44% Of Americans Won't Pay Any Federal Income Tax

Tyler Durden's picture

Authored by Catey Hill via Moneyish.com,

Yesterday, April 18th was the deadline for filing your taxes

Many Americans discovered they don’t owe the government a dime.

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.

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 taxedthe reality is that the lion’s share of federal income taxes are paid by those who are rich.

More than 31% of all federal individual income tax is paid by those who bring in more than $1 million a year, who have a net effective tax rate of 25.3%, the highest of any group. Another 14% of income tax is paid by those who make between $500,000 and $1 million, who have a 20% tax rate, the second highest.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
ronaldwilsonreagan's picture

The pentagon has the addiction to big government. so much so that they can lose 6 Trillion dollars and nobody investigates this. To worried about Hillary's emails. Now I know a Trillions  is beyond the imagination or intelligence of the average Zerohedge reader but lets just say it is a really big number. Now some ignorant stupid fucktard here is going to tell me it is because of Social Security or because of Obama care. Just go fuck off you bunch of dumb fucking retards. Trump is going to feed the welfare mothers of the Military Industrial Complex like they have never been feed. A real tax and spend liberal.

Richard Chesler's picture

I just paid a small fortune to these bloodsuckers.

Bastards!

erkme73's picture

^^^^^ Fuck you spammer ^^^^  

 

For me an my  house, I paid $117k this year.  Makes me want to vomit.

jeff montanye's picture

here's how you do it.  accumulate capital assets.  capital gains are treated way, way better than earned wages, every way, every day.  for income buy municipal bonds.  for estate taxes, such as they are, buy life insurance and/or create "charitable foundations".  at death all taxable capital gains are wiped out and the capital assets' tax cost basis becomes date of death value.  sell some and buy more muncipal bonds.  

and keep going.  the rich write the tax laws, in case you haven't noticed.

Bastiat's picture

I know a kid who's 29 who made $24K and paid the bloodsuckers $5K.

Took Red Pill's picture

new site launched yesterday that says it has all the facts about where the money goes. They say they are not affiliated with any political party.

http://usafacts.org/

SmackDaddy's picture

I don't have a problem paying taxes.  I would be happy to buy into an ethnostate that secured the existence of our people and a future for white children.

What I have a problem with is being held at gunpoint by jews who take my money, spit in my face, and toss some shekels at blacks while encouraging them to attack me.

J S Bach's picture

"Many Americans discovered they don’t owe the government a dime."

 

In truth, they don't owe the GOVERNMENT a dime... they owe the USURERS a dime.  Most of the funds collected as income tax goes to pay the national debt - which means we get NOTHING as a public benefit for it.  Ain't our system grand?

wren's picture

44% down, another 56% to go and nobody will be stolen from...

TheABaum's picture

7% more and 49% will simply be beasts of burden.

Donald Trump's picture
Donald Trump (not verified) TheABaum Apr 19, 2017 11:42 AM

No one is happy about paying taxes.. not to mention this hot lady.

She gave even the shirt (and more) off her back to the tax man

This Model is Not Too Happy about Paying Taxes (NSFW)

http://dailywesterner.com/news/this-model-is-not-too-happy-about-paying-...


PrayingMantis's picture

... headline >>> "44% Of Americans Won't Pay Any Federal Income Tax"

possible translation ... >>> "44% Of Americans Out Of The Labor Force And Has No Federal Income Tax To Pay"

... now that makes more sense ... ;)  

/s

 

Chief Wonder Bread's picture

I just paid (painfully) federal and state for rolling the dice

It doesn't reflect the real risks

toady's picture

100% of U.S. corporations paid zero taxes.

TwelveOhOne's picture

Also check out http://losthorizons.com for how to get back the money you paid in, in full.

Income is not all that comes in.  You don't "make" money -- you trade your labor in exchange for others' labor, which is represented by dollars, currently.  Pretty much no such thing as profit, a neat concept.  Taxation is only for those whose earnings are performed by using government property or government offices.

