Half Of Americans Don’t Pay Any Taxes

-Submitted by David Drumm (Nal), Guest Blogger

It’s a common claim from the Right, but it’s not true. Senator John Cornyn (R-Texas), in a Senate floor speech,  claimed “Fifty-one percent — that is, a majority of American households — paid no income tax in 2009. Zero. Zip. Nada.” At least he used the often omitted “income” adjective. However, those individuals still pay payroll taxes, like Social Security and Medicare, sales taxes, and often property taxes.

When Republican Senators give speeches complaining about someone not paying enough tax, you can be sure of two things: one, they’re not talking about corporations and two, they’re not talking about the wealthy. If you’re not a member of either of those two groups, hold onto your wallet. The Republican hatred of increasing taxes doesn’t apply to everyone’s taxes, just those who can afford to them get re-elected.

A report from the Tax Policy Center examines the facts. Here’s an overview:

• 23% pay nothing because they’re poor. For example, a couple with two children earning less than $26,400 will pay no federal income tax this year because their $11,600 standard deduction and four exemptions of $3,700 each reduce their taxable income to zero.
• 10% are elderly and pay nothing because their Social Security benefits are exempt from federal income taxes.
• 7% pay nothing thanks to provisions in the tax code designed to benefit low-income families: the earned income tax credit, the child credit, and the childcare credit account.

The other 6% benefit from tax-exempt interest, itemized deductions, education credits, other credits; and reduced rates on capital gains and dividends.

That’s whom the Republicans want to tax: poor families and the elderly, those least able to afford the tax increases. The shocking aspect of these facts is the existence of such a huge number of people that are so poor, they balloon the percentage up to 46%.

H/T: Kevin Drum, Roberton Williams, Donald Marron.