The poor pay no taxes? Big surprise to them!

[lakhota]

A couple of months ago, Media Matters took note of yet another typical bit from the liars at Foxaganda:

On the April 9 edition of Fox News' Fox & Friends, after co-host Gretchen Carlson stated that "yesterday we were reporting a story that 47 percent of all Americans don't pay any taxes," Fox Business host Stuart Varney stated: "Yes, 47 percent of households pay not a single dime in taxes. And some of those households actually make a profit from the Treasury." Co-host Steve Doocy asked, "Is that fair."

The message was clear: They're freeloaders. Just a new version of "welfare queen."

Chuck Marr and Brian Highsmith at the Center on Budget and Policy Priorities demonstrate just how utterly bogus that claim is:

The notion that “half of Americans don’t pay taxes” not only overstates the share of households that do not pay federal income taxes in a typical year. It also ignores the other taxes people pay, including federal payroll taxes and state and local taxes.

The reality is that the income tax is one of a number of types of taxes that individuals pay, both over the course of their lifetimes and in a given year, and it makes little sense to treat it as though it were the only one that matters. Some 86 percent of working households pay more in payroll taxes than in federal income taxes. In fact, low- and moderate-income people pay a much larger share of their incomes in federal payroll taxes than high-income people do: taxpayers in the bottom 20 percent of the income scale paid an average of 8.8 percent of their incomes in payroll taxes in 2007, compared to just 1.6 percent for taxpayers in the top 1 percent of the income distribution. ...

Low-income families also pay substantial state and local taxes. Most state and local taxes are regressive, meaning that low-income families pay a larger share of their incomes in these taxes than wealthier households do. The bottom fifth of taxpayers paid 12.3 percent of their incomes in state and local taxes in 2010, according to the Institute on Taxation and Economic Policy (ITEP) model. That was well above the 7.9 percent average rate that the top 1 percent of households paid.

Chopping taxes for the wealthy has been a going concern in America for half a century. In the latest installment, a majority of Representatives in the House of Representatives agreed this spring with Rep. Paul Ryan that the top tax rate for the top tier of American billionaires should be the same as it was 85 years ago, 25 percent. Because, you see, the tax burden is just too great on "job creators" and makes America uncompetitive with the rest of the world. In fact, the average tax rate in the countries of the Organization for Economic Cooperation and Development in the latest year for which data are available, 2008, was 44.8 percent. In the United States, it was 26.1 percent.

But, hey, please do not inject facts into the discussion.

The claim that top income Americans are being crushed by their tax burden is bad enough. It's made worse by the divide-and-conquer-at-the-polls claim that half the country is made up of low-income freeloaders getting a hand-out from the hard-working other half.

But worst of all is that, at a time of spending cuts in programs for Americans with the toughest economic row to hoe, these demonizing claims are being deployed as persuasion for making the tax code ever less progressive. In the name of fairness. In the name of prosperity. In the name of those who prefer not to be named, and who, thanks to Citizens United, don't have to be.

CHARTS: www.dailykos.com/story/2011/05/31/980891/-The-poor-pay-no-taxes-Thats-a-big-surprise-to-them?via=blog_1

[lakhota]

The Case for Higher Taxes

Alan Greenspan, the former chairman of the Federal Reserve, opined on “Meet the Press” last month that to cope with the growing federal deficit the United States should go back to the federal income tax rates of the Clinton years. Such a step would raise tax rates for all American taxpayers.

I was reminded of that remark earlier this week at this year’s Princeton Conference on Health Policy, organized by the Council on Health Care Economics and Policy, housed at Brandeis University’s Heller School for Social Policy and Management.

In a session on “Future Health Care Spending: Political Preferences and Fiscal Realities,” Henry J. Aaron of the Brookings Institution presented this fascinating chart:



Dr. Aaron was quick to add that he took the chart directly from an analysis by the Center on Budget and Policy Priorities. The chart illustrates how prominent a role the tax cuts of 2001 and 2003 have played in the buildup of deficits and public debt in the United States.

