That 47% Mirage

So now a lot of people (not a straw man) have this mistaken idea that 47% of Americans pay no taxes at all.  The links below are good analyses explaining why this isn’t true, and I’ve added my commentary as well.

1. What People Don’t Know About Federal Income Taxes – Bruce Bartlett again injects sanity into the tax discourse.  Basically, people confuse federal income tax with all the other taxes, such as payroll or state income, that we pay.  Because there are so many tax subsidies and federal income tax is a marginal tax, the actual tax burden is much lower than most people, especially Tea Partiers, realize.
2. About Those 47% Who Pay “No Taxes” – The Tax Policy Center is very clear that the 47% refers to people paying no federal income tax, a state of affairs that is much different than paying no taxes at all.  Only 14% of Americans did not pay payroll or federal income tax, and those people may have still paid property or local taxes. And very few people are exempt from the sales tax.
3. Taxes vs Income Taxes – Matt Yglesias gives the believers of this figure the benefit of the doubt because we pay our federal, state, and payroll taxes at the same time (with possible adjustments on April 15th).  So people see just taxes taken away and are not good at decomposing those taxes into their constituent domains.  Obviously, he’s right for the lay person, but pundits and journalists parroting this figure need to make people more aware of the true meaning of the number.
4. Yes, 47% of Households Owe No Taxes. Look Closer. David Leonhardt gets overshadowed by Andrew Ross Sorkin, but his pieces tend to be of a more rigorous quality.  The average household with a single earner grossing between $35,400 and $52,100 pays a 3% federal income tax.  Adding other taxes (gas, payroll, corporate), the family pays 14.2% of its income to the federal government.  And the point that no Republican will make: rich people pay a large share of total federal income taxes because they’re the only ones had made money the previous 30 years.  Raising taxes on the middle-class would be taking money from those who have little to spare because the economy has not been geared to reward them; taxes should only take more once you start earning more.