And So I Go: Yesterday, Today and Tomorrow

>>Less than one half of the US population pays income taxes and less than two thirds of the tax paying population is supporting the rest of us. Is something wrong with this picture?

Posted on: March 13, 2010

To the degree a population is dependent upon government is the same degree of  the population’s slavery to government.  The Taxpayers Foundation has found that  36% of the 142 million people who filed income tax returns last year had not tax liability.  They paid no taxes whatsoever, and thru tax credits many of them actually got money  (someone else’s money!) from the government.  The old adage “don’t bite the hands that feeds you.” applies here and when it comes to “free” money people are likely to cry loud and long if this money is threatened.  It’s greed and greed is in large measure what got us to the straights our country is now in.

This is a troubling report that you should read.  And while reading this keep in mind there are 350 million people in the United States.  Only 142 million file income tax returns and only approximately 90 million actually paid some taxes while 52 million who have jobs and filed income tax returns did not pay taxes.   That puts the burden of providing for 350 million people on the backs of  90 million.  AND, if Obama has his way there will be even more people taken off the tax paying column and put on the tax receiving column.  Can you not see the hordes (corrected for Fran!) descending on the government with their hands out now!?  What these hoards do not realize and perhaps do not care is that at some point (a point I believe we have already reached) there just is no money left  and then the system collapses and we are all slaves.  BB

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Taxpayers Hits Record Level

Posted March 11th, 2010 at 6:45pm in Entitlements with 7 commentsPrint This Post Print This Post

Nonpayer Chart

The Tax Foundation recently released its annual report on the number of tax returns filed that have no tax liability, and the study shows a record number of “nonpayers” in 2008. Taxpayers become “non-payers” when credits and deductions wipe out any income tax they owe.

According to the Tax Foundation report, of the more than 142 million returns filed in 2008, almost 52 million have no tax liability. That means more than 36 percent of tax filers paid no income taxes in 2008 – a new record high. This was a steep increase over 2007 when fewer than 33 percent of filers paid no taxes. As the table below shows, the growth of non-payers is a long-term trend that has been accelerating in recent years. For instance, 21 percent of taxpayers were non-payers in 1990.

The amount of income that a family can earn and still be non-payers is also alarming. In 2010, a family of four can earn up to $51,000 and still pay no income taxes.

Not only do a record number of taxpayer’s pay no taxes, but many of them actually receive cash payments through the tax code because of refundable credits like the Earned Income Tax Credit (EITC) and the Child Tax Credit. According to the Tax Foundation, cash payments from these two credits alone totaled over $70 billion.

President Obama’s policies will add to the numbers of non-payers and the amount of income redistributed because he wants to expand and add even more refundable credits.

Like the Tax Foundation’s report, the Heritage Foundation’s Index of Dependence on Government shows a growing dependence on government and a substantial increase in recent years. According to the report, the average recipient of government aid received over $26,000 in assistance in 2008 – a record high.

The growing dependency on government and shrinking number of taxpayers is troubling and will lead to an even faster rise in unsustainable government spending unless the trend is reversed. Congress should start by ceasing the expansion of refundable tax credits. It should then reform entitlement programs like Social Security and Medicare before baby-boomers start collecting benefits from them and dependency on government explodes even further. If Congress starts soon perhaps it won’t be too late to stop the impending fiscal implosion.

10 Responses to ">>Less than one half of the US population pays income taxes and less than two thirds of the tax paying population is supporting the rest of us. Is something wrong with this picture?"

I wonder what the actual taxes to income ratio would be if all taxes were included in the study.

Like the taxes on telephone bills, property taxes, sales taxes, cable taxes, gasoline taxes etc….

These studies always look at federal income taxes, but leave out the part about all the different taxes everyone pays, like Social Security etc…

True, but income tax is the largest tax therefore usually looked at. Besides the government doesn’t want you to realize how much you are paying in all these little bites our of your pocket! Years ago I once tried to figure it out for our income and taxes and stopped when it came to taxes taking 54% of our income because I simply didn’t want to know as it was so depressing.

It is still a fact that 1% of the population is paying 70% of the income taxes. I get so mad when I hear anyone, Obama or anyone else say “Tax the rich!”. We are and have been taxing the rich. I am far, far from rich. In fact, much closer to the poverty line but I know a nations needs the wealthy to invest their money to create jobs and if we tax them too high they will simply move. Example: Oprah has a lovely home in California but she only lives in that home 5+ months of the year, a few days short of 6 months so she will not have to pay the high California property taxes on her home. If the rates were more reasonable she would probably pay them, as would many wealthy who do the same thing.

When the rich get taxed too heavily they simply move. You and I do not have that option. BB

Please get your facts straight and learn how to write correctly before posting such nonsense. “Hordes” are groups of people, “hoard” is a verb indicating the stockpiling of wealth.

Fran I thank you for calling this mistake to my attention. I sometimes let my mind out-run my fingers and that is when mistakes are made, then being a dyslectic I often “see” what I expect to be there rather than what is. I have given your credit for catching the mistake.

