Report: Fifty Percent of Households Pay No Federal Income Taxes

A recent report shows that 47 percent of U.S. households pay no federal income taxes. The Tax Policy Center found that the percent of non-paying households had risen from 38 percent in 2007 to 47 percent this year.

Another interesting factoid is that households making more than $366,400 paid about 73 percent of the income taxes collected by the federal government.

This is not the image often presented in Washington when legislators complain about tax fairness for the middle class. White House adviser Paul Volcker appeared to call for higher taxes yesterday to deal with the rising deficit and Obama officials have been suggesting that the wealthy should face higher taxes to establish tax equity.

For the full story, click here.

149 thoughts on “Report: Fifty Percent of Households Pay No Federal Income Taxes”

  1. “We remind our employees of this responsibility as part of our mandatory annual ethics training. Upon receipt of an official notice from the IRS about a specific employee’s noncompliance, NCPC will take appropriate administrative action.”

    Other notable agencies on the list:

    * Executive Office of the President (includes the White House): 50 employees owe $812,917;
    * U.S. Senate: 231 employees owe $2,469,026;
    * U.S. House of Representatives: 447 employees owe $5,809,631;
    * U.S. Tax Court: 3 employees owe $39,752;
    * Active Duty Military: 27,111 employees $102,474,672.

    While some taxpayers may scratch their heads and ask why the federal government doesn’t garnish the wages of these employees, the reality is they can’t. According to federal tax laws, employees are treated the same as any other taxpayer who doesn’t pay their taxes.

    The IRS must go through the same procedures and court process with feds as it does with John Q. Public. Once a court awards the IRS a judgment or if the employees enter a voluntary payment plan, the IRS can garnish wages. However, federal employees do jeopardize any security clearance they may have if they don’t pay their income taxes.

    As for the general public’s voluntary compliance rate, the IRS no longer tracks those numbers, so it is impossible to compare. But an IRS report from 2001 (PDF) showed the total tax gap to be about $345 billion. The tax gap is the difference between what is owed each year and what is paid, and includes income, corporate, employment, estate and excise taxes.

  2. “Going to jail is possible, but generally reserved for those whose failure to pay is intentional, Evade, file fraudulent returns.

    Again the poster does not acknowledge nearly 100,000 civilian federal employees owe the IRS $962 million in back taxes and are not in jail. This is a small percent of the actual tax dollars owed to the Federal Government. Turbo Timmy is not in jail, nor Charlie Rangel. Again if your the average Joe and you do not intentionally try to defraud the Federal Government over income taxes you will not go to jail although it is possible. As the old saying goes, you can’t get blood out of a turnip but you can seize it, hold it, sell it for monies owed, Ask Willie Nelson.

  3. Seriously folks, the tax denial and tax defier stuff posted here by badaman and BaVamaM is sheer lunacy. File tax returns. Pay the taxes owed, or seek professional assistance for extensions or payment plans.

    The idea that there is some difference between evasion of taxes and failure to pay is moronic.

    The birthers around here are ineffectual and mostly harmless losers.

    But the tax defiers are perniciously evil. They pay their own taxes very carefully, but then irresponsibly advise others that they are not legally obligated to pay.

    When the poor people who listen to them find their lives destroyed, the tax defiers are nowhere to be found.

    Suppose someone listened to badaman’s advice, and it turned out to be wrong. Where would the turn? Not to badaman. He is just a troll. Not to BVM, since he, she or it is just a Mall.

    To my knowledge Professor Turley does not endorse tax deniers, tax defiers or tax evaders.

    Just get your nonsense off our site.

  4. “The evidence presented at trial also proved that Schiff evaded the payment of more than $2 million in taxes he owed the IRS between 1979 and 1985. Schiff concealed income he earned from Freedom Books, in part, by using offshore bank accounts and conducting financial transactions through secret “warehouse” banking services. The evidence also showed that Schiff used debit cards issued by offshore banks to obtain funds he transferred offshore, that he opened bank accounts using multiple tax identification numbers and that he concealed his wealth by hiding his assets through the use of nominees.”


  5. Wiki answers:

    QUOTE Could you go to jail if you don’t pay taxes?



    The government will eventually come after you for tax evasion, if you are living in the US. In Canada, there is no “tax evaders jail”, but they would likely take some of your paycheck, or refuse to refund any other taxes until the full amount is paid.

    There are currently many tens of thousands of people in jail (or on parole/probation/special program) for tax-related charges.

    The government’s first interest would be getting restitution (i.e. paid in full), including interest and penalties. Assets can be seized, as well as current profits. Anyone having a business connection will receive notices to surrender “accounts payable” to the Government. This can be legally fought, but non-filers snubbing their noses at the system will not get much mercy. If the debtor agrees to pay up and remain current, he can avoid criminal prosecution and jail.

    Going to jail is possible, but generally reserved for those whose failure to pay is intentional. The act of failing to file and pay is criminal. It is theft from the government and your fellow citizens. Just ask Leona Helmsley, a very wealthy and powerful person, who had accountants to do her bidding. Despite her famous quote that “…only the little people pay taxes…”, she paid AND went to jail. And while not all these others went to jail, some did and all paid large amounts of back taxes and penalties. Note that they cover a broad range of people…all very wealthy, able to afford the best of defenses by the most competent of teams of tax law experts AND had “ins” with the system, even up to and including a VICE PRESIDENT (who was also a lawyer, and one may suspect has all the inside info and political favors to call). They were all subject to tax of many types and were found to either failed to pay, or even just not pay enough. Actor Wesley Snipes, Country singer Willie Nelson, Baseball star Darryl Strawberry, Former Vice President Spiro Agnew, “Survivor” Richard Hatch (released from jail this week I believe), Mobster Al Capone (thats right…the most wanted man, and one of the richest and most powerful men of his time, actually was never found guilty and jailed for any of those acts, but spent his life in jail when prosecuted for tax evasion), Tennis star Boris Becker (who wasn’t even a US citizen), “Hollywood Madam” Heidi Fleiss to name a few.
    It is shortsighted to avoid taxes. Many people rely on governments for programs and services : Social Security, Medicare, child benefits, and others. If you’ve been negligent in paying when you should, collecting anything is almost impossible. Add to that, if any of your earnings ever have withholding (payroll or interest), you can’t get them back without filing.UNQUOTE

  6. Haiku found in a bottle:

    Tax man Irwin Schiff.

