Record Numbers of People Paying No Income Tax

RAMSTORIA

RAMSTORIA

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Introduction

Tax Day, April 15, is looming for the nearly 142 million Americans who will file a tax return for income earned in 2009. While most taxpayers worry about paying the correct amount and even pay for professional assistance to make sure they do, many millions of tax filers will be "nonpayers."

A nonpaying tax return is one filed by an individual or couple who, thanks to legal credits and deductions, owes nothing. Most people who get a refund after filing their tax returns are not nonpayers; they have overpaid their taxes through paycheck withholding and are being refunded just a tiny portion of that payment.

But during 2008, more than a third of all tax returns resulted in complete nonpayment; that is, people got back every dollar that was withheld from their paychecks during the year. Many got quite a bit more, turning Tax Day into a payday.

Two Records Set in 2008: Most Nonpayers and Highest-Earning Nonpayers

Nonpaying status used to be a sure sign of poverty or near-poverty, but Congress and the President have changed the tax laws to pull much of the middle class into the growing pool of nonpayers. The income level at which a typical family of four will owe no income taxes has risen rapidly, now topping $51,000.

As a result, recently released IRS data for the 2008 tax year show that a record 51.6 million filers had no income tax obligation.[1] That means more than 36 percent of all Americans who filed a tax return for 2008 were nonpayers, raising serious doubts about the ability of the income tax system to continue funding the federal government's ballooning expenditures.
Click to expand...

http://www.taxfoundation.org/publications/printer/25962.html

link has a lot more details, a pretty graph, a couple tables etc.

the numbers have increased dramatically over the last 10 years, for both percentage of nonpayers and the top income of nonpayers.

discuss.
 
[quote name='Msut77']Headline: Record number of people have no income.[/QUOTE]

its not like the number has been increasing every year for the last 40 years or anything... well i mean it has, but still!
 
[quote name='speedracer']The marginal tax rate for the richest Americans has gone from 70% in 1980 to 35% today.

Discuss.

http://feedproxy.google.com/~r/clus...you-can-guess-where-theyre-headed-next-2010-4[/QUOTE]

and yet...

fed_incometax_ff183graph3-2.jpg
 
That graph just shows how disgustingly concentrated wealth is in the US with a tiny percentage of people making the vast majority of the money.
 
[quote name='dmaul1114']That graph just shows how disgustingly concentrated wealth is in the US with a tiny percentage of people making the vast majority of the money.[/QUOTE]
I lol'd. It's one of those rare times where there just isn't wiggle room for discussion.

That graph paired with the one on my link prove with essentially zero room for maneuver that wealth is concentrated at the top in percentage terms not seen anytime in America's near history.

failbucket (awesome btw msut) and bob will be along anytime now to explain how, despite slashing taxes on the rich, despite staggering wealth concentration, the rich are getting hosed in this country.
 
you guys are so quick to jump down the throat of the top 1%... theyre irrelevant for the time being. 36% of tax filers, 50 million people, dont pay income tax, not a penny. this isnt 36% that get a refund, they pay 0.

if you think that the top 1% should pay over 35% thats fine (and they will come 2011 when the bush tax cuts expire), but do you also think that 36% of filers shouldnt pay anything?
 
I think people making under $10,000 (maybe $15,000) should pay nothing. No idea what % of the population is (nor much care). No use taking taxes from people who can barely get buy and are likely needing gov't assistance (welfare, foodstamps, section 8 housing) etc. anyway. Let them keep their money and need less assistance.
 
[quote name='RAMSTORIA']if you think that the top 1% should pay over 35% thats fine (and they will come 2011 when the bush tax cuts expire), but do you also think that 36% of filers shouldnt pay anything?[/QUOTE]
Perhaps this will be the one where the light bulb is lit:

Do you think that 36% of filers wouldn't be paying anything if money wasn't so concentrated in the top 1%? Imagine a world where a group increases its total share of American taxes paid (which is no small figure) from 25% to over 40% overall, or in their terms an increase of 60% (!!) in 22 years. Imagine that AT THE EXACT SAME TIME the same group of people getting their *ACTUAL* marginal tax rate cut from 70% to 35%, a decrease of 50% in their terms. Think about those numbers and how much wealth they would have to accumulate for those two things to occur simultaneously.

