43% Pay NO Federal Income Tax - ARE YOU KIDDING ME??

[TerriDoodle 6]

[emphasis added by OP]

The Income Tax System is Broken

43 Percent Of Americans Pay No Federal Income Tax, A Sign That Something's Wrong, Writes Declan McCullagh

April 15, 2009 | by Declan McCullagh

(CBS) On April 15, don't be surprised if the line at your local post office is a bit shorter than usual. That's because your neighbors may not be paying any income taxes this year.

An astonishing 43.4 percent of Americans now pay zero or negative federal income taxes. The number of single or jointly-filing "taxpayers" - the word must be applied sparingly - who pay no taxes or receive government handouts has reached 65.6 million, out of a total of 151 million.

Those numbers come from an analysis published yesterday by the Tax Policy Center, a joint project of the Urban Institute and Brookings Institution. Neither is a low-tax or conservative advocacy group; the Urban Institute was created under the Johnson administration during the Great Society era, and it receives most of its funding from the federal government.

"You've got a larger and larger share of people paying less and less for the services provided by the federal government," says Roberton Williams, a senior fellow at the Tax Policy Center. "The concern is that the majority can say, 'Let's have more benefits, spend more,' if they're not paying for it. It's 'free.' That's not a good thing to have."

By historic standards, today's situation is an aberration. Between 1950 and 1990, the number of owe-no-money federal tax returns averaged 21 percent, dipping to 18 percent in 1986, according to Tax Foundation data. In the 1990s, the owe-no-money percentage hovered around 25 percent of taxpayers.

But then politicians began another round of tinkering with the tax code, adding reams of new pages to an already incomprehensible set of rules that even the guy overseeing the IRS can't seem to figure out.

Democrats wanted to lower taxes on the least affluent, while Republicans wanted to lower taxes on everyone. The result was bipartisan enthusiasm for tax credits aimed at everything from children (1997) and college students (1997) to hybrid cars (2005) and homebuyers (2009). Many of these credits dole out cash to people even if they report no income, making them mere government handouts.

"There's no difference at all in terms of the effects on the federal deficit," says Williams of the Tax Policy Center. "It's perfectly equivalent. It's just easier to say, 'I cut your taxes' as opposed to 'I created a new federal program to send money to people.'"

I'm talking here about federal income taxes, not other taxes like Social Security, Medicare, state income taxes, sales taxes, or car registration taxes, some of which are extracted through payroll deductions. The owe-no-money crowd tends to get hit by at least some of those.

The perils of today's situation should be obvious. The United States is close to a tipping point - where most people can skip the post office run on April 15 to mail a check because they're expecting one from the government instead.

"It is somewhat odd that you have a decreasing number of folks paying into the federal income tax system, a decreasing number of folks who have a stake in what the government pays for," says Matt Moon of the non-partisan Tax Foundation in Washington, D.C.

It then becomes tempting to vote for politicians promising more and more handouts, paid for by money forcibly extracted from an ever-shrinking number of their neighbors. In addition to being immoral, it's poor public policy: people who pay no taxes but nevertheless get benefits are less likely to be careful overseers of their elected representatives.

"At some point people become less and less invested in making sure their government is accountable and frugal," says Peter Sepp, vice president for policy and communications at the National Taxpayers Union, a lower-tax advocacy group. "If you pay very little for getting all kinds of government benefits, you might view those programs as a bargain, even though they may waste tens of billions of dollars a year."

As a candidate, President Obama promised still more tax credits, including ones aimed at child care, "clean cars," and savings accounts. As the Wall Street Journal explained at the time: "You can receive these checks even if you have no income-tax liability. In other words, they are an income transfer - a federal check - from taxpayers to nontaxpayers. Once upon a time we called this 'welfare,' or in George McGovern's 1972 campaign a 'Demogrant.'"

A recession, the stimulus, and innumerable bailouts have placed Mr. Obama's plans on hold. But the expiration of the Bush tax cuts at midnight on December 31, 2010 will renew interest in a tax law rewrite.

That will be an opportunity to gut the current system and replace it with something simpler and fairer. After all, if government is important enough to force most of us to work until April 13 to pay its bills, why shouldn't everyone share the pain?

Declan McCullagh is the chief political correspondent for CNET and a CBS News EconWatch contributor. Previously, he was Wired's Washington bureau chief and a reporter for Time.com and Time magazine in Washington, D.C. He has taught journalism, public policy, and First Amendment law. He is an occasional programmer, avid analog and digital photographer, and lives with his wife in the San Francisco Bay area.

