50% Of Americans Don’t Pay TaxesPosted by Phil Ferguson on August 16th, 2011 – 5 Comments – Posted in Finance
This is a new GOP talking point.
“We’re dismayed at the injustice that nearly half of all Americans don’t even pay any income tax. And you know the liberals out there are saying that we need to pay more.” In this context, “we” refers to Perry and everyone who shares his worldview.
So… Perry does not want the rich people like him to pay one dime more but the poor should pay more.
This is an increasingly popular argument in right-wing circles — Michele Bachmann, one of Perry’s presidential rivals, has pushed the same line — thought it’s entirely counter-intuitive. The argument isn’t even subtle: far-right Republicans are annoyed that most Americans don’t make enough money to be eligible to pay income taxes, so they believe it’s important to get more of these lower- and middle-income Americans paying more to the government.
Recently an upset friend told me that, “50% Of Americans Don’t Pay Taxes”. Even Rick Warren in pissed…
It appears that Rick Warren quickly took down his tweet when someone pointed out that while he makes millions every year, he pays no income tax.
In this video Rush Limbaugh tells us what jesus would do. This is followed up by actual bible quotes. The godbots do not even know their own book. (not a surprise)
If my friend has said almost 50% of households don’t pay income tax – that would be true.
So how many households don’t pay income tax?
In 2009, roughly 47% of households, or 71 million, will not owe any federal income tax, according to estimates by the nonpartisan Tax Policy Center.
The vast majority of households making up to $30,000 fall into the category…
I will use a household income of $24K for the math below
However, they do pay:
Sales tax that can be greater than 10% in large cities, (tax of around $2,400/year – if you make very little, you save very little)
FICA tax at 7.65% of income (plus another 7.65% from the employer), (tax of $1,836 per year – plus what they employer pays)
Gasoline tax of $.47 per gallon, (tax of $470 [20,000 miles per year at 20 miles per gallon X $.47])
Property tax (even if you rent – it is included in cost of rent), (educated guess here… $1,000 per year)
State income tax (avg 6.7% or $1,608)
I’m sure there are other taxes but just these few add up to a grand total of $7,314 ($2,400 + $1,836 + $470 + $1,000 + $1,608) or 30.5% of income. So…no income tax just 30% of their income paid in taxes. Warren Buffet only pays income tax rate of 17%.
Now let’s take it one step further. Let us see what happens if all of these households were forced to pay an additional 5% income tax. That would be 71 million X $24,000 X 5% or additional revenue of around $85 Billion per year. 2010 US budget shortfall was about $2 Trillion ($2,000,000,000,000). Our additional $85 Billion would cover 4.25% of the bill!