And then think very hard about UncleBob's valuable insight.

And then you'll understand why we can't have nice things.
 
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[quote name='RAMSTORIA']you guys are so quick to jump down the throat of the top 1%... theyre irrelevant for the time being. 36% of tax filers, 50 million people, dont pay income tax, not a penny. this isnt 36% that get a refund, they pay 0.

if you think that the top 1% should pay over 35% thats fine (and they will come 2011 when the bush tax cuts expire), but do you also think that 36% of filers shouldnt pay anything?[/QUOTE]
I think that 36% is already getting shafted enough.
 
I know this might come as a shock - and will even contradict some of what I've said in the past - but I honestly don't begrudge anyone who doesn't pay income taxes because they're below the earnings threshold.

I do, however, begrudge those who get back more in their "refund" than they paid in, due to the crazy way our government figures tax "credits". Although, to be honest, I don't even begrudge those individuals as much as I fault our government for letting them do it.
 
[quote name='UncleBob']I think we should just beat up all the rich people and take all their money. That'd be awesome.[/QUOTE]

and then when they are all gone, we can find the next "rich" people in line and get them fuckers
 
[quote name='speedracer']Do you think that 36% of filers wouldn't be paying anything if money wasn't so concentrated in the top 1%? Imagine a world where a group increases its total share of American taxes paid (which is no small figure) from 25% to over 40% overall, or in their terms an increase of 60% (!!) in 22 years. Imagine that AT THE EXACT SAME TIME the same group of people getting their *ACTUAL* marginal tax rate cut from 70% to 35%, a decrease of 50% in their terms. Think about those numbers and how much wealth they would have to accumulate for those two things to occur simultaneously.[/QUOTE]

Well said. Keep in mind also that just letting the Bush tax cuts expire will only raise the top rate to 39.6%, still a lot lower than 70%. I'm not advocating that it be raised again to 70%, but complaints that you have to pay a lot of taxes when you're increasing wealth that much more than poorer folks just don't hold water, at least with me.
 
[quote name='speedracer']Perhaps this will be the one where the light bulb is lit:

Do you think that 36% of filers wouldn't be paying anything if money wasn't so concentrated in the top 1%? Imagine a world where a group increases its total share of American taxes paid (which is no small figure) from 25% to over 40% overall, or in their terms an increase of 60% (!!) in 22 years. Imagine that AT THE EXACT SAME TIME the same group of people getting their *ACTUAL* marginal tax rate cut from 70% to 35%, a decrease of 50% in their terms. Think about those numbers and how much wealth they would have to accumulate for those two things to occur simultaneously.

And then think very hard about UncleBob's valuable insight.

And then you'll understand why we can't have nice things.[/QUOTE]

i realized after the first couple of replies that this would turn into a top 1% debate. like i said, the story i posted has nothing to do with the top 1%, and its not my intention to imply that the top 1% are or are not paying their fair share (i agree that that their bracket could go higher).

the point is that we have over a third of tax payers not paying anything in income taxes. bob pointed out that many are getting refunds instead of just having the tax burden leveling out to zero. the report i link shows that of the 51.5 billion in credits from EITC 50 billion was refunded instead of just leaving ones tax burden at $0. also, despite what msut would like to think, the number of people paying zero has risen steadily over the last 40 years, regardless of how higher income brackets have gone up or down (nevermind the economy going up and down the last 40 years). tax refunds are becoming another, more subtle, form of welfare that are adding to the growing united what-about-me-nanny states. for lack of a better metaphor, this is like letting your kids decide what to buy for dinner every night. im not going to say that there arent people that shouldnt have to pay. and im also not going to argue that everyone should pay 15% like some sort of flat tax. but i am going to say that people should pay something be it 5% or 70%. if you know you arent getting that money back i guarantee that people keep a closer eye on where its being spent.
 