By Delcan McCullagh

© MMIX, CBS Interactive Inc. All Rights Reserved.

[BJean 16]

I'm curious. Why are people becoming so furious about this now, under Obama's watch? Nothing has changed and I didn't hear all this ranting and raving when Bush was in office.

Interestingly, Obama proposes that ordinary Americans' taxes not be increased. Yet those seem to be the people who are claiming that he is being unfair. Who do you think is inciting this riot?

The wealthy people, like Rupert Murdoch, are doing a seroius number on us. They're actually making us feel sorry for the ultra-billionaires by using things like this to get us all riled up.

I'm all for honesty and openness and transparency in government. But some of the stuff people are using to get people on their bandwagon is as much of a distraction as bellyaching about the illegal alien problem - as if it were something new that we didn't already know about.

[TerriDoodle 6]

Yes, this is a new precedent!

By historic standards, today's situation is an aberration. Between 1950 and 1990, the number of owe-no-money federal tax returns averaged 21 percent, dipping to 18 percent in 1986, according to Tax Foundation data. In the 1990s, the owe-no-money percentage hovered around 25 percent of taxpayers.

And before this latest report I saw that it was 33% in 2006.

and now for 2008...43%??? 43%?!!??!?

Interestingly, Obama proposes that ordinary Americans' taxes not be increased. Yet those seem to be the people who are claiming that he is being unfair. Who do you think is inciting this riot?

"Ordinary" Americans will most definitely be feeling the pinch of increased taxes in the prices that they pay for energy and consumer goods. No doubt about it.

...as if it were something new that we didn't already know about.

No, it's not anything new! We have just absolutely reached our threshhold of tolerance. I'm no Rupert Murdoch or, as DHS might call me, a "right wing extremist" :wub: ....I am just your next door neighbor! I'm not fingering Obama -- I"m pissed at every single one of those DC beaurocrats and I HAVE HAD ENOUGH! They've all made it clear that they are NOT listening to us!

Immigration? They ignore us.

Tax Reform? They ignore us.

Term limits? They ignore us.

Iraq war? They ignore us.

Fiscal restraint? They ignore us.

No Bailouts? They ignore us.

You-Name-It? Guess what.... they ignore us!

[OneHotMama 0]

I just want to say that I am not rich or white (not that there's anything wrong with that:tt2:) and I too am completely pissed off at the government and what they are doing. EVERY SINGLE ONE OF THEM. I suppose according to the DHS document I should probably incite hatred against myself! LOL Stop with the same sorry story "blame the rich, blame the rich", just get off your a$$ and try a little personal responsibility!!

BTW, did anybody notice the section in the DHS document that said "Rightwing extremist chatter on the Internet continues to focus on the economy, the perceived loss of U.S. jobs in the manufacturing and construction sectors, and home foreclosures.” I guess all the job loss numbers that they've been throwing at us to keep us "in fear" aren't real? Somebody should tell BO to take these topics out of his current campaign speeches then. Then again, he has the right to say them, apparently we just can't "chatter" about it online after if we disagree. I guess dissenting opinion is the new terrorism.

[BJean 16]

Yeah Jack I agree about government officials who don't get their tax returns right. Anyone can make a mistake, but those are pretty unforgivable by people who hold public offices.

Anybody want to calculate how many people aren't paying their taxes because they simply refuse to pay taxes? Like the right wing extremists?

[BJean 16]

Jack, surely you aren't suggesting that "mistakes" on one's tax returns are limited to the current administration officials? IF so, where were you when all of the inquiries into similar "mistakes" of past administration officials and Congressmen were done?

[TerriDoodle 6]

Well, gee whiz.... seems to me that ALL of these issues would go away if they'd simply REFORM THE TAX CODE!! Hello?? Everyone's tax return would be about 6 lines long.

SIMPLIFY!!!

Educate yourself!!! Americans For Fair Taxation: Americans For Fair Taxation

[plain 12]

I'm not fingering Obama -- I"m pissed at every single one of those DC beaurocrats and I HAVE HAD ENOUGH! They've all made it clear that they are NOT listening to us!

I think that's what soooo many don't get. They want to make this into a republican vs. democrat thing. It ain't!! This is something different....something both parties have been guilty of.

Anybody want to calculate how many people aren't paying their taxes because they simply refuse to pay taxes? Like the right wing extremists?

BJean, those people end up in jail. NOBODY gets a free ride on the taxes, conservative or liberal.

Well, gee whiz.... seems to me that ALL of these issues would go away if they'd simply REFORM THE TAX CODE!! Hello?? Everyone's tax return would be about 6 lines long.

