Paying Taxes and Receiving Entitlements

How many of the 45% of American households that are currently NOT paying any federal income taxes, complain about the unfair burden of the American tax system, do you suppose?

Numbers are courtesy of the Wall Street Journal

The fraction of American households not paying federal income taxes has also grown—to an estimated 45% in 2010, from 39% five years ago, according to the Tax Policy Center, a nonpartisan research organization.

A little more than half don’t earn enough to be taxed; the rest take so many credits and deductions they don’t owe anything. Most still get hit with Medicare and Social Security payroll taxes, but 13% of all U.S. households pay neither federal income nor payroll taxes.

As recently as the early 1980s, about 30% of Americans lived in households in which an individual was receiving Social Security, subsidized housing, jobless benefits or other government-provided benefits. By the third quarter of 2008, 44% were, according to the most recent Census Bureau data.

That number has undoubtedly gone up, as the recession has hammered incomes. Some 41.3 million people were on food stamps as of June 2010, for instance, up 45% from June 2008. With unemployment high and federal jobless benefits now available for up to 99 weeks, 9.7 million unemployed workers were receiving checks in late August 2010, more than twice as many as the 4.2 million in August 2008.

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About angelgibson

I am a former big ad agency brand planner, running footloose and fancy-free through the streets of New York City. I read all those huge research reports that explain how and why consumers love or are indifferent to particular brands, the types of messaging that make them break out in night sweats, and the ONE thing you are not doing that your customers really wish you would. I read a lot of other stuff too. I write custom reports, design proprietary research, basically help my smart and fabulous clients become even more so.

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