[quote name='Papa Neorev']and then when they are all gone, we can find the next "rich" people in line and get them fuckers[/QUOTE]

Yep, who wants to stay here when people want to move the highest tax bracket from 35% to 70% when they make $700,000. Let's do the math.

$8,035 of it will be taxed at 10% which is $835.00
$25,600 of it will be taxed at 15% which is $3,840.00
$48,300 of it will be taxed at 25% which is $12,075.00
$89,299 of it will be taxed at 28% which is $25,003.72
$201,399 of it will be taxed at 33% which is $66,461.67
$327,050 of it will be taxed at 35% which is $114,467.50
For a grand total of $222,682.89 dollars in taxes.

Ok now what if we raise it to 70%?
$8,035 of it will be taxed at 10% which is $835.00
$25,600 of it will be taxed at 15% which is $3,840.00
$48,300 of it will be taxed at 25% which is $12,075.00
$89,299 of it will be taxed at 28% which is $25,003.72
$201,399 of it will be taxed at 33% which is $66,461.67
$327,050 of it will be taxed at 70% which is $228,935.00
For a grand total of 337,150.39 dollars in income taxes alone.

How is it fair that successful people would have to give nearly half their money to income taxes alone? Because it is for the greater good? yeah sounds alot like income redistribution. If I ever made that much I would be happy to pay my share in taxes, but what is my share? 70%, 80% 90%? It is not the point that they can survive on what they have left. We can all survive on $20,000 should the government just take all money and give us each 20,000 a year?
 
[quote name='speedracer']
failbucket (awesome btw msut) and bob will be along anytime now to explain how, despite slashing taxes on the rich, despite staggering wealth concentration, the rich are getting hosed in this country.[/QUOTE]

I am not sure why you continue to misunderstand my views. I mean I expect Msut to be incapable of such, but (I thought) you are smarter than that.

I have no intention of saying what you think I will say. I see nothing here to disagree with, the rich have it great in this country, that's sort of why people come here to try and be rich, and always have.

I just don't have the torches and pitchforks out for the rich as the answer to all the nations problems that you and others have, that doesn't mean I'll disagree with stats. I'm more interested in figuring out how to increase the numbers of those getting rich, rather than playing Robin Hood.
 
[quote name='mykevermin']http://abcnews.go.com/Business/Tax/ge-exxon-paid-us-income-taxes-09/story?id=10300167[/QUOTE]

Would no more tax holiday for GE really end up helping Mr. and Mrs. Taxpayer? Doubtful. "The average Joe should be in favor of lower corporate taxes," says Hodge, "because ultimately they are paying the corporate income tax. Either as workers, getting lower wages and fewer jobs, or as consumers, paying higher prices, or as retirees, getting lower dividends and earnings on their investments."
 
HE'S THE PRESIDENT OF THE TAX FOUNDATION. NO fuckING SHIT.

why don't you ask the president of the American Coalition for Clean Coal Electricity if coal can be clean, like you don't know what the answer is gonna be.

Really, now, are you a blithering idiot or a troll? I can work to remedy you of the former, but if you're the latter, you'll just go back to the ignore list.
 
[quote name='mykevermin']HE'S THE PRESIDENT OF THE TAX FOUNDATION. NO fuckING SHIT.

why don't you ask the president of the American Coalition for Clean Coal Electricity if coal can be clean, like you don't know what the answer is gonna be.

Really, now, are you a blithering idiot or a troll? I can work to remedy you of the former, but if you're the latter, you'll just go back to the ignore list.[/QUOTE]
its your article, don't post it if you don't believe what it says.
 
Tsk, tsk. Your literacy is dismal. What dude from the Tax Foundation says doesn't change that corporations like Exxon and GE, who made BILLIONS UPON BILLIONS in profits, did not pay any taxes in the US in 2009.

