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Subscribe to RSSBillionaire investor Warren Buffett caused quite a stir Monday when he called on Congress to start charging him and his super-rich friends more taxes.
On the other side of the spectrum are the nearly half of all American households — many of whom are poor and/or elderly — who aren't expected to have any federal income tax bill this year.
A new report from the Tax Policy Center estimates that 46 percent of American households will pay no federal income tax this year.
About half of those folks are basically exempt from federal income taxes because they are low-income and also may have large families, according to the Tax Policy Center, a project of the Urban Institute and Brookings Institution.
The other half are exempted because of other provisions in the tax code, including seniors who live off Social Security or people who were able to zero out their federal income tax liability with itemized deductions such as charitable donations, or tax code features such as the child tax credit.
Still, almost no one gets off completely tax free.
Roberton Williams, senior fellow with the Tax Policy Center, said more than half of those who pay no federal income tax are still on the hook for payroll taxes, which are used mainly to fund Social Security and Medicare.
In addition, most people end up paying sales taxes as well as federal excise taxes on gasoline, alcohol and other products.
"Almost everyone is going to pay a tax somewhere along the way," he said.
Williams said that the percentage of people who will pay no income taxes this year actually is expected to be slightly lower than in the past two years, when tax credits designed to stimulate the economy allowed even more people to zero out their federal income tax bill.
If the economy gets better, he expects a higher percentage of American households to pay federal income tax.
If Buffett gets his way, another change in the next few years will be that the rich pay more taxes.
The chairman of investment firm Berkshire Hathaway argued in The New York Times Monday that Congress needs to do more than just cut money from the federal budget; it also needs to add more to government coffers by raising taxes on the rich.
Buffett noted that his federal tax bill, including payroll taxes, came out to just 17.4 percent of his taxable income last year, a lower percentage than anyone else in his office.
Even at that low rate, however, his annual tax bill alone equalled more wealth than many Americans will see in a lifetime: $6,938,744.
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If we collected taxation on CORPORATIONS we would be very solid. If people really knew that 87% of ALL US CORPORATIONS pay ZERO (0) in taxes and the balance pay "on average" just 7%, you would see a greater outcry than we have to date. It has been published by the GAO that trillions of dollars in profit from the largest CORPORATIONS in the US got IRS refunds. Now, does that seem like something is drastically wrong? I think so. It is time for everyone top demand some changes. We are all living in a CORPOCRACY and not a DEMOCRACY. We might say that the Koch brothers are obtaining heir goal: "Steal the US from the people".
A report by the IRS, earlier this year stated that in 1950, tax revenue received by the IRS from business, was 27 percent of all taxes received. In 2010, the tax received from business was 8.9 percent of all taxes received. It will more then likely stay that way, until the Bush tax cuts are allowed to expire.
Lets stop the silliness! There is no such thing as a "corporate tax". Corporations are legal fictions. They can only do one of 3 things with money they bring in: (1) give it to its employees (the largest expense of any corp is payroll), (2) spend it on buying equipment, inventory, etc (from other corporations where the rest of us work, duh), or (3) give it to their shareholders (anyone who has an IRA, pension, 401k, etc.). Every dollar a corporation gives to the government in the form of a "tax" comes out of one of those three pockets. In other words, every dollar a corporation pays is a dollar taken from an employee or your retirement fund/investment or its a dollar less the corporations spend on stuff it needs to buy FROM OTHER COMPANIES.
There is no island in the Caribbean where corporations go when they retire. They are complete pass through entities so lets stop pretending a corporation has its own money that can be taxed.
the 46% that want pay taxes are out of work, or working at $7 a hour. i make 36000 a year on retirement and 4800 on soc sec and still pay 3800 in taxes. yes they should be limited to ceo salaries and compasation. banks need to be tamed and restricted more and profits taxed
James, minimum wage is more then $7.00 an hour and I believe jobs at fast food places pay around $10 and about $15 at Costco. I too am retired and have only social security but, I saved my money in a 401k which the company did not make enough profit to contribute.
There are a lot of people who do not report all their income like landscapers. I agree that a lot of CEO are over compensated. The banks were regulated and it worked, until congress changed what was set up back in 1929 to safe guard against what happen in the housing market. Most of the problem started when the banks were told to give loans to low income people who they knew did not have enough income to pay the loan. Our government is so incompetent dishonest and greedy. We need changes but, the politicians that are being elected by the people who are not paying taxes and want more welfare and something for nothing.
I think everyone agrees .... everyone wants fair.
Where we don't agree, is on what "fair" means. The poor are ignorant of difficulties of the affluent, they don't understand the troubles of managing the assets of success. The affluent are ignorant of the plight of the poor, they don't understand the troubles of getting by day by day, check to check. Neither wants to understand the other.
