A couple of recent stories on taxes and polls really made me laugh.
The first story tells us that about 47 percent will pay no federal income taxes at all for 2009. That is a staggering number for sure. That is just about at the number where the takers (majority) can dictate to the takees (minority) at will and there is nothing that the takees can do about it. That is a very good working definition of tyranny by the way.
The second story is about a Gallup poll which states that “Americans Split on Whether Their Income Taxes Are Too High.” 45 percent of the population thinks that their tax burden is just about right and 48 percent of the population thinks that their taxes are too high.
Wow, about half the population pays no taxes and about half the population thinks that their taxes are just fine. Shocker. People who pay no taxes are happy with the taxes they pay.
Conversely, the other half of the country that carries the entire burden for the non-paying half thinks that their taxes are too high.
What would we do without polling?
So here comes my value add to this little story. 47 percent pay no taxes but only 45 percent think that their tax burden is fair. That means 2 percent of the people who pay NO taxes think that they are overtaxed.
You can’t make this up.
April 14, 2010 at 6:37 pm
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April 14, 2010 at 6:38 pm
Actually, in previous years I was one of those who paid (next to) no taxes, but I thought the tax code was unfair. Not for my own sake, but for the sake of my parents who get taxed over 40% of their income.
I find it hard to comprehend that 50% of the pop is paying no taxes. I'm by no means wealthy and, even though I'm getting a rebate, I still paid quite a bit over the course of the year.
April 14, 2010 at 6:41 pm
Unless of course those who are not taxed think they should be taxed more. (Whether it's 0*x=0 or 0+x=x where x>0, I don't know.)
gbm3
April 14, 2010 at 6:48 pm
I'm in the same boat as Christina (on the second point). I too got a tax refund. Does that mean I paid no taxes? If that's the case, then I am less shocked that nearly 50% paid no taxes.
Besides that, doesn't everybody really pay some taxes when we buy non-food items? So, while nearly 50% aren't (ultimately) paying income taxes, nearly 100% are contributing to the Government's coffers. Meaning the ultimate tax burden isn't relegated solely to the upper 50%.
April 14, 2010 at 6:54 pm
As far as I know, sales tax varies from state to state, but there is no national sales tax. So, no, 100% are not contributing to the Government's coffers, unless by "Government" you mean to include state governments.
April 14, 2010 at 7:03 pm
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April 14, 2010 at 7:04 pm
Unless your refund is actually greater than what was taken out of your pay, you DO pay taxes.
April 14, 2010 at 7:13 pm
The sales tax goes to the states, not federal government. However we are being promised a VAT from the Obama government and that is a federal sales tax.
April 14, 2010 at 7:13 pm
This is why the fair tax really needs to be considered as an alternative to our current tax system. My understanding of the fair tax is that the income tax goes out the window and is replaced with a sort of national flat sales tax which would be levied on all new goods and services. This tax would include food, but if you buy your clothes and furniture at a thrift store, for example, there is no tax paid, like it would be if you bought it at Target or wherever. It hits everyone the same way.
April 14, 2010 at 8:08 pm
We always receive a larger refund from the federal government than we paid in federal income taxes. We still pay more in Medicare and Social Security than we receive back, so we are paying those taxes, but I'm always amazed at our refund. How can they afford all those programs, I wonder? (We do pay state taxes in both Kansas and New York.)
April 14, 2010 at 9:53 pm
I am also getting a tax rebate, but what amazes me, is that as high as our return is (and it's huge), we're not getting it ALL back. I don't mean Medicare and Social Security, I mean Federal Income Tax. I'm glad that I have all the deductions that I do, but they take way to much out each month. Even if I did get it ALL back, I would still say that we pay way too much because they take out way to much, and people in our income bracket that don't donate over %10 to the Church, have interest, etc., don't get that money back. So maybe it's a statement. I don't mind paying income tax, and once we get our return every year, I think it's okay, but over-all, they take way too much out. I'm glad they take it out and that we get a refund each year (instead of paying), but sometimes that money would be really useful then and there.
April 14, 2010 at 10:05 pm
Melissa, you can go to your employer and change your withholding (I-9 form) so that you get more in your paycheck. Just be careful not to owe too much at the end of the year.
April 15, 2010 at 12:25 pm
Of course you are still paying taxes, even if you aren't paying federal income tax.
There are still payroll taxes, state tax, local tax, sales tax, excise tax, capital gains tax, and even "sin" taxes for smokers and drinkers.
It is estimated that, for the overwhelming majority Americans, 30% – 40% of their income is used to pay taxes.
April 15, 2010 at 12:48 pm
Melissa, the form you complete to change your income tax withholding is a W4. It can be a confusing form, but you do have the option of simply estimating what your tax liability is going to be for the coming year, dividing that by the number of payrolls you have, and having a flat amount withheld each pay.
I was shocked to read that almost half of Americans pay no income tax, because my son, who is a broke college student with income last year of around $8000, pays income tax!
April 15, 2010 at 4:04 pm
Any of the 47% that doesn't pay federal income tax but have employment would of course pay social security tax and medicare tax. That is close to 10% of their gross pay. (and if self-employed – the taxpayer pays the employer's share and the employee's share of both those non-income tax taxes). Some of this withheld money for SS and medicare could be "refunded" in a sense, via the Earned Income Tax Credit – which pays money to taxpayers even if they owe no income tax (so that reimburses low income persons for some of the withholding tax they did pay).
April 15, 2010 at 4:20 pm
Because there are so many streams of revenue called fees and taxes it gets very confusing as to who pays what. If you receive more from the govt. through deductions and tax "credits" than you paid in through your Federal income tax withholding then by definition you have paid no Federal income tax. SS and Medicare are federal payroll and productivity taxes along with the hidden state unemployment taxes thay are paid completely by your employer. Yes it looks like SS and Med are deducted from your pay check but lets face it the employer shoulders the entire burden, just become self employed as someone stated above and see. I am always frustrated about the focus of arguments on the Federal income tax since it should be the least of most peoples concerns when it comes to trying to figure out where you are over taxed.
April 15, 2010 at 4:50 pm
I've been on unemployment for nearly a year. I WISH I was paying no taxes. I could use that $40 per week that I pay into taxes.
April 15, 2010 at 5:11 pm
Double taxation. Income tax on unemployment. The govt. views taxing unemployment like taxing capital gains. You didn't really earn it so whay should you care.
April 15, 2010 at 5:24 pm
I should care because it's the only thing I'm living on regularly at this point (freelance writing gigs aren't every day)and I need the money.
April 15, 2010 at 5:47 pm
Kim
You didn't earn it. Stop writing on blogs and plant some seeds.