And
"The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment."How does the family of four making $50,000 eliminate their income tax liability?
"The family was entitled to a standard deduction of $11,400 and four personal exemptions of $3,650 apiece, leaving a taxable income of $24,000. The federal income tax on $24,000 is $2,769.
With two children younger than 17, the family qualified for two $1,000 child tax credits. Its Making Work Pay credit was $800 because the parents were married filing jointly.
The $2,800 in credits exceeds the $2,769 in taxes, so the family makes a $31 profit from the federal income tax. That ought to take the sting out of April 15."
9 comments:
It's a little misleading how you have stitched this quote together:
"...a family of four making as much as $50,000 will owe no federal income tax for 2009..." Also, "...the top 10 percent of earners -- households making an average of $366,400 in 2006 -- paid about 73 percent of the income taxes collected by the federal government."
. . . as if top earners pay 73% of their income in taxes. That's not their personal tax rate but you juxtapose it next to the personal tax rate of individuals. If anything, the fact that the wealthy pay 73% of tax revenues collected shows the enormous income disparity in America between the rich and the poor. The rich in American are fabulously wealthy.
I didn't do anything misleading. The sentence is very clear. And I certainly said nothing at all abut how wealthy or unwealthy anyone is. You decided to throw in that tidbit. The quote I threw in their actually says the amount of money that they earn. So I was not hiding anything about anyone's wealth. The two quotes go together because if people under a certain income level pay no income taxes it leads to the question of how much of the government's tax revenue comes from the upper income groups.
I don't see why a subset of people who earn $50,000 or less (that is, those with two or more children) and pay no taxes begs the question of how much is contributed by all high income earners. The fact that poor people owe little or nothing in federal income taxes is nothing new. And, sorry, I didn't mean to attach any malevolence to your comments.
Those two points seem like mirror images to me.
I'm still having a little trouble with that mirror image. First, we've got the family of four with 2 kids under 17 that make up to $50,000. Shouldn't we also throw in the family of 10 with 8 kids who make up to let's just say $70,000? Then we can throw in the family of 2 with no kids and an $8,000 first time home buyer credit who made $65,000 and also paid no taxes. We can lump them all together into "those guys who paid nothing in federal income taxes." The mirror image of that group, of course, is "those guys who paid not-nothing." Does this also beg the question, what portion of the total federal tax revenues did folks in the top 10 percent of all earners contribute to the total amount of taxes paid by everyone?
I am just not sure what you are getting at. If someone tells me that half the population (the lower half) pay not income taxes, my next thought is "how much is being paid by the upper half or some other segment since it will have to be very large."
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libdems
The question that is relevant, that people who have posted previously are assuming to be implicit, is this. Is it a bad thing that people making $50K or less end up paying nothing in taxes? Consider this...
47% of the earning population makes $25K or less. Another 20% makes $25-$50K. There are roughly 150,000,000 people who work in the U.S. So approximately 70% of the U.S. population ( 105 million) accounts for roughly $3.75-$4 trillion in total annual income. This is dwarfed by the income generated by the top 10% earners.
It is not clear to me what your point is.
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