Also, I'm not liable if the media colludes with garbage think tanks like Tax Foundation, Club for Growth, Cato, Heritage, AEI, Brookings, etc., where all these fucking policy pricks sit around all day and try to build policy around the conclusions they had prior to research.

There's your liberal media: interviewing members of think tanks with vested partisan interests in making partisan neoconservative claims, tempering the sheer gall of the corporations that the article exposed.
 
[quote name='mykevermin']Tsk, tsk. Your literacy is dismal. What dude from the Tax Foundation says doesn't change that corporations like Exxon and GE, who made BILLIONS UPON BILLIONS in profits, did not pay any taxes in the US in 2009.

Also, I'm not liable if the media colludes with garbage think tanks like Tax Foundation, Club for Growth, Cato, Heritage, AEI, Brookings, etc., where all these fucking policy pricks sit around all day and try to build policy around the conclusions they had prior to research.

There's your liberal media: interviewing members of think tanks with vested partisan interests in making partisan neoconservative claims, tempering the sheer gall of the corporations that the article exposed.[/QUOTE]
let me ask you why corporations do so much business overseas? It couldn't be because of the high corporate tax rates in America could it?
 
[quote name='dmaul1114']I think people making under $10,000 (maybe $15,000) should pay nothing. No idea what % of the population is (nor much care). No use taking taxes from people who can barely get buy and are likely needing gov't assistance (welfare, foodstamps, section 8 housing) etc. anyway. Let them keep their money and need less assistance.[/QUOTE]



well... there's a nice thing called the earned income credit....

http://www.irs.gov/individuals/article/0,,id=96466,00.html

http://www.irs.gov/individuals/article/0,,id=150513,00.html

So most of the people you mention already get all their taxes back... + the taxes that you paid...

It's a good intentioned tax credit that gets totally abused by quite a few people.
 
[quote name='Knoell']let me ask you why corporations do so much business overseas? It couldn't be because of the high corporate tax rates in America could it?[/QUOTE]

Exxon does business in the US, they should pay taxes in the US. Their year-over-year profits are enormous. If they don't want to pay taxes in the US, they can GTFO.

EDIT: Additionally, corporate tax rates are comparable to marginal tax rates for the wealthy in the US - they've declined *remarkably* since Reagan as raw percentages, yet they're still "too high." Your "high corporate tax" is an intentional vagary that you and yours are too scared to pin a number to, because that would mean moving from having a philosophy to having policy suggestions - an important step for any politician.
 
[quote name='Afflicted']well... there's a nice thing called the earned income credit....

http://www.irs.gov/individuals/article/0,,id=96466,00.html

http://www.irs.gov/individuals/article/0,,id=150513,00.html

So most of the people you mention already get all their taxes back... + the taxes that you paid...

It's a good intentioned tax credit that gets totally abused by quite a few people.[/QUOTE]


I know. My point is that it's silly to take their money and give it all back to them (plus some).

Just don't tax those very low income folks, and thus cut back on some entitlements to them since they keep 10% more of their paycheck etc.
 
[quote name='mykevermin']Exxon does business in the US, they should pay taxes in the US. Their year-over-year profits are enormous. If they don't want to pay taxes in the US, they can GTFO.

EDIT: Additionally, corporate tax rates are comparable to marginal tax rates for the wealthy in the US - they've declined *remarkably* since Reagan as raw percentages, yet they're still "too high." Your "high corporate tax" is an intentional vagary that you and yours are too scared to pin a number to, because that would mean moving from having a philosophy to having policy suggestions - an important step for any politician.[/QUOTE]

Exxon does pay taxes according to your article they had to pay 15 billion in taxes or 47% of earned income. They reinvested the billions of dollars into other projects out of the country in order to avoid paying the taxes. So they keep their money and reinvest it, what business is that of the government?
Contrary to your belief, all earnings do not belong to the government first, and the company/individual second.
 