Now as for my facts: Fran my facts are correct as I have checked and double checked them. The author of this article than I reference in it’s entire text has all of his facts straight and that is why I have brought this article to my readers. These facts are part of the reason our nation is failing and we are on the brink of becoming a third world country. Far more intelligent people than me have made this statement. You need to spend some time reading government reports, newspapers from around the world and other blogs AS I DO DAILY before you call me out as posting “nonsense”.

Thank you for stopping by this time. I suspect since I post “nonsense” you won’t be coming back. Only a fool wastes time reading “nonsense”; I certainly never do. BB

I am interested to know how two thirds of the country are considered non-tax payers. By this definition, it would mean that these are people who do not even file a tax return. It does not include those who file, but do not owe any taxes. I would like to know how to become one of those. With the direction of the country and the way the country spends tax payer money on little to help the American people or to reduce the debt, being a non-tax payer would be a good place to be. Just need to learn how. I would guess that since I have been paying taxes since I was sixteen years old, it would not be an easy transition. Any suggestions I am willing to listen.

The taxes everyone pays regardless of income are for Social Security and Medicare. Income taxes are entirely different and are based on your income. 47% of the workers of America pay NO INCOME TAX. That is fact. How do you get on that list of people—well it is very likely you are already there if you make less than $100,000. a year. A good gage is if you get money back when you pay your taxes which means you are not liable for any taxes and you are getting back money taken out of your pay check for income taxes. Now the very genrerous government is giving these people who make under $49,000. a year and earned income tax credit. That means they don’t pay out any of their own money in income taxes and for this they are also getting a few bucks from those who do! If you want more information right from the horses mouth so to speak you can go to the internal Revenue site and get all the facts and figures. The 1% that Obama is naming as greedy are supporting the rest of us not only with the jobs their investments provide but in the taxes they pay. By all means tax the “rich” even more than they are now paying. But remember that the “rich” unlike you and I can afford to just pick up their marbles and move to a country that is more friendly and grateful for the investments of their money which provides jobs for the rest of us. AND REMEMBER ALSO THAT TO OBAMA ANYONE FAMILY THAT MAKES $250,000 A YEAR IS CONSIDERED “RICH”. That is just plain stupid! In sopme large cities that income level may be a fireman married to a teacher, or the couple who own a small grocery store on the corner or your boss if you work for a small company employing 10 or fewer employees. Do you think these people are rich?
Now I quite agree that the government on any level–city, state or federal– is the worse place to put your money if you want it to be spent wisely. So this November make sure you vote for the people who promise to lower your taxes and cut government spending. Hint”: That is NOT Obama!

Oh, and one more thing: in case you decide not to bother to vote at all because you are disgusted with them all tyhen your staying home and not voting is a vote for Obama and the end of America as we know it. Hard times are here to stay! BB

This is very misleading and quite frankly, you are lying to everyone. First, lets start with a quote from your article, “That puts the burden of providing for 350 million people on the backs of 90 million.” Really, i guess you might have a point if the entire USA budget consisted of only revenue from income tax. However it doesn’t. As a matter of fact, only 42 percent of the our tax revenue comes from income tax. That is less than half our budget revenue. So to say 90 million people are supporting everyone else is at best an exaggeration and at worst a bold faced lie. Payroll taxes account for 40 % of revenue. Anybody that has a job on the books pays that, from kids at Burger King to factory workers, etc. The only people not paying payroll taxes are people who “work off the books”. Employers who pay off the books make out as well. But that is fraud is it not?
9 % of tax revenue comes from corporate taxes. 3% comes from excise taxes and 6% is other. My sources for these numbers is the Tax Policy Center. One quick question for you, Do millionaires and billionaires who invest their money in offshore accounts pay US Federal income tax on that money? Thank you
Wil

Sorry .Wil, I am not lying. I too use the source you mention as well as several others. The Payroll taxes are to be used for Social Security and Medicare as in
Trust Fund. Of course the funds from those Trust Funds are taken by the Treasury and used by the government to pay for all the over spending they do in Washington and We the People are given what is really worthless Treasury Notes (IOU’s for our Government!). These Treasury Notes are promises to repay the Trust Funds out of general revenue which is the taxes the now 52% of income tax paying workers pay. So yes, 48% of Americans pay no income taxes and therefore do indeed live off of the ones who do pay these income taxes because EVERY CENT they pay into the Payroll Taxes they will get back within about 2 years after starting to collect Social Security. If you don’t believe that one then call the Social Security office and request a print out of all the taxes you have paid since you started working and then do the math.

Now let us all sing the song together about paying our FAIR SHARE why don’t we!?

And to avoid being called a liar again I will admit that for many years of my life as an American worker I too belonged to that 47% and paid no income taxes because I took advantage of all the loop holes I could possibly use to reduce my tax bill. All I paid during those years was the Payroll Taxes like all workers for Medicare and Social Security..

Stranger fact: now that I have joined the CLASS OF CITIZENS LIVING ON THE WORKERS BY COLLECTING SOCIAL SECURITY AND MEDICARE I am also paying INCOME TAXES. Yep. The government is taxing the bit of interest and dividend income I am getting on the money I managed to save during my working years. In fact they even tax my Social Security income! BB

You forgot to answer this one? “Do millionaires and billionaires who invest their money in offshore accounts pay US Federal income tax on that money?”

