Boots & Sabers

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0824, 18 Apr 16

Over 45% of Americans Don’t Pay Any Federal Income Tax

For almost half of American adults, today is either a “whatever” day or a day of celebration as they look forward to their check from the folks who pay income taxes. Raise your hand if you pay income taxes 

An estimated 45.3% of American households — roughly 77.5 million — will pay no federal individual income tax, according to data for the 2015 tax year from the Tax Policy Center, a nonpartisan Washington-based research group. (Note that this does not necessarily mean they won’t owe their states income tax.)

Roughly half pay no federal income tax because they have no taxable income, and the other roughly half get enough tax breaks to erase their tax liability, explains Roberton Williams, a senior fellow at the Tax Policy Center.


0824, 18 April 2016


  1. Pat

    I wonder if that 45.3% includes retired people who make sure that their yearly earnings are just under the taxable limit, although they make a ton of money through cash transitions that they are able to hide from the government. I know of a lot of retired conservatives that get away from paying taxes by doing that.

  2. Pat

    I guess if we look at who that 45% is it may give perspective.
    51% of American workers make less than $30,000 a year.
    40% of American workers make less than $20,000 a year.
    The poverty level for a family of 5 is $28,410.
    80% of high school students work.

    And then you have the shadow economy where it is estimated to be $2 trillion in trade. This includes workers who are officially un or under employed who are receiving an income but are not declaring. How many of these individuals are receiving government help with food stamps and such??

  3. Pat

    And according to the Tax Policy Center;


    Low-income households typically pay some federal tax. The Tax Policy Center estimates that, on average in 2015, households in the lowest income quintile (the bottom fifth) will owe federal taxes equal to 3.6 percent of their incomes, much lower than the average 19.8 percent tax rate for all households.

    But the income tax is not the reason these households owe federal taxes. In fact, TPC estimates that in 2015, households in the lowest income quintile have a negative average income tax rate thanks to refundable credits—namely the earned income tax credit (EITC) and the child tax credit (CTC). That is, the payments they receive from refundable credits exceed any income tax they owe.

    In contrast, the average payroll tax rate for households in the lowest income quintile is 6.4 percent (very similar to the average rate of 6.9 percent for all households). The payroll tax is by far the most significant federal tax for households in the lowest income quintile, in terms of how much they pay.

    Of course, low-income households pay federal excise taxes on their purchase of specific products, including cigarettes, alcohol, and gasoline. Low-income households also indirectly pay some corporate income tax, to the extent that corporations pass tax burdens back to workers’ wages.

  4. Dave

    I imagine those statistics fail to include the 27 major profitable corporations that fail to pay any income taxes. How do we the people bail out General Motors only to have them pay no taxes?!

    You want poor households to pay more taxes? Support policies that raise their pay and expand the middle class. If 51% of American workers make less than $30,000 what do you expect? The very foundational premise of a progressive tax system is that those who make more pay more.

    That has been turned on its head by the very low actual tax rates paid by American corporations today and the poor (big surprise!) are made the straw man to blame. We have high corporate tax rates but the lowest actual tax collected. In 1955 corporations paid 27.3% of all taxes paid. In 2010 it was 8.9%. Individuals paid 9.3% of all taxes in 1955 and 12.2% in 2010. The middle class has to pay more and they are expected to blame the poor who have never paid much in because they have nothing to pay under a progressive tax system.

  5. Northern Pike

    If you’re worried about all those moochers who don’t pay federal income tax, he’s something that make all you Randians sleep better: When it comes to state and local taxes, the poorest 20 percent pay a higher percentage of their income in taxes than the top 1 percent.

    It’s all right here:

    In Wisconsin, we shake pennies from poor people to fund a playpen for the affluent (Miller Park). Feel better now?

  6. Jay

    The itep site is a joke, using the whole progressive/regressive canard as a smokescreen to incrementally raise taxes at the top. It’s embarrassing to admit that formerly communist Russia has bested us on the tax policy front with a 13.5% flat tax and limited deductions vice this ridiculous “progressive” Byzantine tax code of ours. At a flat rate of say 20% and a 10k standard deduction, 100k owes 18k. 30k owes 4K. The guy making 100k has 90% of his income subject to taxation while Mr. 30k has 67%. Doesn’t sound so “regressive ” to me.

  7. Kevin South

    Thanks Pat for putting into perspective the fat lavish benefits our public school teachers are constantly whining about-on average, the benefits are worth more than 51% of what American Workers earn.

  8. Pat


    Your going to have to explain what you just said about me putting something into perspective about teachers.

  9. old baldy


    Are public school teachers not “American Workers” ??

  10. Northern Pike


    Why is the itep site a joke? Is the data incorrect? Are the wealthy actually paying a higher percentage of their income in state and local taxes than the poor?

    You can certainly disagree with itep’s policy goals, but obviously you have nothing to challenge its facts. Tax rates in the Russian thugocracy are not a refutation of the itep data.

  11. Dave

    If individual income tax rates are progressive of course those laking more will pay a higher percentage of their income. The top tax rate rate currently provides that income above $415,050 will be taxed at 39.6%. 60 years ago the top tax rate was 90%. Taxes should be raised at the top….period!

  12. Kevin

    If I must spell it out for you-your post said 51% of American Workers earn less than 30k. The average annual benefit packages of public school teachers are well above the 30k. therefore, the benefit packages alone, exceed the annual income of 51% of American Workers. Clear enough?

  13. Pat

    No Kevin, you’re once again making the embellishments to something that wasn’t said. Nice try though. Don’t make me humiliate you with facts again.

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