Well, then, you should be cheering the people in this thread who aren't paying taxes.

They're just "reinvesting" in things like "food" for "dinner."
 
paying 15 billion means they lose 15 billion, and the gov't gains 15 billion. That is not what happened, you admit they poured it into other projects and reinvested it and kept it. That's gaming the system. Gov't should put an end to that kind of shit. If these corpos are going to be treated like people (Citizens United case) then they should pay taxes like people without gaming the system.

Oh and I don't know where myke said that 'all earnings belong to the gov't'. Cool strawman brah.
 
[quote name='IRHari']If these corpos are going to be treated like people (Citizens United case)[/QUOTE]

they should be subject to capital punishment laws, starting with Massey Energy.
 
[quote name='IRHari']paying 15 billion means they lose 15 billion, and the gov't gains 15 billion. That is not what happened, you admit they poured it into other projects and reinvested it and kept it. That's gaming the system. Gov't should put an end to that kind of shit. If these corpos are going to be treated like people (Citizens United case) then they should pay taxes like people without gaming the system.

Oh and I don't know where myke said that 'all earnings belong to the gov't'. Cool strawman brah.[/QUOTE]

I believe one of you has said in the past that we should raise tax rates so that people will reinvest in their business more because it won't be worth paying money out against that high of a tax rate. But now we are saying, "hlafz yous proftiz belongs to us!"

I have a problem with the corporations doing this sort of thing, but what is the solution? raising tax rates more? how about lowering them? no we couldn't do that then the government won't be able to fund their wasteful projects.
 
[quote name='mykevermin']they should be subject to capital punishment laws, starting with Massey Energy.[/QUOTE]

Sergeant Schultz weighed in on safety rules back in June 2009:

[quote name='Don Blankenship']
They’re very difficult to comply with. There’s so many of the laws that are, if you will, nonsensical from an engineering or a coal mining viewpoint. A lot of the politicians, they get emotional, as does the public, about the most recent accident, and it’s easy to get laws on the books that are not truly helping the health or safety of coal miners. I think we need to be very pragmatic and very careful when we’re passing laws of that nature to make sure that we create as much safety and as much health as can be created for each of the resources we expend.[/QUOTE]
 
[quote name='elprincipe']Our tax system is so fucked up. Mom and Pop businesses pay 35%, while Exxon and GE pay nothing. Thanks for posting that, but damn it made me pretty angry to read it.[/QUOTE]


actually if you look at exxon's 10K filing it shows they had a 47% Effective Income tax rate. Now I don't claim to be very good at reading 10K's and I'm not really bored enough to really plow through it... but I don't think it saw anywhere how much of the taxes were paid in the US or in other countries. I'm assuming the thought is they paid 0 in US income taxes because further down the filing it lists "Exxon Mobile Corp Parent Guarantor" as having a negative income tax and "All Other Subsidiaries" as paying 16 billion in income tax.

I could be way off base but all the articles about them paying 0 taxes in the US that I found didn't have any numbers to back up what they were saying.
 
[quote name='Afflicted']actually if you look at exxon's 10K filing it shows they had a 47% Effective Income tax rate. Now I don't claim to be very good at reading 10K's and I'm not really bored enough to really plow through it... but I don't think it saw anywhere how much of the taxes were paid in the US or in other countries. I'm assuming the thought is they paid 0 in US income taxes because further down the filing it lists "Exxon Mobile Corp Parent Guarantor" as having a negative income tax and "All Other Subsidiaries" as paying 16 billion in income tax.

I could be way off base but all the articles about them paying 0 taxes in the US that I found didn't have any numbers to back up what they were saying.[/QUOTE]

They paid nothing here but 47% total, which means they paid a lot in other countries. Which is bullshit since they made most of their money here.
 
[quote name='elprincipe']They paid nothing here but 47% total, which means they paid a lot in other countries. Which is bullshit since they made most of their money here.[/QUOTE]

GE made most of their money overseas, and loses a certain amount of money here. Do you think they should have to pay the tax on the money they made overseas?
 