I haven't read the following, just had the thought the other day so I could be wrong, but: "Internal" Revenue Service -- it's "Internal" to the government, it's not supposed to affect the public, it was only to take back a small portion of the money the government paid out, whether in salaries or in offices.

Ace Ventura's picture

You are correct with regard to income, and the subsequent illegality of the 'income tax'. It's a mind-blowing thing to realize the whole thing is ILLEGAL and yet the IRS still goes about its routine thievery as if it was the noble law of the land.

The 16th Amendment has a very shady history, and if you research it you will not like what you find.

44magnum's picture

It should have been called what it is the Debt Slave Amendment

Blue Snowflake's picture

Help me understand this because I want to agree however the numbers don't quite add up. Just some quick Googling:

http://www.taxpolicycenter.org/statistics/amount-revenue-source

Above shows $1.5ish Trillion Individual Income Tax Revenue for 2015

https://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm

Above shows ~$0.4 Trillion Payment on National Debt.

 

So roughly 1/3 of individual income tax goes to interest on national debt unless I am missing something. If you factor in corporate income taxes it's an even smaller % that goes to interest on national debt.

 

Probably a distinction without a difference, though. The debt is still there and will be held over us as a legitimate encumberance.

Yog Soggoth's picture

This is a simple to understand series that explains how the scam works 

Hidden Secrets Of Money - Mike Maloney's... - GoldSilver.com  The debt is created by sleight of hand and can never be paid back. No number crunching needed.
MEFOBILLS's picture

The system was changed by deception in 1912.   Progressive era machinery of 16'th, 17'th, Federal Reserve Act, and IRS all work together to usurp founders intent.

For example, 16'th is unconstitutional because income taxes are not apportioned.

"Article I, Section 2 of the Constitution requires that direct taxes be apportioned among the states by population. The Founders defined “direct tax” broadly, usually using the term as a synonym for “internal tax” and encompassing all taxes except for customs duties. The Founders expected Congress to use direct taxes"

Every ruling against income taxes, when it goes to the supreme court, wins. In other words, supreme court agrees that 16'th is unconstitutional. Lower courts uphold income taxes because, you know, we've been doing it for awhile and it is case law. 

17'th ammendment is even worse than 16'th. 17'th destroyed states rights and federalism.  The founders specifically wanted STATES (meaning state legistlatures) to send their Lions to Washington.  The Sentators were to be above the political fray, the senate a great deliberative body, and to NOT BE POPULIST.  Representatives are already a populist wing.  A country that is run by two populist wings is unbalanced.  Everytime you vote for a senator, tell youself "I've been punked."

A populist Senate is easy to usurp with bribes and lobbyist money.  That means Senators are not beholden to their states, but instead beholden to money power.  Senators need this lobby money to run adds, and to effectively buy your vote.

Then comes IRS and Federal Reserve Act.  Creation of FED made a giant money trust of private banks.  Finance now has the money power, because they create the money, to usurp the polity.  IRS is an enforcement arm to make sure taxes are paid, to then bail out our banking illuminist overlords.  Remember TARP?

The original Federal system could have worked, but it was undermined and usurped by usual ((suspects)).  

When something fails, it should be scrapped - or fixed.

meditate_vigorously's picture

All of those things are the result of immigration from Europeans other than Anglo-Saxons in the 19th century. Along with the 14th Amendment. TPTB have always used demographics to undermine the Constitution.

Ace Ventura's picture

+1000.....this has been the case since at least 1982. We've been doing nothing but forking over all tax revenue to the banksters in service of the national debt. EVERY DIME spent by Uncle Sugar is more printed/borrowed 'money'.

SpinyNorman's picture

Actually, money collected (fraudulently) by the IRS goes to pay the interest on the national debt.