YES! When the money comes back into the United States it is taxed. This is the reason many are calling for a moratorium on these “entry taxes” for US businesses that have invested overseas so they will bring the money back into the US where it is desperately needed in our poor economy. Many companies have profits from overseas operations but hesitate to send the money home because of the steep taxes our government charges them which is on top of the taxes they have already paid on that money in the country where it was made. This is of course a very stupid tax because the United States can only benefit from money made elsewhere and brought back and invested in the United States to create jobs here. Of course much of what our government does in the way of taxes is counter-productive! BB

Maybe this article from Cato Institute will explain things better:
What Obama and the New York Times Don’t Understand about Worldwide Taxation

Posted by Daniel J. Mitchell

Mitt Romney is being criticized for supporting “territorial taxation,” which is the common-sense notion that each nation gets to control the taxation of economic activity inside its borders.

While promoting his own class-warfare agenda, President Obama recently condemned Romney’s approach. His views, unsurprisingly, were echoed in a New York Times editorial.

President Obama raised … his proposals for tax credits for manufacturers in the United States to encourage the creation of new jobs. He said this was greatly preferable to Mitt Romney’s support for a so-called territorial tax system, in which the overseas profits of American corporations would escape United States taxation altogether. It’s not surprising that large multinational corporations strongly support a territorial tax system, which, they say, would make them more competitive with foreign rivals. What they don’t say, and what Mr. Obama stressed, is that eliminating federal taxes on foreign profits would create a powerful incentive for companies to shift even more jobs and investment overseas—the opposite of what the economy needs.

Since even left-leaning economists generally agree that tax credits for manufacturers are ineffective gimmicks proposed for political purposes, let’s set that topic aside and focus on the issue of territorial taxation.

Or, to be more specific, let’s compare the proposed system of territorial taxation to the current U.S. system of “worldwide taxation.”

Worldwide taxation means that a company is taxed not only on its domestic earnings, but also on its foreign earnings. Yet the “foreign-source income” of U.S. companies is “domestic-source income” in the nations where those earnings are generated, so that income already is subject to tax by those other governments.

In other words, worldwide taxation results in a version of double taxation.

The U.S. system seeks to mitigate this bad effect by allowing American-based companies a “credit” for some of the taxes they pay to foreign governments, but that system is very incomplete.

And even if it worked perfectly, America’s high corporate tax rate still puts U.S. companies in a very disadvantageous position. If an American firm, Dutch firm, and Irish firm are competing for business in Ireland, the latter two only pay the 12.5 percent Irish corporate tax on any profits they earn. The U.S. company also pays that tax, but then also pays an additional 22.5 percent to the IRS (the 35 percent U.S. tax rate minus a credit for the 12.5 percent Irish tax).

In an attempt to deal with this self-imposed disadvantage, the U.S. tax system also has something called “deferral,” which allows American companies to delay the extra tax (though the Obama administration has proposed to eliminate that provision).

Romney proposes to put American companies on a level playing field by going in the other direction. Instead of immediate worldwide taxation, as Obama wants, Romney wants to implement territorial taxation.

But what about the accusation from the New York Times that territorial taxation “would create a powerful incentive for companies to shift even more jobs and investment overseas”?

Well, they’re somewhat right … and yet they’re totally wrong. Here’s what I’ve said about that issue:

If a company can save money by building widgets in Ireland and selling them to the US market, then we shouldn’t be surprised that some of them will consider that option. So does this mean the President’s proposal might save some American jobs? Definitely not. If deferral is curtailed, that may prevent an American company from taking advantage of a profitable opportunity to build a factory in some place like Ireland. But U.S. tax law does not constrain foreign companies operating in foreign countries. So there would be nothing to prevent a Dutch company from taking advantage of that profitable Irish opportunity. And since a foreign-based company can ship goods into the U.S. market under the same rules as a U.S. company’s foreign subsidiary, worldwide taxation does not insulate America from overseas competition. It simply means that foreign companies get the business and earn the profits.

To put it bluntly, America’s tax code is driving jobs and investment to other nations. America’s high corporate tax rate is a huge self-inflected wound for American competitiveness.

Getting rid of deferral doesn’t solve any problems, as I explain in this video. Indeed, Obama’s policy would make a bad system even worse.

But, it’s also important to admit that shifting to territorial taxation isn’t a complete solution. Yes, it will help American-based companies compete for market share abroad by creating a level playing field. But if policymakers want to make the United States a more attractive location for jobs and investment, then a big cut in the corporate tax rate should be the next step.

Daniel J. Mitchell • July 20, 2012 @ 4:58 pm
Filed under: Government and Politics; International Economics and Development; Tax and Budget Policy
Tags: Competitiveness, corporate income tax, Corporate taxation, Deferral, Double Taxation, economics, fiscal policy, International taxation, taxation, Territorial Taxation, Worldwide Taxation

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