The 47 Percenters

Derek Thompson does the math on that sector of the country that allegedly goes untaxed:

The three most important qualifying statements about the 47 percent who pay no federal income tax are: (1) Paying no federal income tax, or FIT, is not the same as paying no taxes, since payroll taxes account for as much government revenue as FIT, and state and local taxes still exist; (2) the vast majority of those who don't pay FIT make less than $30,000 a year; (3) the reason the "47 percent" exists is not because some people are lazy free-riders, but because Congress, at the behest and prodding of the public, has larded the tax code with benefits and deductions that can wipe out a family's tax burden.


If you think the 47 Percent are getting away with free-riding, consider that they're mostly poor families making $20,000, which means they would have to work for 116 years at that wage just to make the average annual salary of someone in the top 1 percent. Stats like this make it easy to see why we have a progressive tax code -- albeit one where ETRs have fallen at every income level over the last 30 years. I think there is an interesting civic philosophy question about whether it's preferable that 47 percent of the country votes on issues of defense spending, education department policy and other functions of government that are funded by federal income taxes, while they only contribute to excise and payroll taxes. But that's a little outside my boundaries as a business writer.

Check out the whole post--as well as the rest of the series.