SumTing Wong's picture

I made enough to take care of me and mine, but I have five children, a mortgage, give to the church and other charities. At the end of the day, they tell me I owe nothing. I'm the asshole at the lunch table who keeps asking whether anyone can come up with a moral reason that I'm paid $5000 a year because my wife and I decided to have children. I ask why my student loan and mortgage interest should be deductible. Why is it that my generosity to charities I support should take money away from you and others? It's asinine, but I do end up being affected, not paying the student loans off and instead investing in the farm. When will we all realize that the tax code is just an excuse to try to control the decisions of Americans?

Flat tax all the way, if we even think we should have an income tax. (And I'd view capital gains as income in that situation.) I'd prefer a simple VAT and no income taxes. You decide what is good for you to do with your money. The bastards in DC will stop having the power to control what you do and will have to stop giving their cronies stupid tax breaks. 

Who is with me?

Leopold B. Scotch's picture

taxation is theft.

 

BTW, the douche above knocking ZH readers is too stupid to understand that the overspending bankrupting us (on top of F'n plundering the real producers) can be BOTH military AND entitlements.... Along with the general looting engaged by the banking cartel in concert with Congress.

Oldwood's picture

Americans have no problem spending money, they simply cling to this notion of actually getting something of value for it. Instead, not only is it wasted, but it is used to empower people indoctrinated to hate us and want to destroy us, largely BECAUSE we have the ability to subsidize them. Show me ANY group in the world who has received assistance from us for any length of time who does not hate us. It is ultimately taken as condescension to simply hand out welfare, as people need self respect above all things, sometimes even more than they need food. And there are ALWAYS strings attached to this "generosity" that attempt to control people's actions. This is always the cost of dependency. Collectivism and wealth redistribution are destructive to society. We go broke because we are incentivized to do so.

Leopold B. Scotch's picture

The Child tax credit was a way to get the middle class hooked on welfare. Thanks Rs and Ds.

1033eruth's picture

It was a way to subsidize breeding.  But we still weren't breeding consumers fast enough, so they stopped enforcing the borders.  

I'll bet if you try, you can probably figure out other ways in which, we as a nation, subsidize breeding (population expansion).   

ToSoft4Truth's picture

"the oil will pay for the war". 

 

A lot of people fell for that goodie. 

Bastiat's picture

Yeah, the oil money may be enough to pay for the war but that money will go to the oil companies. 

Yog Soggoth's picture

There are more than one way to invest in the rebuilding of a nation. Look at what South Korea, Japan, Russia, China, most of Europe, and others are up to in Iraq. Many people thought investing in Asia cell was risky, but look at the old news 

Iraq's Cell Phone Industry Thrives Despite War - ABC News
Joe Davola's picture

I'm with you...

but the tax code is what it is because the more Byzantine it becomes, the more monied interests need to grease the palms of the legislooters who write the tax code to create loopholes.

 

SumTing Wong's picture

So why don't we elect deadbeats like me (like me, not me...I've got more useful stuff to do) to stand up and say what a sham the tax code is? Why don't we call it out for what it is...bribery for the politicians to get the money from people to get re-elected? And why don't we shut this motherfucker down so that we can get to the business of being productive? 

Just another crazy thought. 

Joe Davola's picture

Let's get the t-shirts and yard signs printed now - Senator Sum Ting Wong has a nice ring to it!

Problem is that everyone has a threshold where they can be bought - be it cash, power, sex, all of the above.

That is my hope with The Donald - he already has all those things and has no reason to play within the rules our government has evolved into.

Oldwood's picture

Systems are clever. They seldom encourage or empower those forces which seek to destroy them. We want to elect people to "drain the swamp" which inevitably always requires force above the current laws as currently being enforced, which we inevitably label as fascism or tyranny. Erdogan drained the swamp in Turkey by firing huge numbers of public and military employees who didn't see things quite like he did. Change, even that which we believe we want, can come at extraordinary cost.

 

MEFOBILLS's picture

Flat tax all the way, if we even think we should have an income tax.

