Post by jeffolie on Aug 31, 2013 6:25:41 GMT -6
43% of Americans pay zero federal income tax
August 30, 2013
The portion of Americans who don’t have to pay federal income tax dropped to 43% this year, a new analysis shows.
That is down from the notorious 47% figure from 2010, which was made famous by Mitt Romney during last year’s presidential election, says Roberton Williams, an economist for the nonpartisan Tax Policy Center, which released the estimates Thursday. “More Americans are paying taxes,” he says.
The ratio of Americans expected to pay no federal income tax dropped—and should continue to fall— because more Americans are working and making more money, pushing them out of the group of workers who don’t make enough money to be required to file a tax return, says Williams. (Families below the federal poverty level don’t have to pay income tax.) Other people’s tax liabilities grew after certain tax breaks, meant to stimulate the economy, expired. By 2024, only a third of Americans will pay no income tax, Williams estimates.
But even most of those included within the 43% pay some taxes, says Williams. Roughly two-thirds of those households include workers who pay payroll taxes. Only 14% of those families pay neither income taxes nor payroll taxes. And of that share, about 10% are elderly, 3% earnings less than $20,000, and 1% are not elderly or poor, likely taking advantage of tax breaks offered through deductions, exclusions and other tax exemptions.
Most people are probably paying other taxes that are hard to avoid, such as state and local taxes like sale and property taxes. And don’t forget that anyone buying gas, tobacco, alcohol and airfare has to pay federal excise taxes, says Williams: “It’s hard to imagine a situation where someone doesn’t pay any tax at all.”
And it isn’t just the poor getting big breaks on their income taxes: 1,000 of the households that pay no income tax rake in more than $1 million a year. And 5,000 make between $500,000 and $1 million; 67,000 make between $200,000 and $500,000 a year. That’s a smaller portion of the 43%, but wealthy Americans, in general, tend to benefit from large tax savings, says Williams. “People at the top end get much, much larger tax benefits in dollar terms than people at the bottom,” says Williams. “It’s just not enough to zero out their income.”
blogs.marketwatch.com/taxwatch/2013/08/30/43-of-americans-pay-zero-federal-income-tax/?mod=MW_home_latest_news
August 30, 2013
The portion of Americans who don’t have to pay federal income tax dropped to 43% this year, a new analysis shows.
That is down from the notorious 47% figure from 2010, which was made famous by Mitt Romney during last year’s presidential election, says Roberton Williams, an economist for the nonpartisan Tax Policy Center, which released the estimates Thursday. “More Americans are paying taxes,” he says.
The ratio of Americans expected to pay no federal income tax dropped—and should continue to fall— because more Americans are working and making more money, pushing them out of the group of workers who don’t make enough money to be required to file a tax return, says Williams. (Families below the federal poverty level don’t have to pay income tax.) Other people’s tax liabilities grew after certain tax breaks, meant to stimulate the economy, expired. By 2024, only a third of Americans will pay no income tax, Williams estimates.
But even most of those included within the 43% pay some taxes, says Williams. Roughly two-thirds of those households include workers who pay payroll taxes. Only 14% of those families pay neither income taxes nor payroll taxes. And of that share, about 10% are elderly, 3% earnings less than $20,000, and 1% are not elderly or poor, likely taking advantage of tax breaks offered through deductions, exclusions and other tax exemptions.
Most people are probably paying other taxes that are hard to avoid, such as state and local taxes like sale and property taxes. And don’t forget that anyone buying gas, tobacco, alcohol and airfare has to pay federal excise taxes, says Williams: “It’s hard to imagine a situation where someone doesn’t pay any tax at all.”
And it isn’t just the poor getting big breaks on their income taxes: 1,000 of the households that pay no income tax rake in more than $1 million a year. And 5,000 make between $500,000 and $1 million; 67,000 make between $200,000 and $500,000 a year. That’s a smaller portion of the 43%, but wealthy Americans, in general, tend to benefit from large tax savings, says Williams. “People at the top end get much, much larger tax benefits in dollar terms than people at the bottom,” says Williams. “It’s just not enough to zero out their income.”
blogs.marketwatch.com/taxwatch/2013/08/30/43-of-americans-pay-zero-federal-income-tax/?mod=MW_home_latest_news