[quote name='elprincipe']They paid nothing here but 47% total, which means they paid a lot in other countries. Which is bullshit since they made most of their money here.[/QUOTE]


actually I guess what I'm saying... is did they pay no taxes in the US? There was nothing in the 10-K filing that I could see that said where the taxes were paid.... Their actual tax filings are private and in all honesty probably haven't even been completed for 2009. So I guess what I'm saying is do these people writing the articles know for a fact they didn't pay taxes in the US or are they making assumptions?

I'm definately not defending Exxon... but I like to see actual fact before I believe an article on the internetz. Which is something I've yet to find.
 
[quote name='Knoell']GE made most of their money overseas, and loses a certain amount of money here. Do you think they should have to pay the tax on the money they made overseas?[/QUOTE]

Did you read the article? GE loses money here and makes more overseas due to accounting tricks designed to reduce their tax liability. Our tax system sucks because they apparently get away with that. Meanwhile, Joe Schmoe's small startup that finally is paying off owes 35%. Tell me how that's fair.

[quote name='Afflicted']actually I guess what I'm saying... is did they pay no taxes in the US? There was nothing in the 10-K filing that I could see that said where the taxes were paid.... Their actual tax filings are private and in all honesty probably haven't even been completed for 2009. So I guess what I'm saying is do these people writing the articles know for a fact they didn't pay taxes in the US or are they making assumptions?

I'm definately not defending Exxon... but I like to see actual fact before I believe an article on the internetz. Which is something I've yet to find.[/QUOTE]

Going strictly from the article's assertion, they paid nothing in the U.S. If you have more/better information I'd be interested in it.
 
[quote name='elprincipe']Going strictly from the article's assertion, they paid nothing in the U.S. If you have more/better information I'd be interested in it.[/QUOTE]


I have no better information.... other than that the 2008 10-K filing looks roughly the same as the 2009... just bigger numbers.

Like I said I'm not here to defend Exxon, I just don't think the people writing those articles have the facts to back them up either. If they did they should be able to point to numbers in the filings.

In an update to one of 'em, an Exxon rep said that they overpayed taxes last year, which could be possible since most businesses pay estimated quarterly taxes. I don't think anyone but the IRS can prove either way tho.

I guess I'm just trying to be optimistic that they either paid taxes to the US last year or there's a really good reason (ie way overpaid in 2008 and since 2008 was a record year for them and 2009 was a very down year for them that it's possible and that created a wash).


Disclaimer: I'm also an XOM shareholder.... but then again almost anyone that has a 401K or owns mutual funds is. :D That said I own 0 individual shares. I also don't consider myself really that great at reading company filings so I would love to be corrected if I'm reading them wrong.
 
[quote name='elprincipe']Did you read the article? GE loses money here and makes more overseas due to accounting tricks designed to reduce their tax liability. Our tax system sucks because they apparently get away with that. Meanwhile, Joe Schmoe's small startup that finally is paying off owes 35%. Tell me how that's fair.



Going strictly from the article's assertion, they paid nothing in the U.S. If you have more/better information I'd be interested in it.[/QUOTE]


I did read the article, but why do they have to use those tricks? Is it because they are profit hogging hate mongerers, or is it because paying half their profit to the US government would hurt them. I do agree they should pay the taxes, but I also do not agree that they should have to pay HALF their earnings or profit.
 
[quote name='Knoell']Is it because they are profit hogging hate mongerers, or is it because paying half their profit to the US government would hurt them.[/QUOTE]

You're a smart dude, don't let the facts or anyone else on this board tell you otherwise.
 
Income tax for one is illegal, there is no law that requires you to pay income taxes. Our Constitution strictly prohibits taxing of labor.

I will say it again... there is no law for income tax. It is a scam.

Find me the law and I will give you 1000000000000000 rep.
 
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