Flat taxes are bad.  The classical economists figured out where taxes should land, but the "aristocrats" fought back, and this knowledge is no longer part of normal discourse.  If you hear something over and over again in this fake news environment we now live in, it is probably hypnotic suggestion.

Income taxes, Flat Taxes, and VAT are all bad.  Income taxes reduce your ability to create wealth.  Flat taxes are not surgical and do not go after unearned income.  VAT reduces your ability to create wealth as it taxes wealth formation at every stage of production.

Taxes should land on the cancer, the part of the economic body that is sick.  Unearned income, monopoly, and rents.  Rent taxes prevent tumors from growing.  For example, land does not follow supply and demand curves, so it should be taxed.  Further land is the source of all economic activity, and if it is monopolized, then your entire civilization will fail.  There should never be an income tax + Land tax, which overburdens the population. 

Government should be small and local as the founders intended, so you have a say in how your taxes are spent.  See my earlier note about how U.S. Federalism was usurped.  States are supposed to be like small countries, and even counties are supposed to have a lot of local power.  Centralized power into one giant pyramid in Washignton is bad to the point of suicide.  

Monopoly can form when it attaches itself to the commons.  For example rail road barons helped themselves to cheap private credit, got land gurantees from goverment, then took the rise in land value along routes as unearned income.  This monopoly then tried to take over the country.  So, proper fiscal policy (taxation) is non-trivial.

Today, rent seekers are trying to rip the paid for commons away from public ownership, and privatize it.  In this way, paid for roads, rail, airports, and general infrastructure gets access fees added as permanent tolls.  This then pays for a perpetual monopoly.  Lack of economic freedom is the same thing as slavery.

SmackDaddy's picture

A 29 year old "kid", eh.  Maybe that's the problem.

Bastiat's picture

From my age 29 is a kid.  The person I referred to is quite adult and self supporting.

roddcarlson's picture

Tax avoidance is the answer. First find something you need that no one makes or sells. Build it and sell it on the internet. Make sure to make products for both capital markets (items you sell for making other products) as well as end user markets. The idea is that you will make tons of money on the capital products in booms, and the end user or consumer markets will keep you eating in recessions.

Keep doing this as everytime you build something you learn of something else that is similar or likewise you need and others as well. Start you business with shoe string capital, and quit the day job. Day jobs are for suckers and rent seekers. Three don't buy a house or stocks, both are for suckers and any equity you earn from these are likely to be eaten away in property and taxes. Further both are highly susceptible for bubble collapses and the white picket fence really is a banker prison as Altucher says. Sure you might build equity, but all the politicians see your equity as easily as every ambulance chaser as well. The odds that they won't try to cash in on your equity before you do is becoming diminishingly small with huge government pensions looming. And stocks make one a cow for the Mystery Babylon tribe, the Armstrongs rig the markets and set the prices, collude, and sell the treasures to their buddies at fractional oligarchy prices and leave you a shell of a company that you're invested in. Finally stocks increase your trepidation with the state at year end tax time. Have to report all the shares that aren't sold in equal by lots and carry over the unsold shares. It's just a stupid waste of valuable time.

Rent from bubble collapsed and sparse and law abiding societies. Eliminate all locations that are minority infested as those will also be liberal bastions. There you will be paying rent for houses that have been leveraged 10-15x the average occupant earnings. The taxes and freedom will be severely restricted in those terrible zones. Avoid all locations that have a high density of the fake synagogue of satan or the fake master race. Generally these are the source of Satan's dominion. Generally these people work on a concept of due as thy wilt, and taking advantage of the goy toy.

Next, don't invest in IRA's or other banker/government scams. The whole thing of .1% APR isn't worth the headache of the illiquidity of your money, these are to be raided by the goy hating joy tribe in the future that own the banking empire.

