Is it true that about 50% of Americans do not pay any federal income tax?

Question

I've heard this several times, but only from conservative people. Is it true? And if it is true, then why do liberals say that the Bush taxcuts only helped the rich?

Answer 1

No, that's not exactly true; what is true is that about 50% of Federal tax returns filed show no tax owed at all on the income shown on the return. That is, for these approximately 50% of returns, no matter how much or how little the income, no tax at all is owed. If any tax has already been withheld or paid for that tax year, then the taxpayer is entitled to a full refund.

The fact is that most federal income tax payments are made by people that are reasonably well-off and that most of that amount is paid disproportionately by the very well-off. That's why when taxes are cut they see the most benefits - they're paying the most, by far.

There are many sites on the web to see the exact data; I just did a quick peek and came up with the following for tax year 2004, updated as of July, 2006:

As of tax year 2004, the data for income and federal income taxes are as follows (data for 2005-6 are likely to be substantially the same):

Group....% Income....% Taxes Pd
Top 1%------19-------------37
Top 5%------33-------------57
Top 10%----44-------------68
Top 25%----66-------------85
Top 50%----87-------------97
Bot 50%----13---------------3

Answer 2

Below source, most states run around 30ish percent..filers with no liability. Think about who this has to include: kids who work a part-time job, retired people. The basis of any economy are the working age people who will never be 100% if you have a normal demographic distribution. Of course these are also the people making money usually (but of course there are exceptions). Your 50% might include those who are not required to file..they don't have a job..they are probably a dependent of someone, every society will have dependents for some reason or another.

As for the rich paying most of the taxes? Well even the government knows you can't get blood from a stone.

Answer 3

Yes it is true. Look at the income figures for American households. Approximately 38% claim to make so little that they qualify for a refund of more than they claim to have paid. Many of these households have income from the third economy or under the table as it is known. The rest of the 40 some percentage make enough and have enough deductions that they pay only a pittance which totals to less than 1/2 of a percent of all taxes paid. That leaves the middle class and upper middle class to pay 85% of all taxes paid. The rest is paid by the rich.

Answer 4

Depends on what that 50% is-- 50% of the population? 50% of the working force? what?

I seriously doubt its that high. Its probably more like 20% (e.g. the bottom quintile) that pays next to no taxes.

The bush tax cuts helped everybody-- while it didn't help everybody exactly equally, it did help everybody. Think about it- the 10% bracket was added, the top tax rate was also cut. And given how income is taxed, even the top 20% only pay 10% on their first 10k (or so, I don't remember exactly) of their income.

With 40-50% of people in the stock market, cap gains tax cuts helped them too. Don't let people fool youinto thinking that the cap. gains rates only affect the rich-- they don't. Plenty of middle class folks are in the market.

Answer 5

nicely if she makes 25k a twelve months. under modern-day tax brackets the 1st 8500 is taxed at 10% something at 15%. yet observing it.... Assuming she documents as a unmarried individual the general deduction is 5800 funds, the interior maximum excemption is 3700 funds. If we assumed she has no different decutions thats potential the taxable earnings from the 25000 funds is now 15500. Out of the 15500 she could owe 1900 funds. regardless of the undeniable fact that if she has a variety of of infants, she cdould then qualiy for earned earnings tax credit. One toddler, 3094 funds. So if that have been the case she could get 1194 extra funds than she replaced into even taxed. in case you have better than one toddler you get much extra. and you will even get slightly without young infants. so which you are going to locate that it wouldnt be puzzling to think of how alot of persons finally end up not paying something.

Answer 6

Because, truth be told, the rich pay the bill. The top 1% wealthiest people in this country pay one quarter of the U.S. tax bill. The top 20% pay two thirds of the bill. ANY tax breaks help the rich...since it's their money the government's taking.

Answer 7

Between the jobless, the people that work for cash under the table, welfare, kids and elderly, that percentage might be right.

How can you claim that a tax cut helps those who don't pay taxes in the first place?

Furthermore, his tax cut only affected the 2 very top income brackets. If you are in one of the two top income brackets, you are extremely wealthy.

So yes, Bush tax cuts are only helping the rich and myself being a nuclear engineer, his tax cut did help me.

Answer 8

I believe that there are so many different people that are calling the USA home now who don't pay taxes at all! This is my concern!

Answer 9

I don't know, but I could guess that number is possible, but not for the reason Conservatives would want to imply--like the rest are on welfare, etc. There are all children and many students, the elderly, and those who are homemakers, the disabled, etc. There are also those who are unemployed. It's a pretty large group, I'd bet...

Answer 10

This statistic has nothing to do with tax cuts. I don't know anything about this statistic. Bush's tax cuts lowered the top two tax brackets to 33%. The top two tax brackets are in my opinion, the rich.