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Because they are childless. Something which is incredibly expensive....A lot more of their income is going to support others, as such the argument is that their taxes should be lower as tacing thie rbase income the same would be the equivalent of taxing the basic income needed to survive. something many have issues with.
Let me rephrase the question:
A family of 4 earning $50K is more likely to own their home than to rent.
A non-elderly childless adult earning $12.5K is extremely unlikely to own a home. (An elderly childless adult earning $12.5K is actually fairly likely to own a home, having bought (and paid off!) said home decades earlier during their (higher income) working years.)
So the average family of 4 earning $50K is well on the way to building wealth - and can look forward to years of stable housing costs - while the childless burger (flipper) has no hope of buying a home - and is always at risk of displacement and perhaps homelessness - and is unlikely to build wealth.
So why again should the burger flipper with no wealth pay tax while the wealth-building family of 4 pays no tax?
So why again should the burger flipper with no wealth pay tax while the wealth-building family of 4 pays no tax?
The childless person making $12,500 a year will, after the standard deduction and personal exemption (currently $10,150 if I recall correctly) will pay about $200 a year in income tax.
The family of four making $50,000 will file as married and have four exemptions (a deduction of roughly $26,000... the "married filing jointly" standard deduction plus four exemptions at $3,950 a piece). Leaving about $24,000 as taxable income. This would equate to a tax rate of approximately $2,700 a year.
Even if you get the child tax credit or the earned income credit (which I don't think you get at $50,000 gross), the family would still pay significantly more.
The childless person making $12,500 a year will, after the sthey andard deduction and personal exemption (currently $10,150 if I recall correctly) will pay about $200 a year in income tax.
The family of four making $50,000 will file as married and have four exemptions (a deduction of roughly $26,000... the "married filing jointly" standard deduction plus four exemptions at $3,950 a piece). Leaving about $24,000 as taxable income. This would equate to a tax rate of approximately $2,700 a year.
Even if you get the child tax credit or the earned income credit (which I don't think you get at $50,000 gross), the family would still pay significantly more.
At $50K and two kids they would be just over the EITC phaseout, but they would qualify for two child tax credits as long as both kids are under 17 on the previous Dec 31.
I'm also assuming they own a home and have a mortgage. If both kids are under 17, they probably still have a hefty mortgage balance, which means they're probably paying a lot of mortgage interest, which means they might be able to reduce their taxes further by itemizing deductions.
So it's not out of the realm of possibility that they would currently pay no or little federal income tax. Obviously, as the mortgage balance gets paid down, the benefit of itemizing will gradually fall until it reaches zero.
It was someone else who used the example of a family of four earning $50K.
Why don't you go to a website that has a tax calculator and post actual numbers before you waste time with these pointless posts.
A family of 4 making 50K pays no income tax
Is this where the breakdown in communication is taking place? People using "online tax calculators?"
Online tax calculators can adjust for numbers of dependents (usually kids) and other tax credits, but they are totally useless for educating people about our graduated income tax.
ASIDE FROM "TAX CREDITS," which mostly benefit parents and home owners, we all pay the same as was stated in the above examples.
I say this out of care for EVERY taxpayer's financial status, not just my own, if you just take 1-2 hours to educate yourself on our tax system and why no one "pays more" including "the rich" you will be in a better position to advocate for your own interests.
Why not follow your own advice and show your work. And if such a family did in fact pay no federal income tax, it would because they did not OWE any federal income tax. I doubt that you are in the habit of paying taxes that you don't owe either.
Keep in mind also that Pease adjustments or no, personal exemptions and the standard or itemized deductions are avilable to all taxpayers at every income level.. You take advantage of these yourself. Every year. Without fail. Is it okay for you to use these "loopholes" but not okay for those who make less than you do? LOLOLOL! What a clownish notion.
Are you going to whine next about "skin in the game"? Well, consider first that while federal income taxes are progressive, the bottom quintile still loses about 16% of their meager incomes to taxation because other federal taxes and nearly all state and local taxes are not progressive at all.
Is this where the breakdown in communication is taking place?
Taxes are like the weather. People like to talk about them, but typically don't actually know much at all about how they work or why they are the way they are.
Why not follow your own advice and show your work. And if such a family did in fact pay no federal income tax, it would because they did not OWE any federal income tax. I doubt that you are in the habit of paying taxes that you don't owe either.
Keep in mind also that Pease adjustments or no, personal exemptions and the standard or itemized deductions are avilable to all taxpayers at every income level.. You take advantage of these yourself. Every year. Without fail. Is it okay for you to use these "loopholes" but not okay for those who make less than you do? LOLOLOL! What a clownish notion.
Are you going to whine next about "skin in the game"? Well, consider first that while federal income taxes are progressive, the bottom quintile still loses about 16% of their meager incomes to taxation because other federal taxes and nearly all state and local taxes are not progressive at all.
All itemized deductions or personal exemptions are not available to everybody, many have phaseouts on top of the AMT which lower income households do not have to worry about.
Also there are plenty of states with no income tax at all, also plenty that follow the federal deduction and exemption guidelines, not to mention there are plenty that offer tax credits to low income households like a renters credit in California, so low income households are not paying into the state tax system as much in most states.
You are also ignoring the fact that the truly low income households with say a family of 4 with $30,000 a year income are getting benefits from the government every month, and also end up with a net gain on taxes through EITC and additional child tax credits.
At $50K and two kids they would be just over the EITC phaseout, but they would qualify for two child tax credits as long as both kids are under 17 on the previous Dec 31.
I'm also assuming they own a home and have a mortgage. If both kids are under 17, they probably still have a hefty mortgage balance, which means they're probably paying a lot of mortgage interest, which means they might be able to reduce their taxes further by itemizing deductions.
So it's not out of the realm of possibility that they would currently pay no or little federal income tax. Obviously, as the mortgage balance gets paid down, the benefit of itemizing will gradually fall until it reaches zero.
It was someone else who used the example of a family of four earning $50K.
There are plenty of areas where $50,000 a year does not buy a house, meaning many people are taking the standard deduction at $50,000 a year.
Although there are plenty of people making $50,000 a year who pay no income tax.
A family of 4 earning $50K is more likely to own their home than to rent.
A non-elderly childless adult earning $12.5K is extremely unlikely to own a home. (An elderly childless adult earning $12.5K is actually fairly likely to own a home, having bought (and paid off!) said home decades earlier during their (higher income) working years.)
So the average family of 4 earning $50K is well on the way to building wealth - and can look forward to years of stable housing costs - while the childless burger (flipper) has no hope of buying a home - and is always at risk of displacement and perhaps homelessness - and is unlikely to build wealth.
So why again should the burger flipper with no wealth pay tax while the wealth-building family of 4 pays no tax?
You are assuming that owning comes out ahead of renting.
All itemized deductions or personal exemptions are not available to everybody, many have phaseouts on top of the AMT which lower income households do not have to worry about.
Also there are plenty of states with no income tax at all, also plenty that follow the federal deduction and exemption guidelines, not to mention there are plenty that offer tax credits to low income households like a renters credit in California, so low income households are not paying into the state tax system as much in most states.
You are also ignoring the fact that the truly low income households with say a family of 4 with $30,000 a year income are getting benefits from the government every month, and also end up with a net gain on taxes through EITC and additional child tax credits.
Many high income earners get government benefits as well in the form of subsidys, targeted tax credits, etc... Corporate Welfare is real.
So if everyone has access to the benefits, where is the unfairness in the tax code?
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