Nearly half of US households escape fed income tax

WASHINGTON (AP) – Tax Day is a dreaded deadline for millions, but for nearly half of U.S. households it’s simply somebody else’s problem.

About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That’s according to projections by the Tax Policy Center, a Washington research organization.

Most people still are required to file returns by the April 15 deadline. The penalty for skipping it is limited to the amount of taxes owed, but it’s still almost always better to file: That’s the only way to get a refund of all the income taxes withheld by employers.

I wasn’t one of them. But the McCourt’s who own the LA Dodgers fall into this category and so does Exxon (not a household, but a “person” according to SCOTUS)…

Its a shocking percentage, but is consistent with what we have heard for the past 40 years. The richest and the poorest don’t pay taxes. Its the middle class which pays for government.

Perhaps the VAT tax isn’t a bad idea after all?

multiple threads:

Yep, although its probably worth noting that this thread was posted first, and that the Politics 2010 thread is the duplicate.

Oh, I never looked at the timing. I will post this thread over there! Sometimes the mods combine them. I just don’t want to repost everything I posted over there!

The wonderful George Carlin once put it something like this: “This is how I describe the economic structure in this country. The rich make all of the money, pay none of the taxes. The middle class does all of the work, pays all of the taxes. The poor…are there just to scare the [expletive] out of the middle class. Keep them showin’ up at them jobs…”

And he is wondefully wrong. The top 10% of oncome earmers pay 71% of all income taxes. The top 1% pay 40% of all taxes

The VAT is a horrible idea. It would not be instead of the personal income tax, it would be in addition to the income tax. We were in the 53% that did pay and I am fed up with dumping our hard earned cash in the Federal Piggy Bank with litte or no results.

This mention of the VAT tax was a bit of a tongue-and-cheek response to the large numbers of people not paying. Of course there are people who make so little that they should indeed be exempt.

Having said that, as distasteful as the concept of a VAT tax is to me and a zillion other people, we are reaching the point where the national debt will overtake us. Something must be done. Sometimes an extremely painful medical procedure must be performed in order to save the patient. If there is a VAT tax, get mad at all those politicians, Republican and Democrat that wantonly spent more than the government took in.

The most virulent pathogen in economic America is the average citizen. We expect and demand what we “know” is owed to us from the treasury. This is musical chairs writ large. The music will stop soon and millions will have no place to sit.

A VAT tax in all its repulsive regalia may be on the way…and we did to ourselves in the voting booth for the last 30 years.

We have a different tax structure for investment income that lets the rich get away with a lot. They also form corporations which pay their bills, then pay themselves a small salary (the McCourts who own the Dodgers are like this). I worked in business management for years and this is really common. Middle class folks with just regular income and expenses can’t use these loopholes. When you talk about a percentage of wealth, the rich pay a very small amount.

I just finished my 798th tax return for this year and can assure you that what you say above is utter nonsense. Although an "s"corp. as you desrcibe above can save you a small amount of fica and medicare it does not save you a penny in federal income tax If you know of some loopholes for the rich i would like to know them as I have some clients who could desperately use them.

And those appointed by Obama to cabinet positions don’t pay any. :smiley:

I’m glad you posted this because I was getting ready too. :thumbsup:

Thank you, estesbob. It always irritates me when people throw around unsubstantiated comments like “the rich don’t pay any taxes”. I recall some story about John and Theresa Kerry paying some shockingly low tax on their income, but to think that everyone in the $500,000+ income level do the equivalent is BS. The vast majority pay huge taxes, and then receive the scorn of the masses, who are incidently greatly assisted by their contribution to the government.

EVERYONE should pay at least SOME income tax. That way they have “skin” in the game, and will vote with a bit more wisdom and responsibility than we have seen. If you are “excused” from being part of the solution to the county’s financial woes, you don’t care if you are a big part of the problem.


The problem is not that the rich dont pay enough-the problem is that 50% dont pay anything.

But how does that 50% break down by income and wealth?

Honestly, I don’t know. Is it possible that a significant percentage is not poor? Are rich people avoiding taxes, as is often alleged in popular culture?

Rubbish. The richest pay taxes. The idea that they don’t is a myth.

Yes. The Kerrys have a lot of their funds in municipal bonds which avoids taxes, but I’m sure they still pay plenty of taxes.

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