An additional factor, of course, has been the economic downturn (dark blue), along with two wars. Evidently, the stimulus package (the bulk of the “recovery measures”) played a role as well, although probably not nearly as prominent a role as seems to have been widely assumed.

More plus Charts: economix.blogs.nytimes.com/2011/05/27/the-case-for-higher-taxes/

[Savoir Faire-Demogague in NJ]

The lower income and poor pay no federal taxes. They pay, if employed, social security and medicare tax, but those two taxes are targeted towards one social security pension and health care in retirement, not the general fund.

[Savoir Faire-Demogague in NJ]

Alan Greenspan, the former chairman of the Federal Reserve, opined on “Meet the Press” last month that to cope with the growing federal deficit the United States should go back to the federal income tax rates of the Clinton years. Such a step would raise tax rates for all American taxpayers.


I am in favor of this, as long as we also go back to the Clinton year social spending levels.
The federal govt does not have revenue problems.

[Politically_Incorrect12]

Chopping taxes for the wealthy has been a going concern in America for half a century. In the latest installment, a majority of Representatives in the House of Representatives agreed this spring with Rep. Paul Ryan that the top tax rate for the top tier of American billionaires should be the same as it was 85 years ago, 25 percent. Because, you see, the tax burden is just too great on "job creators" and makes America uncompetitive with the rest of the world. In fact, the average tax rate in the countries of the Organization for Economic Cooperation and Development in the latest year for which data are available, 2008, was 44.8 percent. In the United States, it was 26.1 percent.

Why would anybody try to use the argument that people should be happy we don't pay the same percentage in taxes as other countries? 25% at the highest bracket seems fair to me.

[ugonow]

The lower income and poor pay no federal taxes. They pay, if employed, social security and medicare tax, but those two taxes are targeted towards one social security pension and health care in retirement, not the general fund.

--They pay federal excise taxes,gas taxes, and there are probably a host of other stealth taxes. And from what I hear, SS taxes are used for the general fund. Having said that,I agree our tax code needs tweaking.

[cme1201]

Jun 1, 2011 8:41:51 GMT -5 ugonow said:

The lower income and poor pay no federal taxes. They pay, if employed, social security and medicare tax, but those two taxes are targeted towards one social security pension and health care in retirement, not the general fund.

--They pay federal excise taxes,gas taxes, and there are probably a host of other stealth taxes. And from what I hear, SS taxes are used for the general fund. Having said that,I agree our tax code needs tweaking.

Let's see, They get EITC for several thousand dollars per child, They get Child Tax Credits $1000 per child, They Get Daycare reimbursement which could be up to several thousands per child, which is in reality more than many pay in each and every year. They may pay a portion of taxes (that every American pays) yet they take more out of the "credits" then they could ever reasonably cover.

[ugonow]

There are many states in the union that take a lot more from the federal pot than put in.Ever see the list? Does that mean they pay no taxes?

[cme1201]

Jun 1, 2011 9:07:39 GMT -5 ugonow said:

There are many states in the union that take a lot more from the federal pot than put in.Ever see the list? Does that mean they pay no taxes?

If I pay a small amount out of my left hand and remove a large amount with my right, am I still paying?

[commentator]

Jun 1, 2011 5:44:06 GMT -5 Savoir Faire-Demogague in NJ said:

The lower income and poor pay no federal taxes. They pay, if employed, social security and medicare tax, but those two taxes are targeted towards one social security pension and health care in retirement, not the general fund.

SF, the Social Security taxes and Medicare taxes paid in 2010 (for example) were used to pay Social Security and Medicare benefits disbursed in 2010.

[ugonow]

I pay a small amount out of my left hand and remove a large amount with my right, am I still paying?

www.taxfoundation.org/research/show/266.html So these states that recieve more than they put in do not pay taxes and are welfare cases?

[commentator]

Jun 1, 2011 9:01:19 GMT -5 cme1201 said:

Jun 1, 2011 8:41:51 GMT -5 ugonow said:

--They pay federal excise taxes,gas taxes, and there are probably a host of other stealth taxes. And from what I hear, SS taxes are used for the general fund. Having said that,I agree our tax code needs tweaking.

Let's see, They get EITC for several thousand dollars per child, They get Child Tax Credits $1000 per child, They Get Daycare reimbursement which could be up to several thousands per child, which is in reality more than many pay in each and every year. They may pay a portion of taxes (that every American pays) yet they take more out of the "credits" then they could ever reasonably cover.

EITC is available only for the working poor. It is an incentive to get off welfare and go back to work. The maximum earned income tax credit is a few thousand dollars so the assertion that it is a several thousand dollars for each child is blatantly false.

I am aware of no "Daycare reimbursement" in the Internal Revenue Code. There is a child and dependent care credit but it is far below the amount paid for child care by a taxpayer. That credit, by the way, is available to all households in which the parents either work or are full time students.

Child care reimbursement plans available with some employers result in a dollar for dollar reduction in the employee's gross pay and taxable income. Again the tax savings is only a fraction of the day care costs.

Edited to add:
In 2010, the maximum EITC for a taxpayer:
with one child - $3,050
with two children - $5,036
with three or more children - $5,666

[ladylove]

Clearly taken out of context! The reporting was strictly in regards to federal income taxes. It would be absurd to think that anyone can escape ALL taxes! This is just a poor attempt by Media Matters to discredit Fox News and the right and to justify tax increases and continue to fuel out of control federal spending.

[commentator]

Jun 1, 2011 9:16:35 GMT -5 @ladylove said:

Clearly taken out of context! The reporting was strictly in regards to federal income taxes. It would be absurd to think that anyone can escape ALL taxes! This is just a poor attempt by Media Matters to discredit Fox News and the right and to justify tax increases and continue to fuel out of control federal spending.

Yes, it is absurd but that is what Fox News wanted its viewers to believe.

[ugonow]

And this study finds many large coporations pay no taxes....thehill.com/blogs/on-the-money/domestic-taxes/164103-report-corporations-pay-low-effective-tax-rates Me thinks the truth lies somewhere the two.

[cme1201]

That article was funny ugonow. so much blame placed at republicans yet when you look at the years 08'-10' those three years were democrat controlled congress.

General Electric came in with the lowest tax rate of the dozen, -61.3 percent over those three years, after The New York Times earlier reported that it had paid no 2010 taxes and claimed a $3.2 billion tax benefit for that year. Jeffrey Immelt, GE’s chief executive, is the chairman of President Obama’s Council on Jobs and Competitiveness.

But seven other companies — American Electric Power, Dupont, Verizon, Boeing, Wells Fargo, FedEx and Honeywell — had tax rates between -0.7 percent and -9.2 percent, according to CTJ.

Aside from Immelt, the chief executives of Dupont and Boeing are also on Obama’s jobs council, while Dave Cote of Honeywell sat on the fiscal commission and voted for its recommendations. The president also announced Tuesday that he was nominating John Bryson, who sits on Boeing’s board, for Commerce secretary.

McIntyre said the companies reported higher rates because they included state and local taxes, taxes they deferred paying and taxes paid to foreign governments, while CTJ looked solely at a companies’ U.S. profits and what they forked over to the federal government.

So when we look at some individual who doesn't pay Federal Income Taxes yet gets enormous breaks and a check from the government we are supposed to look at all the taxes that said individual pays (soc, Fica, state, prop, tags, etc etal) yet when we look at a business we are only looking at what federal taxes they pay and nothing else. Which is interesting.

[Savoir Faire-Demogague in NJ]

And this study finds many large coporations pay no taxes....http://thehill.com/blogs/on-the-money/do....ctive-tax-rates Me thinks the truth lies somewhere the two.

I dont even have to look at the link to know this is bogus and misleading. The financial meltdown has unfortunately produced large tax losses that these large companies write off as an expense or credit. Nothing outrageous here, completely within the law and tax code. Individuals can do the same. I claimed thousands of losses since 2008.
There is no "somewhere between".

[ladylove]

Jun 1, 2011 9:22:48 GMT -5 @commentator said:

Jun 1, 2011 9:16:35 GMT -5 @ladylove said:

Clearly taken out of context! The reporting was strictly in regards to federal income taxes. It would be absurd to think that anyone can escape ALL taxes! This is just a poor attempt by Media Matters to discredit Fox News and the right and to justify tax increases and continue to fuel out of control federal spending.

Yes, it is absurd but that is what Fox News wanted its viewers to believe.

No it wasn't! That's what Media Matters wants you to believe that is what Fox News meant. I saw the broadcast on Fox I knew exactly what they were talking about!

[fairlycrazy23]

The fairtax would eliminate this confusion.

[mwcpa]

"The fairtax would eliminate this confusion. "

....and add another new level of confusion....

[❤ mollymouser ❤]

We pay taxes.
We pay all sorts of taxes.
In fact, everyone we know pays all sorts of taxes.
But some people don't have to pay federal income taxes, and that's what seems to irk many people who do.

[shelby]

Confusion is on every side of the issue but let's not get all angry at "people who do not pay taxes at all" and get credits for all they paid in including 100%+ for childcare......because these are all false statements said to anger the people who believe it. Why so angry at the working class I have yet to figure it out maybe some people do want backdoor slavery.

[floridayankee]

Jun 1, 2011 9:57:26 GMT -5 cme1201 said:

So when we look at some individual who doesn't pay Federal Income Taxes yet gets enormous breaks and a check from the government we are supposed to look at all the taxes that said individual pays (soc, Fica, state, prop, tags, etc etal) yet when we look at a business we are only looking at what federal taxes they pay and nothing else. Which is interesting.

Not interesting...misleading. Most people will properly say"the poor don't pay FIT"...those that forget the federal and the income part, I give them the benefit of the doubt and assume they mean FIT. Why? Simple logic.....anybody that pays retail for anything pays taxes so the assumption that somebody can pay absolutely no taxes....none, nowhere, nohow...is absurd at best.

Similar to those whining that many corporations don't pay taxes. First, same as above, I assume they mean income taxes, a good portion of corps are S-Corps that, by definition, don't pay taxes. All taxes are paid on the personal income level by the owner and/or employees, so of course the corp doesn't pay taxes.

Like I said, not interesting, just misleading...typical class warfare by stirring the emotions of the ignorant and uneducated.

Now...for my unsolicited opinion....I'm quite thankful that I'm not one of the poor that "don't pay taxes". Doesn't mean that I don't engage in tax planning to reduce my overall liability though.

[hannah27]

I think it's time for a flat-rate tax. Everybody pays the same percentage - no deductions. I think that's fair.

[commentator]

Jun 1, 2011 12:36:01 GMT -5 shelby said:

Confusion is on every side of the issue but let's not get all angry at "people who do not pay taxes at all" and get credits for all they paid in including 100%+ for childcare......because these are all false statements said to anger the people who believe it. Why so angry at the working class I have yet to figure it out maybe some people do want backdoor slavery.

If you or anyone else knows anyone who gets a tax credit for "100%" of their childcare costs I would like to meet that person.

Alternatively, tell me where in the Internal Revenue Code such a credit exists.

[cme1201]

Ten Things to Know About the Child and Dependent Care Credit
The care must have been provided for one or more qualifying persons. A qualifying person is your dependent child age 12 or younger when the care was provided. Additionally, your spouse and certain other individuals who are physically or mentally incapable of self-care may also be qualifying persons. You must identify each qualifying person on your tax return.


The care must have been provided so you – and your spouse if you are married filing jointly – could work or look for work.


You – and your spouse if you file jointly – must have earned income from wages, salaries, tips, other taxable employee compensation or net earnings from self-employment. One spouse may be considered as having earned income if they were a full-time student or were physically or mentally unable to care for themselves.


The payments for care cannot be paid to your spouse, to the parent of your qualifying person, to someone you can claim as your dependent on your return, or to your child who will not be age 19 or older by the end of the year even if he or she is not your dependent. You must identify the care provider(s) on your tax return.


Your filing status must be single, married filing jointly, head of household or qualifying widow(er) with a dependent child.


The qualifying person must have lived with you for more than half of 2010. There are exceptions for the birth or death of a qualifying person, or a child of divorced or separated parents. See Publication 503, Child and Dependent Care Expenses.


The credit can be up to 35 percent of your qualifying expenses, depending upon your adjusted gross income.


For 2010, you may use up to $3,000 of expenses paid in a year for one qualifying individual or $6,000 for two or more qualifying individuals to figure the credit.


The qualifying expenses must be reduced by the amount of any dependent care benefits provided by your employer that you deduct or exclude from your income.


If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer and may have to withhold and pay social security and Medicare tax and pay federal unemployment tax. See Publication 926, Household Employer's Tax Guide.
www.irs.gov/newsroom/article/0,,id=106189,00.html

May not be 100% of expenses but, we are paying to keep little bobby bullskate so that mommy or daddy bullskate can work and place little johnnie in datcare that we the tax payer subsidizes.

[hello fromWarsaw]

USA, only modern country with full time workers living in poverty with no health care, or for that matter good vacations, paid parental leave. OF COURSE the poor pay everything BUT federal INCOME taxes. More inconvenient truth for the corporate fools...
Also worst rich poor gap, upward mobility, homeless and prison populations. Whenever Mega rich pubs mislead enough to get rich's taxes under 40%, we have a great DEPRESSION...BRILLIANT. Learn some history fcs. Most ignorant, myopic, counterproductive party in the modern world. Runs on hate, racism, gossip, fundamentalism and myth...

[jkapp]

>>The notion that “half of Americans don’t pay taxes” not only overstates the share of households that do not pay federal income taxes in a typical year. It also ignores the other taxes people pay, including federal payroll taxes and state and local taxes.

The reality is that the income tax is one of a number of types of taxes that individuals pay, both over the course of their lifetimes and in a given year, and it makes little sense to treat it as though it were the only one that matters. Some 86 percent of working households pay more in payroll taxes than in federal income taxes. In fact, low- and moderate-income people pay a much larger share of their incomes in federal payroll taxes than high-income people do: taxpayers in the bottom 20 percent of the income scale paid an average of 8.8 percent of their incomes in payroll taxes in 2007, compared to just 1.6 percent for taxpayers in the top 1 percent of the income distribution. ...<<

Which also means the claims from the left that certain businesses paid no taxes are also bogus, correct? Since they pay far more in payroll, state, property, etc taxes than any group of individuals...

Of, but they are just businesses creating jobs, so f*^& 'em, right lefties?

[jkapp]

Jun 1, 2011 4:18:48 GMT -5 @toughtimes said:

The reason that people receive EITC or whatever else is to keep them from starving in the streets. .

yeah, I remember a co-worker who got her EITC tax refund and went on a nice vacation at a resort/casino with it...yeah, just dying in the streets without it.

[shelby]

Jun 2, 2011 9:02:06 GMT -5 @commentator said:

Jun 1, 2011 12:36:01 GMT -5 shelby said:

Confusion is on every side of the issue but let's not get all angry at "people who do not pay taxes at all" and get credits for all they paid in including 100%+ for childcare......because these are all false statements said to anger the people who believe it. Why so angry at the working class I have yet to figure it out maybe some people do want backdoor slavery.

If you or anyone else knows anyone who gets a tax credit for "100%" of their childcare costs I would like to meet that person.

Alternatively, tell me where in the Internal Revenue Code such a credit exists.

I didn't say that someone else did I was refering to it being a blatantly false statement