Ain't that the truth? I heard on TV the current tax code is 3.5 million words long. It literally changes faster than anybody can keep up with it. During the Bush administration alone, the tax code averaged more than 1 change / day.

[TerriDoodle 6]

The tax code is 70,000+ pages....and growing daily.

[BethFromVA 5]

I'm curious. Why are people becoming so furious about this now, under Obama's watch?

Because before the Bama's watch, it was "only" 32 percent. And yes, I was pissed as hell then too.

[BethFromVA 5]

Yes, this is a new precedent!

And before this latest report I saw that it was 33% in 2006.

and now for 2008...43%??? 43%?!!??!?

Once it hits 51%, we're f*cked. All these losers will make sure to vote in other losers who will guarantee them somebody else's money.

"Ordinary" Americans will most definitely be feeling the pinch of increased taxes in the prices that they pay for energy and consumer goods. No doubt about it.

Already happening. Anybody drink? Smoke? Use a cell or house phone? Rental car? Hotel? Power? Gasoline?

No, it's not anything new! We have just absolutely reached our threshhold of tolerance. I'm no Rupert Murdoch or, as DHS might call me, a "right wing extremist" ....I am just your next door neighbor! I'm not fingering Obama -- I"m pissed at every single one of those DC beaurocrats and I HAVE HAD ENOUGH! They've all made it clear that they are NOT listening to us!

Immigration? They ignore us.

Tax Reform? They ignore us.

Term limits? They ignore us.

Iraq war? They ignore us.

Fiscal restraint? They ignore us.

No Bailouts? They ignore us.

You-Name-It? Guess what.... they ignore us!

Sing it, sister! They ALL need to go, whether they have a D or an R behind their names!! :thumbup:

[BethFromVA 5]

I was AT the DC Tea Party today, and I can assure those on the left that many of their compatriots were there. They made SURE people and the news knew that they were democrats who were disgusted with all the spending insanity.

By the way, so much for non-leftist reporting, eh? :sneaky: She can't even PRETEND to hide her disdain. What a cow.

CNN Reporter at Chicago Tea Party: It's "Anti-CNN Since This is Highly Promoted By the Right-Wing, Conservative Network Fox" - mediabistro.com: TVNewser

[MacMadame 81]

We didn't pay any income tax in 2006. I don't think that's a sign the system is broken. I had started my own business and our yearly income was half what a family of 4 needs to survive in our area that year.

[pattygreen 5]

I'm curious. Why are people becoming so furious about this now, under Obama's watch? Nothing has changed and I didn't hear all this ranting and raving when Bush was in office.

Interestingly, Obama proposes that ordinary Americans' taxes not be increased. Yet those seem to be the people who are claiming that he is being unfair. Who do you think is inciting this riot?

The wealthy people, like Rupert Murdoch, are doing a seroius number on us. They're actually making us feel sorry for the ultra-billionaires by using things like this to get us all riled up.

I'm all for honesty and openness and transparency in government. But some of the stuff people are using to get people on their bandwagon is as much of a distraction as bellyaching about the illegal alien problem - as if it were something new that we didn't already know about.

Bjean, Is Obama your 'Hero' or something? "Don't pick on my Idol, cause noone picked on yours when he was in office."(whine) It's really not about who is the culprit, Obama or Bush. I believe it's about government's crazy spending of money they don't have. Where are they going to get it? I know you've said that Obama's not raising your taxes, etc. But in reality, he's putting out there the means to spend frivilously on all kinds of unnecessary crap. (and the key word here is unnecessary)The spending he is allowing is over the top. The government has been dishonest and corrupt for quite some time now, and the people have just let it go and ignored it for soooo long and finally (sorry it's being done on your kings watch) they are fed up and getting together and protesting to let them know it. Why weren't you at the tea parties in your area? Do you admire all of this government interference in your life? Do you like the government spending us into oblivion? Do you desire this gradual move towards socialism? The only thing I can think of is that Obama was your man and no matter what gets done on his term, you're going to stand by him through good or bad.

[TerriDoodle 6]

You think that CNN video is bad journalism?? HA!! MSNBC goes into the Hall of Fame for this one! Listen carefully for the multitude of oral sex (yes, oral sex) metaphors and references...you may have to watch more than once to catch them all. It's unbelievable... just proves how ridiculous this network is all the way around (explains why they're at the very bottom of the ratings as well):

Video - Schuster: If You're Planning Tea Bagging Across The Country, 'You're