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Your Take: Why Half of Americans Pay No Income Tax

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After talking about how half of Americans don’t pay any income tax, CNN took a quick look at the reasons why. They don’t go into greater detail but basically they pointed to all the various tax benefits available. The Tax Policy Center said that for 2011, 46% of households ended up owing nothing in federal taxes, up from 40% before the recession. When you think about it, the standard deduction is $5,950 for individuals and $11,900 for married filing jointly. Additionally, you get a $3,700 exemption for each person in your household. A family of four would get $14,800 in exemptions plus a $11,900 deduction for $26,700 in income exempt from tax. The poverty threshold for a family of four is $22,350.

That said, the reality is that $23,700 is not a lot for a family of four to survive on. That’s less than $2,000 a month for four people. While I understand the need for fairness, I don’t think our society benefits from taxing folks who may be barely scraping buy. That said, our world isn’t fair but I’d like it to be stable, so as someone who makes more than $26,700, I’m happy paying taxes. I’m happy paying more than the average amount in taxes even if I believe the government is using it inefficiently.

What do you think about all this?

{ 109 comments, please add your thoughts now! }

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109 Responses to “Your Take: Why Half of Americans Pay No Income Tax”

  1. Carl Lassegue says:

    You hit it right on the head! I’m more than comfortable paying more taxes than those who make barely enough to survive.

  2. Donald says:

    Everyone earning a wage pays Social Security and Medicare taxes. As we all know SS taxes have been funding the general functions of the Federal government for a long time, and there is no refund of this tax. Instead of taxing the poor more, we should apply the SS tax on all income instead of stopping at $110,000. Odd that the proponents of flat taxes often don’t mention this.

    • pghfan says:

      does that man i will get more when i retire- a lot more ???? no – so stop trying to pay for everyone else on the backs of a few

  3. Scott Hedrick says:

    If the government was *literally* flushing your money down the toilet, would you still feel happy paying “more than the average amount” of taxes? If not, why not? Perhaps if there were less money for the government to spend, it would spend the remainder less wastefully. Based on your statement, you could simulate paying more taxes by burning cash. You would be no worse off than you would by sending it to the government to be wasted. That should make you feel much better.

    • NateUVM says:

      Reagonomics (supply side economics), as mentioned earlier, was debunked in the eighties. Decreasing revenues have not ever lead to decreased spending. Just more debt.

      Then there is the whole austerity success rate lately… Greece, Spain, Italy, Portugal…. France…

      Those that fail to learn from history are doomed to repeat it.

      • Oh, to be back to the deficit levels of the 1980s. That would seem like Nirvana compared to where we are currently at.

        • NateUVM says:

          You mean, after the economically chaotic early eighties, after Reagan lost his supply-side idealism and started spending? Sure. Or, how about the balanced budget era of the mid-late 90’s?

          Also, cherry-pick whatever era of economic expansion you want (spurred by spending), but neither have any relevance to the situation today.

  4. pghfan says:

    You need to make everyone have skin in the game. it costs money to have this country go round and everyone needs to share in the costs. if they share in the costs, maybe they will be a little me aware of what goes on. now they just want more and more for free becacuse they do not foot any of the bill. The earned income tax crdit needs totally eliminated- it is just wealth redistribution. lower income people use much of the dollars spent on general services already- ie…free healthcare, ambulance service (they use as a free taxi service to get to dr. appts.) police fire, publc transportation etc…. so they are getting a much better return on the money they pay for fees anc such. no one ever said work hard and get taxed more

  5. 60schild says:

    Hmm.. looks like my 85 year-old mother is not paying her fair share. Even though she receives about $1100 monthly from pension and SS, she should be required to file a return and pay some Fed taxes, right? After rent, utilities, food and hygiene care she has no extra but at least she is able to sustain herself. Thank God (and the government) for her Tri-care medical benefits. How many millions of seniors are in her position and make up some of that demographic that doesn’t pay Fed taxes anymore?
    I and my siblings work and pay taxes and our children will contimue to do so after we no longer will. And to the comment on taxing SS, the maximum amount of SS benefits that are taxable is 85%, on a sliding scale depending on other income. Many people pay no Fed tax on SS income, and some people pay tax on up to 85% of their SS income.
    As for a flat tax, I don’t see it happening. Will Congress ever go against all the special interest groups and get rid of deductions for such things as capital improvements, Section 179 expenses, mortgage interest, charitable contributions, business expenses, investment expenses, etc.? Can’t see it. I’m not saying that some of it shouldn’t happen, just that it doesn’t seem like it will.
    Finally, as for the exemptions, child tax credits, child care credits, earned income credits, and education expense credits, these are written into the tax code to help the “lower income” people and most of these credits disappear as income rises. So it is up to our congressmen to change any rules we may not agree with. And who remembers that the top marginal rate in 1959 was 91% on the top level of $200,000 and over, and the top rate on capital gains was 25%? So would going back to a top rate or 39% would be so bad?
    Personally, I get more upset over the average top pay of corporate officers being more than 200 times the average pay of the lower tier workers, when it used to be (1950s) about 40 to 50 times their pay. It must be difficult to live on 7 or 8 million dollars a year ($144,000+ a WEEK), much less only 4 or 5 hundred thousand a year. And you want to convince me that they would be hard hit by paying an extra 4%? Someone pass me the tissues! I’ll trade my $58K salary after 30+ years in education for ONE MONTH of their income, invest it low-cost index funds and live better than I ever have or probably ever will!
    So if we’re tired of Medicare fraud, Medicaid fraud, tax evasion, etc. then let’s increase funding for investigators and do more about it. Spend the money where it will reap benefits and be cost-effective.

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