the “half of all Americans pay no taxes” myth debunked

Basically stealing my post today from Fred Clark, who links to two excellent posts by Kevin Drum dismantling the oft-repeated lie, most recently trumpeted by supposed pastor Rick Warren, that “half of all Americans pay no taxes.”

Drum first points out that it’s simply not true. All Americans pay taxes — though some don’t pay federal income tax, a tax that falls disproportionately on the wealthy, as it was designed to do. Drum has a nifty graph showing the distribution of total taxes by income quintile:

From the Tax Foundation, an organization that even conservatives ought to be willing to credit, here’s a report from a few years ago showing the total tax burden on various income groups in America:

…The blue bars don’t cherry pick just the federal income tax to make a dumb partisan talking point; they show how much each group actually pays in total taxes. Bottom line: Poor people pay less in taxes than rich people, as they should, but it’s very far from zero.

But more importantly for people like Warren, whose putative mandate is to serve the least of these brothers and sisters of Christ, we should ask why nearly half of Americans pay no federal income tax. Is it because they’re a bunch of devious bastards who’ve somehow engineered massive, pointless tax cuts for themselves and shifted the bill to the rest of us? (Hint: No.)

Drum points us to this post by Bob Williams at the Tax Policy Center for an explanation:

[A]bout half of people who don’t owe income tax are off the rolls not because they take advantage of tax breaks but rather because they have low incomes. 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. The basic structure of the income tax simply exempts subsistence levels of income from tax.

(By the way, this applies to everybody, not just the poor — you and me and Bill Gates and Warren Buffett and the Koch Brothers. None of us pays any taxes on the first several thousand dollars.)

What about the rest of the untaxed households, the 23 percent of households who don’t pay income tax because of particular tax breaks? …Three-fourths of those households pay no income tax because of provisions that benefit senior citizens and low-income working families with children. Those provisions include the exclusion of some Social Security benefits from taxable income, the tax credit and extra standard deduction for the elderly, and the child, earned income, and childcare tax credits that primarily help low-income workers with children…. Extending the example offered above, the couple could earn an additional $19,375 without paying income tax because their pre-credit tax liability of $2,056 would be wiped out by a $2,000 child tax credit and $57 of EITC.

That means the people who aren’t paying federal income tax are the desperately poor, old people, and working-class families with kids. We ought, perhaps, to ask why 23% of Americans fall into in the first category, i.e., living at “subsistence levels.” We ought to ask whether there are specific social policies that have led to a quarter of Americans living in real poverty, and if so, what to do about that. (Other than browbeat them for not paying taxes.)


Here’s another, related fact-check by Fred Clark, this one aimed at the common misconception that Jesus said that “The poor you will always have with you,” as though he were commenting on a fact of nature, like, “The sun will always rise in the east.” In fact, Jesus was probably alluding to Deuteronomy 15:11, which reads:

For the poor will never cease from the land; therefore I command you, saying, ‘You shall open your hand wide to your brother, to your poor and your needy, in your land.’

But, Clark writes, look at the beginning of Deut 15, because it also says

[T]here shall be no poor among you; for the LORD shall greatly bless thee in the land which the LORD thy God giveth thee for an inheritance to possess it:

Only if thou carefully hearken unto the voice of the LORD thy God, to observe to do all these commandments which I command thee this day.

In other words, God seems to be saying that if the Israelites obey Him (in the context of this passage, that means debt forgiveness, an idea I haven’t heard a lot of modern preachers clamoring for), there will be no poor among them. But they don’t, so there are.

As a non-believer, I happen to think we can do better than the Deuteronomical standard, which only extends debt forgiveness to the “brethren” of one particular tribe, pointedly excluding “foreigners.” But Clark’s point is that if there’s poverty, that’s not because of an immutable decree of the Lord — it’s because we’ve failed to enact structural solutions like periodic debt forgiveness.

By the way, no mention is made of self-righteously administered charity. Just structural solutions.

Rick Warren, take note.

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7 Responses to the “half of all Americans pay no taxes” myth debunked

  1. JTS says:

    You didn’t even mention sales taxes, which hit the poor as a higher percentage of income for them is spent, not saved.

  2. johnfx says:

    To be fair, the comment was made in the context of talking about income taxes, so while discussing the larger tax picture (which is still heavily weighted against the rich, just not quite so much so) is a valid thing to discuss, trying to debunk this statement by changing the context it was given in is intellectually dishonest. This whole post smacks of throwing a bunch of loosely related facts and theories against the wall to see what sticks.

    • thehandsomecamel says:

      Well, to me, making sweeping false statements that your many, many followers will not bother to fact-check, even with their own experience, and then deleting the tweet when you’re called on it is “intellectually dishonest.” And I find the way the right has moved the discussion about taxes so that it’s always and only about federal income taxes even more “intellectually dishonest.” But to each his own, I guess. Thanks for stopping by.

    • thehandsomecamel says:

      Or to put it another, slightly less snippy, way, Rick Warren’s problem is not that he didn’t bother to say “federal income” in his tweet because he thought it would be understood in the context of a larger discussion. Rick Warren’s problem is that he thoughtlessly repeated a right-wing talking point. And even if you accept the “context” excuse, which I don’t buy, his statement — “HALF of America pays NO taxes. Zero. So they’re happy for tax rates to be raised on the other half that DOES pay taxes.” — is just awful, because it suggests that (a) the less well-off are a bunch of selfish assholes, and (b) there’s nothing strange about the fact that half of American families don’t make enough money to be charged federal income tax.

      I mean, do you really think, or does Rick Warren really think, that we have a tax system designed to exempt half the population from paying taxes under normal economic conditions? Or do you think it’s possible that we’ve had rampant unemployment and underemployment and wage cutbacks for almost three years now, so that many more people are now living at or below subsistence level and THEREFORE not paying federal income tax?

      To his credit, in another tweet a few days later Warren linked to the same Kevin Drum article I did:

      http://twitter.com/#!/RickWarren/status/96774455686201344

      So I’m willing to believe that he now understands that what he said was factually incorrect, although I doubt that will change his overall philosophical stance much.

  3. Marilyn Jose says:

    I am becoming more and more concerned about the failure of the principles of “Americanism” and “religion” lately. Who are these people living in my country who care little about the unsettling state of the USA, the word, but even worse, who cherry-pick Bible passages to justify their Godlessness? Thank you for this site.

  4. Didi Paano says:

    It’s mostly our politicians who are running on their religious backgrounds and NOT on the problems at hand in the U. S. today!! So many people complain about Romney’s Mormonism; Paul’s and Perry’s angelical stance, etc. I don’t really CARE what religion they are….I want to know what they plan on doing to help our economy other than continue blocking legislature that would actually do some good!! Apparently, they have failed to read their bibles (or whatever the Mormons read) that tells us to care of our poor, our downtrodden, etc. Somehow, I remember learning that when I went to bible school as a child, and I continue to hear it from my pastor’s pulpit weekly (although my church pushes Republican candidates for some reason)! Interesting!

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