is tempting to blame the administration of George W. Bush for the tax shortfall. At the end of the administration of President Bill Clinton, tax revenue reached almost 30 percent of the nation’s economic output. The federal government ran a budget surplus. The Bush tax cuts sharply reduced the federal tax collection. Then the Great Recession further eroded tax revenue. And, of course, nobody wants to raise taxes in the middle of an economic downturn.

Yet Americans’ aversion to taxes runs deeper. We’ve been collecting less in taxes than other rich countries at least since the early 1970s, relative to size of the economy. But according to Gallup, only three times since the 1950s have more Americans said their taxes were “about right” than said they were “too high.” Scholars have resorted to cultural traits to explain our reluctance to pay for our government.

The imbalance between what we want and what we’re willing to either pay for or do without drives much of our budget woes these days. Until we square the circle of wants, demands and revenues, we’re screwed.

Obamas Release Tax Returns - NYTimes.com

President Obama and his wife, Michelle, reported adjusted gross income of $789,674 in 2011 and paid just over 20 percent of it to the federal government in taxes.

Their income declined nearly $1 million from the previous year, when the president was reaping larger amounts from sales of his bestselling books.

Mr. and Mrs. Obama paid $162,074 in income taxes, an effective tax rate of 20.5 percent. In a statement, the White House suggested that Mr. Obama believed that he should pay a higher rate, noting that his administration wants to reform the tax code and ask “the wealthiest Americans to pay their fair share while protecting families making under $250,000.” Mr. Biden and his wife, Jill, reported adjusted gross income of $379,035 and paid $87,900 in federal tax, an effective tax rate of 23 percent. That is roughly the same as what the couple reported last year.

(via apsies)

Romney is using the programs the poor depend on most as a piggy bank for tax cuts

Cutting subsidies from Amtrak and Planned Parenthood is the equivalent of President Obama promising to close loopholes for corporate jet owners. It’s red meat for the base, but a rounding error in context of the budget.

Romney’s real savings come in the next section. He’ll “send Medicaid back to the states and cap that program’s rate of growth,” and then “do the same for other programs, like food stamps, housing subsidies and job training.”

Sending the programs back to the states is a red herring. The key bit for deficit reduction is capping their rates of growth. Which is to say, cutting their rates of growth. Which is to say, cutting them.

What Romney is essentially proposing to do is finance a massive tax cut by cutting Medicaid, food stamps, housing subsidies and job training. In other words, the neediest Americans — and, to a lesser degree, federal workers — will be financing a massive tax cut.

(Source: Washington Post, via wonklife)


This guy is enough to make you barf up your bacon bagle. What a worthless TeaBagger who’s OD’d on his own excessive ego. His contract with the overwhelming majority of Republicans in Congress is equivalent to black mail. His note-signing minions promise to never raise taxes. When they even think of doing so, Norquist raises holy hell with them. Born with silver nitrate in his mouth, as the spoiled brattchild of a Polaroid bigwig, Norquist throws his weight around like he’s Mr. Big. Republicans who can’t think for themselves and who walk in lock step with orders from above, are easy prey for Norquist. Yet now he’s raised the bar higher with his threat that Republicans will Impeach President Obama if he doesn’t extend the Bush Tax Cuts. He thinks he has Obama on the defensive because cutting the program that extended the taxes of the wealthiest Americans, will also cut the taxes for everyone else as well. So Norquist thinks it’s a safe bet that Obama will bail, and he feels confident in his threat. Let’s hope the president keeps his promise NOT to extend the tax cuts for the wealth, yet seeks legislation to extend it for the rest of America.

This guy is enough to make you barf up your bacon bagle. What a worthless TeaBagger who’s OD’d on his own excessive ego. His contract with the overwhelming majority of Republicans in Congress is equivalent to black mail. His note-signing minions promise to never raise taxes. When they even think of doing so, Norquist raises holy hell with them. Born with silver nitrate in his mouth, as the spoiled brattchild of a Polaroid bigwig, Norquist throws his weight around like he’s Mr. Big. Republicans who can’t think for themselves and who walk in lock step with orders from above, are easy prey for Norquist. Yet now he’s raised the bar higher with his threat that Republicans will Impeach President Obama if he doesn’t extend the Bush Tax Cuts. He thinks he has Obama on the defensive because cutting the program that extended the taxes of the wealthiest Americans, will also cut the taxes for everyone else as well. So Norquist thinks it’s a safe bet that Obama will bail, and he feels confident in his threat. Let’s hope the president keeps his promise NOT to extend the tax cuts for the wealth, yet seeks legislation to extend it for the rest of America.

(via diegueno)

President Obama will renew his call for higher taxes on the rich on Tuesday, and he has invited Warren Buffett’s secretary to Washington to make his point.

Debbie Bosanek, longtime secretary to the Oracle of Omaha, will take in the State of the Union as a guest of the White House.

