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For those who have followed the controversy over the 'secret video' of Romney talking about the 47 % who don't pay federal income tax, here is an excellent report full of background information.
I wanted to know how this number has changed over the years, and figure 2 gives a graphic, while table 3 gives the exact numbers. Here is are a few of the numbers from table 3 for those who don't want to click:
Percentage of non-payers for selected years
------------------------------------------
1916.....17.0%
1934......56.1%
1980......21.3%
1988......20.6%
1999......25.6%
2008......36.4%
2010.......40.9%
2012.......47% (not listed in the report, but we all know what the number is now)
If you look at the table, the number was volatile until around 1950, was pretty stable at about 16-25 percent from 1950 to 1990, and since about 1990 has gone nowhere but up. It's a pretty big shift, which I don't think has gotten nearly the attention/debate it deserves. It just kind of happened.
For those who have followed the controversy over the 'secret video' of Romney talking about the 47 % who don't pay federal income tax, here is an excellent report full of background information.
I wanted to know how this number has changed over the years, and figure 2 gives a graphic, while table 3 gives the exact numbers. Here is are a few of the numbers from table 3 for those who don't want to click:
Percentage of non-payers for selected years
------------------------------------------
1916.....17.0%
1934......56.1%
1980......21.3%
1988......20.6%
1999......25.6%
2008......36.4%
2010.......40.9%
2012.......47% (not listed in the report, but we all know what the number is now)
If you look at the table, the number was volatile until around 1950, was pretty stable at about 16-25 percent from 1950 to 1990, and since about 1990 has gone nowhere but up. It's a pretty big shift, which I don't think has gotten nearly the attention/debate it deserves. It just kind of happened.
Here's primarily how it "just happened": Congresses between 1916 and and 2012 voted to put in a cornucopia of tax breaks into the tax code for damn near everything other than a hang nail. I look through that thing every year and am continually amazed at the kinds of breaks written in there, and I wonder what legislator got that in there for some special group of prized constituents. This has been going on in both Democrat and Republican administrations / Congresses.
If we want to stop this trend, then the answer is not to vilify those who are using the tax breaks, but to reform the tax code and do away with most of this crap and just cut everyone's tax rate. It would probably cut about a third of the paperwork from that ridiculous thing in the process.
Here's primarily how it "just happened": Congresses between 1916 and and 2012 voted to put in a cornucopia of tax breaks into the tax code for damn near everything other than a hang nail. I look through that thing every year and am continually amazed at the kinds of breaks written in there, and I wonder what legislator got that in there for some special group of prized constituents. This has been going on in both Democrat and Republican administrations / Congresses.
If we want to stop this trend, then the answer is not to vilify those who are using the tax breaks, but to reform the tax code and do away with most of this crap and just cut everyone's tax rate. It would probably cut about a third of the paperwork from that ridiculous thing in the process.
Good comments but again note that most of it happened after 1990. From 1951 to 1975 the pct of non payers was remarkably stable with only a handful of years where it deviated from about the 19-23% range. There was a slight uptick to around 24-25% in the late 1970's, no doubt mostly due to high unemployment rates. From 1990 to 2012 the number increased all but 4 or 5 years, and more than doubled in those 22 years.
I don't think anyone blames those who take advantage of the breaks, except insofar as they lobby for them and/or support the politcians who enact them.
Considering your comments, I'm curious whether you consider yourself an Obama supporter. He's done nothing but seek to complicate taxes, as far as I can see. (tax breaks for hiring, tax breaks as 'economic stimulus,' tax ramifications of ObamaCare, etc.)
Another thing about this that I wanted to mention is how inherently unstable our current structure is. The top 10% now pay over 70% of the burden, while the bottom 47% pay nothing. And as Happy Texan notes that number could well go up next year, considering what has happened with the labor force participation rate.
What happens if that top 10% starts to shrug, maybe move some of their dealings off-shore? A broader-based system would obviously be more inherently stable and sound.