So what *IS* fair?? It obviously means that two people in the same income class should pay the same tax, yet we do not have this today with our quagmire of tax code.
If we listen to each other, rich and poor, no one is happy with the current tax code.
There is no incentive for the "poor" to elevate themselves if they "benefit " from any prosperous Nation without contributing. Human nature is to find a comfort zone balanced between effort required and desired comfort. Eccentric to some is squaller to others. However, instilling National Pride comes with a shared sacrifice (shared meaning across the full spectrum). With the piss poor voter turn-out this country endures, maybe ensuring that ALL citizen pay some Federal Tax ( obviously our TAX Code is wildly outdated) would instill some pride of ownership inducing participation in the electoral process. How many "poor" people don't vote because of fear things will change, or vote primarily for the one's that keep the handouts coming. As a Nation we need to be voting with pride and Patriotism from a position of ownership, not just because you happen to live here. "Poor" people have a voice too and unfortunately they have other "owners" advocating for their ownership interest which by not paying they do not have. I'm all for support and community but you have to participate in anything to reap it's rewards.
Simplify it all with a flat tax = no loopholes or deductions.
When the tax code is so complicated that you have to hire someone to file your taxes the code is too complicated. Also, when the corporate tax rate is 35% and a company the size of GE pays nothing and gets a refund, there is something really wrong!
I think a percentage across the board is fair. I think personal and corporate taxes should be set seperately and I don't think a VAT (federal sales tax) is appropriate. I think we should set these percentages to an agreeable level and then demand that government size itself to operate within the amount of money it recieves, sizing itself down appropriately to begin steadily paying down the debt.
If a corporation paid no taxes it would take the money it is now paying in taxes and give it to the only place it can give it - to its employees, shareholders or it would engage in more commerce (buy more stuff, equipment, supplies, etc.). And when it does this, the employees will pay more taxes (because they will make more), the investors/owners/shareholders would pay more taxes (because they will receive more), and more jobs would be created (because there would be more demand for more stuff).
Corporate taxes are just a way to fool you into thinking someone else is paying taxes; they aren't, its you (and me and everyone else).
It's bizarre that most of the Republican morons who claim that they're "taxed to death" actually pay no federal income tax at all. If they have even a low income, they probably pay "payroll taxes" (Social Security and Medicare), but that's a flat percentage which doesn't overburden the rich that they're so protective of. They might also have a deduction for health insurance and/or retirement, which is not a tax at all. They'd better hope there's never a tax on stupidity.
No income tax unless you make more then $400,000!
How can we do this is simply a higher sales tax that would cover Federal, State, and County. Why
should 46% of the population pay no income tax, and yet they are allowed to vote so they can elect officals who believe in socialism. The 46% are not paying any of the cost of the welfare programs. I could go into details on how welfare is killing our country and how to stop most of it, but this would turn into a novel. We must change this or America will be no better off then Greece.
Guys as long as republicians control the white house its never going to happen, This is why changed my party to get away from that party. The poor is going to keep footing the bill, and keep loosing more and more stuff designed to help them. I agree some things need to be fixed in the system like people who have beat the system to draw checks when they are just lazy and dont want to work and then spend the money on pills. States needs to go back and start inforcing clintons get off welfare program and put people to work who wants the free ride in the city government jobs, like janitors for hospitials, doing the court house jobs, all the town and city jobs we pay people to do should be for the people who want the checks for nothing. Insurance i dont like a lot of stuff in it, but we need it fixed. I pay over 6,000 a year on insurance that i never use through my work, It shouldnt be that much. Its spirling out of control and the republicians just want to give them the right to do as they please with the rates. Things need to be fixed and no one wants to tackle the stuff that needs fixed, they rather cut social security and cut medicare and the programs who help the eldery and the poor. The republicians are good at scaring people to believe in them, so now with this mitt romney if he gets office things will go back to where it was when Bush left office.
Buffet wants to pay more taxes no one is stopping him!!
His tax lawyers got him down to11% last year. The averace top 1% paid around 23%! Just how much do you think the rich are going to take before they pull up stakes and boogie.
The problem is 54% of the population are supporting the country, of course if we were not spending billions on wars and foreign aid we might have something for ourselves.
Flat tax is the way to go no tax loopholes or other excuses if you make X you pay X fair for all, period!!
I will never understand why our government doesn't make taxes easy. This dollar that you make... a___% goes to government! and be done with it! That way no one would get out of taxes have more deductables than someone else etc... the federal government could run itself on LAST years collected taxes and stop paying three times more than me for a pencil. have the government go to an office supply store and stop taking bogus inflamed closed bids.