White House Communications Director Dan Pfeiffer confirmed Bosanek will join the first lady in her box in a post on Twitter.

Why Buffett’s secretary?

In some ways, she is the inspiration for Obama’s Buffett Rule, a proposed guideline to ensure that the wealthiest do not pay a lower overall tax rate than those who earn substantially less money.

“[Last year] what I paid was only 17.4% of my taxable income — and that’s actually a lower percentage than what was paid by any of the other 20 people in our office,” Buffett wrote in a New York Times op-ed last year.

Why? For most people, wages make up a majority of their income, so when they get a raise their average tax rate may go up.

But millionaires — and in Buffett’s case, billionaires — typically have several sources of income, some of which are taxed at lower rates.

John King: But some of the questions about when you release your taxes have not come — the president has raised them; his campaign has raised them - you’re right on that - but so have some of your rivals up here. Speaker Gingrich has said you owe them to the people of South Carolina before they vote. Governor Perry made that point as well before he left the race. Why not should the people of South Carolina before this election see last year’s return?

Mitt Romney: Because I want to make sure that I beat President Obama … I — I obviously pay all full taxes. I’m honest in my dealings with people. People understand that. My taxes are carefully managed and I pay a lot of taxes. I’ve been very successful and when I have our — our taxes ready for this year, I’ll release them.

Mitt Romney, in one of the most telling, jaw-dropping exchanges of the night at the South Carolina Republican CNN Debate

Let me reiterate: Romney says if he releases his tax returns now, he may not beat Barack Obama. If he thinks that will quash speculation about his taxes, Romney’s sorely mistaken.

(via cognitivedissonance)

(via cognitivedissonance)

My driver’s license expires, the milk in my refrigerator expires, the only thing that doesn’t expire is Grover Norquist’s pledge – and that’s nuts.

Rep. Steve LaTourette (R) of Ohio, who signed the Americans for Tax Reform pledge to never raise taxes in 1994.

The Christian Science Monitor’s Gail Russell Chaddock writes about increasingly strident Congressional criticism of the tax pledge.

This could be construed as a hopeful sign for the deficit supercommittee, which has been hung up on whether increased tax revenue.

Here’s another zinger from Democrat Rep. Rob Andrews (N.J.), one of the few Democrats who ever signed the pledge.

“I signed the pledge in 1992, and I understood it to mean that for the next term, if I were reelected, I would not vote to raise taxes,” he says. “I honored that pledge.”

“But I never renewed it. I never considered it to be like my marriage vows, I’m married to Camille Andrews not Grover Norquist. I promised her to be faithful until death do us part, and I mean it. I did not promise him to oppose tax increases until death do us part.”

(via dcdecoder)

(Source: dcdecoder, via seriouslyamerica)

diegueno:

realcleverscience:

approachingsignificance:

California teachers lack the resources and time to teach science

A statewide survey and interviews with LAUSD elementary school teachers and administrators find that students are receiving little hands-on science instruction.
Only 10% of elementary students regularly receive hands-on science lessons.  Just one-third of elementary teachers said they feel prepared to teach science, and 85% said they have not received any training during the last three years, according to the survey conducted by the Center for the Future of Teaching and Learning at WestEd, the Lawrence Hall of Science at UC Berkeley, SRI International and others.
“Kids are naturally curious and observant,” De La Torre said, “and the science helps them become higher-level thinkers.”

Photo Credit: Francine Orr

This is really not good. We need better education, particularly in the sciences, if we’re going to fix our planet, our jobs crisis, and keep in the lead as technological innovators, among other things.
I think this also demonstrates the genuine need for science centers, with trained staff that can offer unique and interactive science experiences. And with the current recession, many science centers - like schools - have been losing funding.

Here is your smaller government at work, right-wing reactionaries.

diegueno:

realcleverscience:

approachingsignificance:

California teachers lack the resources and time to teach science

A statewide survey and interviews with LAUSD elementary school teachers and administrators find that students are receiving little hands-on science instruction.

Only 10% of elementary students regularly receive hands-on science lessons.  Just one-third of elementary teachers said they feel prepared to teach science, and 85% said they have not received any training during the last three years, according to the survey conducted by the Center for the Future of Teaching and Learning at WestEd, the Lawrence Hall of Science at UC Berkeley, SRI International and others.

“Kids are naturally curious and observant,” De La Torre said, “and the science helps them become higher-level thinkers.”

Photo Credit: Francine Orr

This is really not good. We need better education, particularly in the sciences, if we’re going to fix our planet, our jobs crisis, and keep in the lead as technological innovators, among other things.

I think this also demonstrates the genuine need for science centers, with trained staff that can offer unique and interactive science experiences. And with the current recession, many science centers - like schools - have been losing funding.

Here is your smaller government at work, right-wing reactionaries.

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