    Paid no tax. Was convicted.

    Serving thirteen years.

  7. I wonder when are they going to announce that if these people refuse to pay that they are gonna throw them in jail for failure to pay, cause there’s 100,000 civilian federal employees already waiting in line. 🙂

  8. ” Look we want to TAKE money and put it in the pocket of middle class people. It’s patriotic, time for the real deal.

  9. Now the poster knows that someone was sent to prison for TAX EVASION and not FAILURE TO PAY

    Have another cup of coffee.

    Written prediction ™©®: He will deny everything.

  10. Forgot, all these people are not in jail either for FAILURE TO PAY.

    Nearly 100,000 civilian federal employees owe the IRS $962 million in back taxes.

    “If you get to the point where the government is putting a lien on their property and they’ve exhausted their appeals… the right thing to do is fire them as a federal worker,” said Chaffetz. “If you’re going to take federal tax dollars, you should be paying your federal taxes.”

    Currently, only IRS employees can be terminated for non-payment of federal income taxes — a measure Chaffetz wants extended to all federal agencies. The IRS has the lowest level of tax delinquency among its employees than at any other federal agencies, according to the most recent statistics.

    Notice how it doesn’t mention anything about putting people in jail for failure to pay.

  11. Gietner failed to pay taxes did he go to jail.

    At the Senate confirmation hearings, it was revealed that Geithner had not paid $35,000 in self-employment taxes for several years,[27] even though he had acknowledged his obligation to do so, and had filed a request for, and received, a payment for half the taxes owed. The failure to pay self-employment taxes, in part due to the way his employer reported his wages which was not in accordance with tax law, was noted during a 2006 audit by the Internal Revenue Service.

    No, but he did pay his taxes but I guess being who he is and everything he paid them with no interest and no penalties and got a short term loan in the form of a request for payment for half the taxes he owed but he didn’t go to jail.

    Charlie Rangel just says he was ignorant about his whole affair, but he’s not in jail either.

  12. Thats tax evasion, to defraud the government, not FAILURE to pay. He had the means to pay and evaded paying them. If you don’t have the money to pay your taxes, you don’t have the money. Try to defraud a code and file a fraudulent return will get you every time.

    If your an ordinary Joe who filed your return and all your t’s were crossed and i’s dotted and owed money for taxes and in the end can not pay, first the interest starts. If you don’t start paying or working out a payment plan thats when they come to seize your property and can literally put you in the street. At that point you probably have nothing left. They will not come and then put you in handcuffs cause you didn’t pay them the money.

  13. 8:07 AM: “I’ve never heard of anyone being sent to prison for failing to pay taxes.”

    Facts with source and link.

    Irwin Schiff.

    Convicted of evading the payment of millions of dollars in back taxes owed.

    The evidence presented at trial proved that Schiff evaded the payment of more than $2 million in taxes he owed the IRS between 1979 and 1985.


    Serving 13 years.

    Now the poster knows that someone was sent to prison for failing to pay taxes. Have another cup of coffee.

    Written prediction ™©®: He will deny everything.

    Goneville, thank you for bringing the fresh air of legal reasoning, historical fact, and actual case citations to this legal blog, a blog conducted by a law professor who is an expert on constitutional law. You are a welcome addition to our conversation.

  14. Wow goneville, very impressive. One thing about Willie Nelson is he never went to prison. The government seized everything he owned and auctioned it off to satisfy his tax debt. The majority of his friends bought all of his stuff from the government and gave it back to him, so the story goes. I think he tried to produce an album or did produce one and tried to somehow use it to pay his back taxes, but he never went to prison. It’s my understanding that Wesley Snipes went to prison for failure to file or filing a fraudulent tax return. I’ve never heard of anyone being sent to prison for failing to pay taxes. If one does, the government has the right to take all your stuff to satisfy your debt. I’m pretty sure, and this may have changed, that threw chapter 7 bankruptcy what ever amount you owe afterward can be wiped out but your still left to start all over again.

  15. what rafflaw said

    goneville-n-keys wins … no “alleged” about it

    Anybody notice how old these tea baggers are … lawn chair protesters … they sure aren’t a movement that has the youth involved … that means no future, just past …

  16. Goneville:

    to tell you the truth I honestly did not know there were people challenging the legitimacy of the 16th amendment. I had never heard there were people who thought as BVM and others appear to. I am actually surprised and somewhat amussed by that, seeing as how the amendment is almost a hundred years old.

    You learn something new everyday.

  17. Well here Byron. Never let it be said I’m not helpful.

    Since you overlooked the rulings and facts your new friend BVM made me repeatedly post before scurrying off to his next assignment, I’ll provide you with the part you will want to grasp.

    Again, from the ruling.


    “The Secretary’s decision is not transparently defective.

    We need not decide when, if ever, such a decision may be reviewed in order to know that Secretary Knox’s decision is now beyond review.”

    United States v. Thomas, 788 F.2d 1250, 1253-1254 (7th Cir. Ill.


    So there is no “evidence”, flimsy or otherwise.

    As the ruling states, it is “now beyond review”.

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