When doing taxes don't buy tax software every year. That will just fuel the Intuits and HR Block to lobby for worse tax laws. Instead, use your 2014 HR block to do current year taxes. Sure there are some values that will change and you will have to download a few forms off the IRS taking a whole 25 minutes. Yes you will have various values change like the Obamacare penalty or the standard deductions and mileage rate changes, but the vast majority of the Schedule C and SE tax calculations will stay the same and help you quickly enter into say http://opentaxsolver.sourceforge.net/. Use the free gpl tax software to calculate the form fields of the 1040 and schedule C, fill in the rest of the old software entries into the new tax year forms you downloaded from the IRS site. By doing this simple exercise and reviewing the entries as what they mean you'll know much more of the tax code than the guy many people hire to plug and chug their numbers into the tax software.

Now I know many will say this is a waste of time, but the reason I advocate it is because it's the small changes like penalties and such that you will learn to keep an eye on that have the most value for legal tax avoidance. The fixed values that stay the same year to year like say the home writeoff on the schedule C. Learn these like for example the maximum Obamacare penalty was 2.5% or the fixed value, and you can learn how high of an ajdusted gross income before the 2.5% starting cutting and making larger penalties than the basic tax for all citizens. Knowing that will enable you to custom tailor your ajdusted gross income to keep these kinds of things from being oppressive the next year.

Of course you will need to project the desired income you want. That might be harder to predict in the beginning of your enterprise, but with time it will become much better. Then the desire is to lower you tax bracket into the safe region by investing in capital items for the company. Doing this right like in say things that meet the section 179 tax writeoff code means you can depreciate the entire value of the capital item installed, bought and used that tax year as 100% depreciation that year. This effectively allows you to keep your money you earn as much as possible in a deferred tax gain feedback much like an IRA but you having much more control of the results. You'll have big equipment that will earn you real income instead of some dividend check that might never come when the company gets raided.

Buy an old car or keep one that you already have that is easy to maitain. I have two older pickup trucks with rear wheel drive, that means the engine is linear from from to back and not set in there at some 90 degree angle. That also means that I can replace the water pump or battery or power steering pump fairly easily. Choosing this car care and the desire and ability to maintain it yourself including painting, body work, rebuilding, or just general repair will mean you can effectively keep your cost below the standard mileage deduction rate offered by the IRS for depreciation of your vehicle. Then your vehicle becomes your mode to do business travels. Lot's of them long as they are about the business. And keep logs of those miles and dates and the business done. This will also drastically reduce your bill to the IRS done right and it will pay you handsomely for those vehicle maintenance you need to do.

Basically the idea is to learn how to beat the system. Some other neat things with owning your own business is that you can live anywhere and thus choose the cheapest and most aesthetic and most free locations in the country. Hint, most of these places lie in the SW and old west of the country.

Sure I still pay taxes, but in the end I effectively lower my tax burden by legal tax avoidance to reasonable by simply using Goliath's rules against him. Key is to learn about Schedule C's and amortization and depreciation and the best way to do this is to challenge onself by actually doing the taxes yourself once in a while at minimum. The easy way of punching in what you got into say TurboTax and just getting her done this year leaves you ignorant for the next. That's what these people love is people that don't know how it works but rely on software to tell them what they owe this year.

Remember every tax law can be used like Jujitsu in using Goliaths weight against him. For example,

roddcarlson's picture

As others said as long as you stay in a narrow band of ajdusted Schedule C earnings the Obama care can be used to butress your high deductible catastrophic insurance or simply none at all. The fact that you can purchase the insurance post fact of say a long term problem, means that it can be a very low cost way to fall back on without having to make upfront payments. In other words Obamacare sucks and will be short lived, but the idea is to turn it to a benefit as much as possible while it exists and you are being forced to participate in the tax law.