Secondly look at the perverse incentives we create. The bottom 47% have no incentive to vote for spending restraint; or worry about the deficit; neither is a cost to them. Nor do they have as much incentive as they otherwise would to try to better themselves and move out of the bottom 47%.
Not only that, but few seem to notice that with the top 10% paying 70% of the freight, suddenly the DC bureaucracy has a vested interest in making sure that those top 10% are taken care of. This is just in theory, I don't see where it has actually happened. But the top 10% is definitely now the golden goose for the DC bureaucracy.
And with so many non-taxpayers, no wonder that there is so much support for Obama and his rising national debt. The non-taxpayers just figure they won't have to pay anything, the debt doesn't affect them.
Why would the non-taxpayers give a damn about runaway government spending? They aren't going to pay a dime for the bloated government so they don't care.
Interesting numbers there. The percentages need to be returned to the 2001 levels and no one should recieve more back than they paid in. That is not a tax refund, it is income redistribution. Of interest was this:
Quote:
Although many low-income nonpayers do pay other federal taxes such as payroll and excise taxes, the value of refundable credits is getting so large as to offset these other tax costs. For example, the Joint Committee on taxation estimated that in 2009, the value of refundable credits exceeded the employee share of payroll taxes for 23 million tax filers and exceeded the employer's share of payroll taxes for 15.5 million filers.
What this means is that these Americans are not just being absolved from contributing to the basic cost of government, but they are also avoiding contributing to the cost of their own retirement as well.
And with so many non-taxpayers, no wonder that there is so much support for Obama and his rising national debt. The non-taxpayers just figure they won't have to pay anything, the debt doesn't affect them.
Why would the non-taxpayers give a damn about runaway government spending? They aren't going to pay a dime for the bloated government so they don't care.
Too bad that Republican policies have led both to people not paying federal income taxes and to the ever growing debt. Reagan's 1986 tax reform exempted many from paying income taxes, as did Bush's tax reforms of 2001 and 2003. Just look at the numbers spike after Republican policies were passed.
Of course they spiked again when Obama took office, but that is because he inherited an economic disaster. Obama has not passed any policies to exempt people from the federal income tax.
The debt is caused by three main things: (i) The Bush tax cuts, (ii), unfunded wars, and (iii) substantial loss in tax revenue caused by the recession.
Quote:
Just two policies dating from the Bush Administration — tax cuts and the wars in Iraq and Afghanistan — accounted for over $500 billion of the deficit in 2009 and will account for $7 trillion in deficits in 2009 through 2019, including the associated debt-service costs. [7] By 2019, we estimate that these two policies will account for almost half — nearly $10 trillion — of the $20 trillion in debt that will be owed under current policies.[8]
EVERYONE needs to contribute to this bloated government. EVERYONE needs to pay their fair share. It's ridiculous that so many are enjoying a free ride.
...The debt is caused by three main things: (i) The Bush tax cuts, (ii), unfunded wars, and (iii) substantial loss in tax revenue caused by the recession...
However, keep beating that drum. I hear that if you repeat a lie, long enough, it becomes true.
The total bill for the Iraq war accounted for only about 3 percent of spending while it lasted. So that's like focusing all blame your cell phone bill for the fact that you've got $100,000 in credit card debt. Almost everyone, both D's & R's agreed on going to Afghanistan. So you can hardly put the entire onus on Bush for that.
As for the Bush tax cuts, total federal revenue was roughly flat during the Bush years ($2.215 trillion in 2001, $2.288 trillion in 2008, inflation adjusted). So that was not the problem either. Revenue did go down sharply in 2009 ($1.899 trillion) due to recession, so you're right about that part. You're wrong about almost everything else though.
The culprit you seem unaware of was the general increased spending under Bush--bridge to nowhere, Medicare Part D, fed. ed. spending nearly doubled, etc. Bush increased spending at a faster rate than any prez since LBJ.
Keep repeating the lie about Iraq & the Bush tax cuts though. Maybe they will somehow become true, too.
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