Freeloader nation: Does half of America pay no taxes?
Headlines claim that 47 percent of American households pay no income tax at all—leaving the wealthiest half of American pick up the tab. Is this true?
With the arrival of tax day on Thursday, the annual eruption of anti-tax anger is in full swing. One figure in particular is really riling up those who believe the government taxes Americans too heavily—this year, 47 percent of U.S. households won't pay a dime in federal income tax. Is the Obama administration, as some conservatives complain, helping people skirt their responsibilities and making the wealthy foot more than their share—or is the right exaggerating? (Watch Rep. Sam Johnson (R-Texas) complain about tax-free Americans.)
Make the freeloaders pay: This is "nothing short of an outrage," say the editors of iStockAnalyst.com. A growing number of low- and middle-income Americans get to "skate," thanks to a "raft" of new exemptions, deductions, and tax credits, while the top 10 percent of households—the economy's "heavy lifters"—get soaked for 73 percent of federal income taxes. That's "about as inequitable a system as you could possibly devise."
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The 47 percent aren't freeloaders: The 47 percent number is meaningless, says David Leonhardt in The New York Times. Yes, those people pay no federal income tax, but they pay payroll taxes, and local and state taxes. The only reason the wealthy are paying more taxes than in the past is that their incomes have risen faster than everyone else's—hardly a good reason to complain.
"Yes, 47 percent of households owe no taxes. Look closer"
There are more leeches under Obama: "Nonpaying status used to be a sure sign of poverty or near-poverty," says Scott A. Hodge in CNN.com, but Congress and the president have changed the tax laws so that now "the government seems free" to households of four making as much as $51,000. It's easier for politicians to sell these new nonpayers on more spending, now that someone else will pay the bill.
"Why more Americans pay no income tax"
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Everyone pays roughly the same rate: Forget "the right-wing rhetoric," says Ben Adler in Newsweek. The rich have it better here than anywhere else in the industrialized world. It's true that the income tax is progressive, but thanks to regressive sales and payroll taxes, the rich, poor, and middle class "pay roughly the same share of total taxes as they take home in income."
"Why America's tax code is the least progressive in the industrialized world"
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