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

Good charts, Jason. Thanks for posting them.

I’m not sure what one can expect with regards to the retired. There’s no federal income taxes to pay – they’re retired.

With regards to children, I think a valid argument can be made that children are an investment that have a social good and it’s a behavior I think we should encourage. I don’t think it’s a coincidence that the European nations having the most fiscal issues are the ones with the lowest fertility rates (Greece, Italy, Spain).

Personally, I don’t have a problem with the system. I’ve posted before that I think it’s an interesting exercise on whether paying into the federal treasury should be required to vote in federal elections (I still think that every adult of voting age should have to pay some minute amount that is based on a % of the federal budget so that Americans have a greater connection to how much we spend even if actual amount paid in is trivial).

Like most libertarianism, I don’t think it’s an interesting exercise at all. In practical terms, it’s invariably a stalking horse for the exact, literal way the rich used to keep the poor disenfranchised. In terms of modern politics, the rhetoric chiefly comes from upper-income white males convinced poor black people are getting all their money, and if they had to pay taxes that’d somehow make them agree to eliminate paying benefits to themselves or something.

Not that the above applies to you, it’s just why I think it’s a useless hypothetical.

What change in behavior do you expect when the very poor - who don’t vote much anyway - have to pay taxes in, and still get greater benefits back out?

More to the point, while it might be “minute” to you, do you really think other taxes will drop to cover it? $10 extra a week might be significant to most, but the lowest few percent…

(Also, it immediately makes not having an income a federal tax crime, and extends the state’s reach…there’s a lot of things to worry about in that proposal which are not always immediately obvious!)

The CPS rocks. I’ve been on Census focus groups about it and the ACS. It’s best known for the March supplement which produces the annual poverty and income inequality numbers based on money income.

2008 CPS has 2007 income data. That’s pre-recession. Also note that the 2009 ARRA (stimulus bill) had many provisions aimed at reducing the tax burden (EITC expansion/making work pay credit). Those provisions are deliberately not picked up by this study. (The most recent CPS is 2011 with 2010 income data). I’d guess they’re trying to look at pre-recession numbers but you can’t wave away policy changes like they’re doing. (Did they adjust for these policy changes for this table? It’s not hard b/c you assume a static universe and deflate the values of various credits/subsidies)

So this table doesn’t refute the current talking pt for 2 reasons a) tax burden goes down has effect of the current recession b) ignores the tax policies in '09 and '10 that reduced the tax burden for many lower-income/middle class famlilies.

Weren’t the 09 & 10 changes temporary?

Making work pay disappeared with the Payroll tax cut. EITC expansion is still in existence. And probably will continue to be a “temporary” program like the AMT patch.

If someone has an updated set with 2011 data I’d love to see it. Until then I’m sticking with “this is the only attempt I’ve seen to figure out why.”