So who doesn't pay Federal income taxes, anyway?

Lulz, it’s old people.

I have a hard time blaming the old people for not wanting to pay taxes at that point, mainly because if their payroll taxes had been managed correctly we wouldn’t be subsidizing them to the degree we are. So I understand their reluctance to give up promised benefit programs they paid into for decades just because the federal government used the money to pay for other things over the years.

It’s nothing to do with that, it’s the response to that “50% of people don’t pay taxes!” bullshit Rush, among others, is selling.

Wait wait wait wait wait. So, when people throw around the 50% of Americans don’t pay federal income tax, that number really only counts if you include the very young (who don’t work) and the very old (who don’t work)? If you look at the 25-65, the number is more like 20-30%?

Wow. Thanks for the chart.

Yes. Turns out that like many right wing canards, it’s bullshit.

I like the phrase ‘tax unit’. Is that also known as a person?

Well clearly almost everyone pays some form of tax in the US. It would be very hard to avoid the combination of sales, payrole, income, and property taxes.

However, WRT federal income tax it looks like ~30% of “tax units” do not pay federal income taxes in their prime earning years. So while the GOP talking point is off, it is not off by THAT much. And perhaps that gap could be explained by the definition of tax unit, although the more likely explanation is that they lumped in the old and young as you suggest.

That is a cool graphic, it is a nice way to look into the data.

I would suppose it’s a tax return.

So, an individual or a married couple being treated as a single entity.

Yeah, tax unit is everyone on the return + dependents.

Reading through the Hamilton project link:

Furthermore, rising unemployment during the Great Recession has meant that the proportion of American families paying no federal taxes is unusually large today. Unemployed workers without incomes naturally don’t face tax liabilities. But as they find jobs and rejoin the labor force, they will once again contribute to the federal system. Indeed, some of the trends we see today are less illustrative of an unfair tax advantage for the poor; rather, the trends indicate the existence of a group of unfortunate families who have found themselves affected by hard times. And young people today have been particularly hard hit: many are unemployed or weathering the storm in graduate schools, meaning that they are, thus, not paying taxes. When looking more specifically at middle-aged workers with jobs, 96 percent paid federal income or payroll taxes.

So it’s really about people who aren’t in the labor force - disability, unemployed, not sure what else. For people who are in the labor force, I think they’re saying it’s poor people getting the EITC for a few years while they’re young and have kids. Once they get older they pay net taxes again.

On those people who aren’t paying Federal income taxes, they pay a surprisingly high amount in state and local - 12% of income for the bottom 20%.

Sure they pay net taxes again. The usual line is that they don’t pay “federal income tax”.

The graphic shows that between 20 and 35 years of age, less than 70% of people pay federal income taxes. It doesn’t show unemployment for those age groups so we could easily determine what percentage of people don’t pay federal income taxes.

While I liked the graphic, I have to say I’m not a fan of quoting from an advocacy group – they play with the numbers and use weasel words all of the time . I don’t remember what your line was from the last time someone tried to link or quote Cato but I’m sure it was something akin to “well they are fucking liars so I don’t care what they say.” The Hamilton project is an arm of the democratic party – while it is associated with Brookings (who I like) it is separate.

By net taxes I meant “net taxes are positive,” as in the deductions and credits don’t apply anymore and they no longer get back more than they pay. The 2010 labor force participation rate is currently 71% to 82% for the two halves of 20-35; the unemployment rate inside that is 10 to 15% for the two halves. That’s around 7.5% + 20% = 27.5% of the population for those age groups with little to no income. You’d need to somehow back out the workers per household number to fully combine that with the tax units below. The years also don’t match up perfectly, but hey, close enough for forum work.

I’m not sure what the analogy is to conservative think tanks that tell outlandish lies like the Ryan budget projection. You can look at the sources they use; the graph is from the March 2008 CPS.

What is this chart supposed to show? How are you not disgusted at that many people not pulling their own weight? Excluding below 18 and over 65, its still fucking ridiculous.

There are way too many people not contributing to the treasury but yet able to vote on how its spent. That’s fucked and needs to be changed.

The chart on page 6 shows the percentage paying taxes based on reported income.

With the child tax credit, mortgage credit, education deductions, standard deductions, etc… until you get into the 30k+ a year income area, there’s a good chance you won’t pay income taxes.

If you own a house, got kids, are paying for their education, and you’re only making 30k a year, you’re going to need a hell of a lot more than tax credits to get by.

Well, that’s a bit subjective. You are saying that 20% is too high? Keep in mind that nearly 10% of that is unemployment. So, let’s exclude those people (they are trying to find a job, right?). So 10% of Americans in earning years aren’t paying any sort of federal taxes, perhaps because they are not working. Keep in mind that Romney is in that 10%, at least where his major money appears. Anyone who makes money on capital gains and not income would be in that 10%. I don’t know the figures, but it won’t change things that much. Let’s say 2%. So 8% of Americans (give or take) could be seen as not pulling their own weight by your definition.

I don’t find that disgusting. I’m curious why you do.

Oh, and NONE of us actually get to vote on how the money is spent. You know that right?

The romney thing is kind of shit though. That is one loophole they really need to fix ASAP, but it will never happen.

Atsa one place I always-a wanna visit: Dollars, Taxes.

I read the whole paper and I looked in vain for any detailed discussion how they made this analysis. Simply saying oh we got this data from the Census bureau doesn’t cut it. At least most Cato papers have a 50 page document backing up the press release and describing their methodology.

You’ll forgive me if I am tad skeptical of information published by a organization who’s advisory committee includes numerous prominent Democrats like former majority leader Richard Gephardt. Especially when the don’t show their work.

It took me 7 minutes to find that:

  1. The CPS is the census population survey.
  2. There’s a data series for federal tax liability after credits - FEDTAX-AC.
  3. A pre-processed table is not available, but the raw data can be found here.
  4. That contains the raw data including that line item. Cross-reference with the data definition, shove it into SQL, correlate by age.
  5. Done.

It’s just graphing that data set. All the other charts in the webpage have the citation on them - Tax Policy Center, etc. But yeah, uh, totally like Heritage claiming the Ryan tax plan would reduce unemployment to 2.8%.

More visualizations.

Again, old people and EITC.