Tag Archives: class

Who Pays America’s Taxes?

Image by Chris Tolworthy via Flickr

This article is a Scholars Strategy Network Brief.

Download a PDF from SSN.


Alexander Hertel-Fernandez
Alexander Hertel-Fernandez studies Government, Social Policy, the Democratic Party, and the politics of federal tax policy at Harvard University.
Vanessa Williamson
Vanessa Williamson studies Government and Taxation at Harvard University.
Image by Ken Teegardin via Flickr

Image by Ken Teegardin via Flickr

“Almost half of all Americans pay no taxes!” That’s the claim bandied about in elections and overheated television talk-fests. It refers only to federal income taxes, from which various groups are exempt. But many other taxes are also collected at the federal, state, and local levels. When all kinds of taxes are added up, almost all Americans pay substantial amounts.  In fact, poor and middle-income people frequently fork over higher shares of their incomes than the very rich.

Federal Income and Payroll Taxes

The U.S. federal government relies on two big taxes collected from large numbers of Americans: the federal income tax and payroll taxes regularly deducted from wages and salaries to cover Social Security and Medicare benefits. Income and payroll taxes each contribute about 40% of federal revenues. Almost half of U.S. households currently do not owe federal income taxes, but over three-fifths of these “non-filers” are workers who contribute very substantial payroll taxes. For example, Americans making the lowest incomes pay nearly 9% of their wages in payroll taxes, about the same percentage as middle-income workers pay.

Only about 17% of American households pay neither income nor payroll taxes, because they are headed by people in special sub-groups:

  • Elderly men and women, who previously contributed payroll taxes during their working lives, living on their Social Security benefits.
  • Students or disabled individuals.
  • Workers unable to find jobs. During the recent recession, the numbers of long-term unemployed people not filing income tax returns went up.
  • Active-duty members of the U.S. military, who do not have to pay taxes on their combat pay and do not owe income tax after having been deployed. (more…)

Beyond Class War: Americans Want Government To Promote Equal Opportunity

This article is a Scholars Strategy Network Brief.

Download a PDF from SSN.


LarryJacobs
Lawrence R. Jacobs studies presidential and legislative politics, elections, voting behavior, policy, and American political history at the University of Minnesota.

Occupy Wall Street has put a public face on the backlash against growing inequality. As most Americans struggle to make ends meet, income and wealth at the very top continue to burgeon, in bad times as well as good. Although rag-tag protesters have been vilified, protests against the widest economic disparities in more than a century resonate with the wider public. For some time, the best research has documented shared American worries about inequality and broad support for steps to enhance opportunity. (more…)

The Prospects For Reducing Poverty Are Dismal—Unless America’s Leaders Change Course

Photo by David Shankbone via Flickr

This article is a Scholars Strategy Network Brief.

Download a PDF from SSN.


Sheldon Danziger
Sheldon Danziger studies poverty and public policy in the National Poverty Center and Gerald R. Ford School of Public Policy at the University of Michigan.

Not long ago, the U.S. Census Bureau delivered very bad news about poverty in the United States. In 2010, 15.1% of Americans had incomes below the poverty line—set at $22,113 for a family of four—and the poverty rate for 2011 will be even higher. For older people who remember that poverty fell to 11.1% back in 1973, it may seem puzzling that things have gotten so much worse. Rising poverty is not a recent development either. Things were getting worse well before the Great Recession of December 2007 through June 2009. Given the way the U.S. economy works in our era, sluggish growth, high levels of joblessness, and persistently high poverty are likely to persist for years—unless our political leaders change course and do more to help the poor and near-poor. (more…)