Friday, April 21, 2017

76 Million Pay No tax

Over 76 Million Americans Will Pay No Income Tax, 4/19/17 (Moneyish)

Many Americans won’t owe the government a dime today. More than four in 10 American households (44.3%) — or upwards of 76 million — didn’t pay any income tax to the federal government last year, according to data for 2016 from the Tax Policy Center. This year that number is expected to be roughly the same, at 43.9%.

Most of these people aren’t paying income taxes because they either don’t have any income that is taxable (many fall below the poverty line), or because they get enough tax breaks and don’t owe the government money. Common tax breaks include the child tax credit, the earned income tax credit (EITC), and the exclusion of some or all Social Security income, explains Roberton Williams of the Tax Policy Center.

Of course, this doesn’t mean that this group is completely tax exempt: “Roughly 2/3 of those paying no federal income tax work and pay federal payroll taxes that support Social Security and Medicare; about 60% of the rest are elderly and thus retired and not working; and most of the rest have very low incomes,” says Williams.
Income level               Average per Person

Lowest 20%                -$655

Second lowest 20%    -$513

Middle income            $2,178

Second richest 20%    $7,220

Richest 20%               $50,445

Though millionaires and billionaires not paying taxes frequently make headlines — Warren Buffett is famous for having said he has a lower tax rate than his secretary thanks in part to how investment income is taxed — the reality is that the lion’s share of federal income taxes are paid by those who are rich…

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