roddcarlson's picture

Also I believe that education and opportunity cost of say earning a living in a job could actually be a hinderance in say starting a shoestring capital job using those same skills in the same proportions in your own business. For example, the IRS expects that you pay yourself with self employment taxes being filed a "reasonable wage". So in theory if you made huge salaries doing say CEO work or as an engineer, then the opportunity cost of doing the same kind of work in your own business means you have to pay yourself that "reasonable" wage. You might have say a change of career in your new business that you can use to pay yourself a lower earnings, but the point is that starting your own business as a younger person before getting established wages could be an advantage. For example, if I were doing the same work as my past in 9-5 jobs then I could say that lowering my ajdusted earnings below that value even if by mileage and business capital purchases would be possibly reason for the IRS to get penalties. The point is that the more we make in jobs the more liable we are to keeping our adjusted gross income withing reasonable bounds and thus having to pay the minimum required wages the government requires. Again tax avoidance isn't something that you can reduce your wages to zero by all capital gains investing. But, knowing the tax law is quintessential for being an independent business owner and surviving the era of big government and taxes.

roddcarlson's picture

As far as employees I've been fortunate to not need them. Payroll taxes are something I have some experience in with being a S-corp owner as a consultant. It's not something I really liked doing in cutting myself and others a paycheck bi-monthly and such. So I've been thinking about independent consultants and how the IRS made the 1099-MISC harder to use. And I'm wondering if others have thought or know if they could set up a template system for helping prospective workers own their own S-Corporation, generate their payroll with templated payroll schedules, set up the EIN numbers, and tax payment system and such that you can do like the old days as a employer in passing their earning directly on to them as a s-corp to scorp payment. Assuming one wanted to hire many people and could effectively template the whole s-corp so that any employee could do it and meet their own payroll easily, then I think that the service would have big value to people that want to do what they used to do in accepting 1099 payments for work consulting. I'm actually surprise there aren't 3rd party companies offering this service, or may there is I don't know. Obviously it would be a loophole like the 1099 consultant that the IRS would probably close up in a few years, but sure seems like a good idea from my limited perspective.

buzzkillb's picture

You can't just 1099 the contractor working for you? That's what we do if someone outside our LLC helps us out for a project. Then that person could pay the $800/year for their own LLC if they wanted to. Why do that setup for them, when its easy to do online for a couple hundred $$$?

Or in a friend's case, he develops iOS apps. He is an S-Corp that gets paid basically by Apple. I guess Apple could have incentive to make it even easier to setup shop, but its already so easy.

roddcarlson's picture

You can but these days the conditions of what the IRS accepts as a contractor is very limited. For example whoever you hire can't obtain tools or specific instructions nor work in your company for more than a month or two (top of my head).

The danger is that the many contractors have sued companies for past due benefits because they claimed they were discriminated against and weren't really contractors but rather employees by definitions of the IRs. Also the IRS can back penalize a company that does hire someone as 1099 but is rather an employee by the conditions it sets forth.

So the corp to corp payment is a method around this. Obviously the government knows most people would never go to the trouble of doing a corporation because of the hassle unlike the 1099 route. However, it would be totally possible to set up a template service inside one's own company that help prospective workers set up and close corporation and meet filing deadlines along with generate paychecks etc. The idea is that employees would also benefit as they could also write off the expenses of say driving to your company and such since they have their own corporation.

Mikeyy's picture

"I know a kid who's 29 who made $24K and paid the bloodsuckers $5K."

 

Now here's a comment that's gotten 13 upvotes.  Let's unpack this lie, shall we?  The federal tax rate for a single person who made $24k is calculated thusly:

 

$9,276—$37,650

$927.50 plus 15% of the amount over $9,276

 

So let's do the math:  24,000 - 9276 = 14,724 * 15% = $2208.60 + 927.50 = $3136.10

 

So, not 5 grand, but 3 grand or 405 less than what Bastiat said.

 

For skeptics, ZH'ers sure believe a bunch of crap. 

steelhead23's picture

Well, we should change that.  Those slackers who earn their income from capital gains should have the highest tax rate, while those who actually work should pay the least.  Yes, I am talking about you.