Remember when Mitt Romney was running around saying that 47% of Americans don't pay tax? The remark got him in a lot of trouble and it probably cost him the election.
That number, 47%, is a very misleading number. It's arrived at by subtracting the labor force (157 million) from the population (300 million). That leaves 143 million not in the labor force. When you divide 143 million by 300 milllion it gives you 47%. So Romney is assuming that if 47% of the population is not in the labor force they're probably not paying any tax. Actually, these days, the number is more like 50% because the population is closer to 320 million.
For starters, Romney's claim is wrong because people still pay sales tax throughout most of the country whether or not they are employed.
More importantly, however, there's the fact that a big chunk of those 47% are babies, old people, sick people, kids, and others who are just not going to be employed. They can't be.
So is Romney saying that as a society we should be making babies pay tax? Or kids and elderly folks? It's ridiculous.
What about robots that are not employed? (Sitting in a warehouse.) Should they have to pay a tax, too? How about when they are working?
The fact is, 80% ($2.07 trillion) of the $2.6 trillion taken in by the Federal Gov't is withheld income and employment taxes. That's Social Security and FICA and stuff like that. That's taken from people working for a paycheck and those people are primarily middle class and working poor.
Corporate taxes amount to $345 billion--only 16%--and individual income taxes (what many wealthy pay) amounts to $72 billion or, 3.4%. By the way, gift and estate taxes (inheritance taxes) only come to a measly, $685 million (three one hundredths of a percent.) but the rich cry and whine about that like crazy.
Here's the data from the Treasury. It's Table IV from the Daily Treasury Statement. All figures are in millions so please read it correctly.
8 comments:
"More importantly, however, there's the fact that a big chunk of those 47% are babies, old people, sick people, kids, and others "
Excuses, excuses Mike!
Americans are overtaxed. I thought the GOP was the party of tax cuts. Or is it just for the wealthy? Didn't Reagan raise payroll taxes to 'save social security.'
Democrats need to cut taxes and outflank the GOP.
Mike what is the "individual income tax?" How is this different from employment taxes witheld?
I also thought what contributed to his "statistics" were people who worked and who paid taxes but because of things like child credits, local taxes, and mortgage interest actually owed no Federal income tax. He knew all of this... he was preaching to a bitter and entitled room of people who wanted to hear divisive rhetoric. That's what all politics have become... pitching us against them. Who ever finds the right combination of "us" and "them" wins the White House.
Justin,
Some people who are self employed (but not incorporated) and who do not pay payroll taxes have to pay individual income taxes.
oh right, of course. Thanks! I love these analyses that you and Matt do....truly unique stuff. Cant believe more mainstream analysts dont make use of this stuff.
I do cry and whine about the self-employment tax, I'll admit that.
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