Republicans (eg: Sen. John Cornyn R Texas) like to declare that 51% of Americans pay no taxes. This is figured in “units” so whether it’s households or individuals ..who knows?
How did we get to this point?
Largely through tax breaks, which are sometimes called "tax expenditures."
These tax breaks are estimated to total more than a trillion dollars a year in reduced taxes, but the fact is that the bulk of those go to the top end of the income distribution."
High earners have so much income liability, that even these lop-sided breaks don’t lower their taxes to zero while lower and middle-income breaks such as child credits, mortgage interest deductions and Earned Income Credits can get lower wage earners off the hook.
The Urban-Brookings Tax Policy Center projects that for 2011, 46.4 percent of households won’t have any income tax liability. However, 28.3 percent of this number will pay payroll taxes. Payroll taxes consist of Social Security Insurance and Medicare.
Of the remaining 18.1 percent with neither income nor payroll tax liability, 10.3 percent are elderly and 6.9 percent are not elderly but have incomes lower than $20,000.
In other words, all but a tiny sliver of Americans without either income tax or payroll tax liability are either elderly or poor.
If you feel that payroll taxes are insignificant it is helpful to remember that minimum wage workers earn $288.00 per week for a 40-hr week. Their tax withheld per week is $25-$30 a week. Relatively speaking, that’s a pretty healthy chunk. The elderly still in the workforce, generally at minimum wage, continue to pay into Social Security, which they may well already be qualified to draw. They continue to pay into Medicare which they also may be qualified to use.
I suppose one can fault these old people and the poor for not taking better care of their selves financially but I just can’t do that with a straight face.
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