Thursday, May 5, 2011

51% US Households Pay no Federal Income Tax

Tipping point?

"As President Barack Obama pushes to raise income taxes on high earners, opponents are seizing on data that indicates these U.S. households already pay a large and growing share of taxes, even compared with high-tax European countries. And a new congressional study concludes that the percentage of U.S. households owing no federal income tax climbed to 51% for 2009.
Upper-income taxpayers have paid a growing share of the federal tax burden over the last 25 years.

A 2008 study by the Organization for Economic Cooperation and Development, for example, found that the highest-earning 10% of the U.S. population paid the largest share among 24 countries examined, even after adjusting for their relatively higher incomes. "Taxation is most progressively distributed in the United States," the OECD study concluded.

Meanwhile, the percentage of U.S. households paying no federal income tax has been climbing, and reached 51% for 2009, according to a new analysis by the Joint Committee on Taxation. That was the first time since at least 1992 that more than half of households owed no federal income tax, according to JCT estimates.; earlier data were unavailable on Monday.


  1. The majority of Americans who do not pay federal income taxes don’t make enough money to qualify for even the lowest tax bracket, a problem made worse by the economic recession. That includes retired Americans, who don’t pay income taxes because they earn very little income, if they earn any at all.

    And while many low-income Americans don’t pay income taxes, they do pay taxes. Because of payroll and sales taxes — a large proportion of which are paid by low- and middle-income Americans — less than a quarter of the nation’s households don’t contribute to federal tax receipts — and the majority of the non-contributors are students, the elderly, or the unemployed.

    Meanwhile, tax rates for upper-income Americans continue to drop. As ThinkProgress’ Zaid Jilani has reported, the 400 richest Americans — who have more wealth than half of America combined — are paying less than they were a generation ago. As a result, the United States now boasts one of the largest income gaps in the industrialized world, as our level of income inequality is now comparable to that in Uganda and Pakistan.

    Hatch is also wrong in his assumption that raising tax rates on the rich would hurt job creation. As Wonk Room’s Pat Garofalo notes, fewer than two percent of American businesses fall into the top two income brackets, the only two brackets that would be affected should taxes on the rich increase. Only three percent of Americans who claim business income would be affected by the increase.

    Orrin Hatch attacked low-income Americans on Twitter earlier this week, saying, “51% of US households did not pay any federal income tax in 2009. It’s easy to want more gov’t benefits when you aren’t paying.” Though Hatch and his colleagues pretend that their hardline stance on budget cuts to vital programs is about “shared sacrifice,” they have made it clear that if they get their way, the only Americans sharing in the sacrifice will be those who can afford it least.

  2. The Mormon Church demands that everyone pay their fair share to belong to that club. 10%.
    From what I can see by their palaces, it must be working.

    I feel confident that everyone could afford a flat 10% tax on wages. Just imagine the amount of trees that would be saved alone. Yea, you would have a bunch of law makers and CPA's that would have to get a real job. But we likely wouldn't have as many potholes and our schools would be funded better.


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