Myth: 47% of Americans pay no taxes. The notion that nearly half the population of pays no taxes is often repeated by Republican politicians and pundits. It was most famously popularized by Mitt Romney in a closed-door fundraiser that was caught on video by a caterer. Romney was sort-of right when he said 47% pay no income taxes, he meant federal income taxes. many more people pay state income taxes.
And they also pay other federal taxes and other state taxes. But his real point was that all those not paying federal income tax would vote Democratic. This is ridiculous. A lot of those people are old, and retired Americans tend to vote Republican.
His other main point was that such these non-tax-payers “believe they are victims” and who feel “entitled” to health care, food, and housing. Sure, there are some free-loaders. But 47% of Americans? Not even close.
Facts:
- The 47% statistic only refers to people who do not pay federal income taxes, not people who don’t pay taxes at all. Nearly everybody pays state taxes, such as sales tax.
- The number of people who don’t pay federal income taxes is actually 43% now, not 47%.
- Most people who don’t pay federal income tax do pay federal payroll taxes. Only 14.4% pay no federal taxes at all
- Of that 14.4% who pay no federal taxes, 9.7% are elderly, leaving only 4.7% who are working-age Americans paying no federal taxes
- Overall, people in the bottom 20% pay 19% of their income to taxes and people in the top 1% pay 33%
- Although the rich do pay higher taxes at the federal level, the poor pay more of their income to state taxes than the rich in every state.
To assess whether or not, as Romney claims, these non-income-tax payers “will vote for the president no matter what,” it’s helpful to look at a breakdown of who they are. According to 2011 data from the Tax Policy Center, more than half of the filing units not paying income taxes are those with incomes less than $16,812 per year. Nearly a third – 29.2 percent – of those paying no income taxes earn between $16,812 and $33,542, and 12.8 percent are those with incomes between $33,542 and $59,486. In other words, the poor are least likely to pay federal income taxes, but many middle-class families are also exempt. Smaller but significant numbers of the higher-income earners are also exempt: The same data shows that in 2011, 78,000 tax-filers with incomes between $211,000 and $533,000 paid no income taxes; 24,000 households with incomes of $533,000 to $2.2 million paid no income taxes, and 3,000 tax-filers with incomes above $2.2 million paid no income taxes.
Overall, according to the Tax Policy Center, “of the 38 million tax units made nontaxable by the addition of tax expenditures, 44 percent are moved off the tax rolls by elderly tax benefits and another 30 percent by credits for children and the working poor.”
Moreover, only 18.1 percent of American households paid neither federal income taxes nor payroll taxes in 2011, says the Tax Policy Center. Of that 18.1 percent, 10.3 percent were elderly and 6.9 percent were non-elderly households earning less than $20,000 year, which includes low-income families and students. About one in 20 is non-elderly with incomes over $20,000.
At least one of the demographics that is less likely to pay income taxes (or income and payroll taxes) tends to vote Republican: In 2008, voters 65 and older voted for Republican nominee John McCain over President Obama 53 percent to 45 percent, an eight-point margin. The latest CBS News/New York Times poll also shows Romney winning the support of these voters nationally: 53 percent of voters 65 and older support Romney and 38 percent support Mr. Obama.
Ripped Apart
