47% of Americans pay zero federal tax

8,756 Views | 144 Replies | Last: 8 days ago by Cibalo
taxpreparer
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LOYAL AG said:

schmellba99 said:

LOYAL AG said:

Great idea that will result in the republicans losing every election forever. My company handles all things financial for a lot of small owners and I've learned two things. Entrepreneurs want to keep their money as long as possible and their employees want the largest refund they can get by paying in as much as possible throughout the year. The vast majority of Americans aren't capable of saving for their tax bill. As much as I love the idea because I'm the entrepreneur in the above it would be catastrophic for a huge portion of the country.
F that huge portion of the country then.

Part of being an adult is doing things you don't like and understanding that you don't live in a world where instant gratification is the rule.

I also think you are completely wrong on this with r's losing every election forever. If people really knew how much taxes they pay, they would be beyond pissed off. But they don't because those taxes are paid before they ever see them. Out of sight, out of mind. In most people's mind they simply don't exist because of how the system operates (by design).


Most people don't care about politics except in the run up to Election Day. What they do care about is their daily lives and having more money on payday will be great until they have to write a check next April with money they don't have. That will be blamed on Republicans. