2016 Postmortem

applegrove

(118,696 posts) Tue Sep 18, 2012, 12:48 AM Sep 2012

"Misconceptions and Realities About Who Pays Taxes"

Misconceptions and Realities About Who Pays Taxes

By Chuck Marr and Chye-Ching Huang at the Centre of Budget and Policy Priorities

http://www.cbpp.org/cms/index.cfm?fa=view&id=3505

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Close to half of U.S. households currently do not owe federal income tax. The Urban Institute-Brookings Tax Policy Center estimates that 46 percent of households will owe no federal income tax for 2011. [1] A widely cited figure is a Joint Committee on Taxation estimate that 51 percent of households paid no federal income tax in 2009.[2] (The TPC figure for 2009 also is 51 percent.) [3]

These figures are sometimes cited as evidence that low- and moderate-income families do not pay sufficient taxes. Yet these figures, their significance, and their policy implications are widely misunderstood.

■The 51 percent and 46 percent figures are anomalies that reflect the unique circumstances of the past few years, when the economic downturn greatly swelled the number of Americans with low incomes. The figures for 2009 are particularly anomalous; in that year, temporary tax cuts that the 2009 Recovery Act created — including the “Making Work Pay” tax credit and an exclusion from tax of the first $2,400 in unemployment benefits — were in effect and removed millions of Americans from the federal income tax rolls. Both of these temporary tax measures have since expired.

In 2007, before the economy turned down, 40 percent of households did not owe federal income tax. This figure more closely reflects the percentage that do not owe income tax in normal economic times.[4]

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"Misconceptions and Realities About Who Pays Taxes" (Original Post) applegrove Sep 2012 OP

Since when abumbyanyothername Sep 2012 #1

abumbyanyothername

(2,711 posts)

1. Since when

Reply to applegrove (Original post)

Tue Sep 18, 2012, 01:15 AM

Sep 2012

Does "Taxes" = "Federal Income Taxes."

I can pretty much guarantee that virtually everyone pays at least one of the following federal taxes: OASDI (Social Security) and HI (Medicare) taxes; one of the various federal excise taxes (most notably gasoline but also tires, telephone services, air travel, alcohol, tobacco products and firearms); estate taxes.

Note that virtually all of the excise taxes are brutally regressive and that OASDI and HI are highly regressive (they cap out at very low levels of earning).

Given that a large portion of the deficit is being funded by borrowing Social Security Trust Fund funds, one could argue that the working classes and even the working poor are funding more than their fair share of government operations.

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