News Story of the Day: The number of Americans who don’t pay income taxes is under the microscope again. Ever since Donald Trump announced his tax strategy would prompt half of the country’s working population to pay zero in income tax, experts and policymakers have crunched the numbers.
Earlier this week, the Tax Policy Center revealed in a report that the number of United States households that don’t pay federal income taxes dropped to 45.3 percent, though it’s still five percent higher than the 2013 estimate of 40.4 percent.
This means that 77.5 million Americans pay absolutely nothing in income taxes. But with massive budget holes and the government wanting to get more of its “fair share,” researchers say that number will eventually dip over time.
“We now estimate that 40 percent of tax units won’t pay tax in 2025, higher than our previous projection of about one-third,” the organization’s Roberton Williams said.
He did note that just because these people don’t pay income tax, it doesn’t mean they don’t pay any tax.
“I must conclude with an important reminder: Just because people don’t pay federal income tax doesn’t mean they don’t pay any tax. In fact, nearly everyone pays something. Three-fifths of those who don’t owe income tax work and thus pay Social Security and Medicare payroll taxes. And almost everyone pays state and local sales taxes, excise taxes, or some other levy.”
Chart of the Day: Just how well are some of the nation’s metro areas doing? Well, this chart (courtesy of the American Enterprise Institute) lists the gross domestic product growth of the top 20 cities. You’ll notice a trend that much of the economic growth is coming from the state of Texas.
Illustration of the Day: The ZIRP goes on at the Federal Reserve. Maintaining the status quo means there is a Sisyphus effect and the country is just walking on a treadmill. This illustration (via the Cobden Center) says it all.
Quote of the Day: With the rise of the likes of Bernie Sanders and Kshama Sawant, socialism is becoming a popular ideology again. Oy vey! Despite the failures of socialism, communism and Marxism, many people, particularly college students, are reigniting their love affair with it. Can we hear from legendary economist Thomas Sowell?
“Socialism in general has a record of failure so blatant that only an intellectual could ignore or evade it.”
I like Trumps tax plan. I pay zero federal income tax and have most of my life. Raising four kids on between $10,000 to $35,000 per year over 20 years. Never using welfare, never even thought of applying for it. Now it is just the wife and I and we live very comfortably on $20,000 per year. I have been in favor of a federal tax system that gives everyone the first $50,000 tax exempt and then starts taxing income with very few deductions. Then you could keep tax rates lower for everyone who has income that is taxed. You have to tax the rich more because they have the money. But I believe a system with very few deductions could raise the money needed to fund government at 25%.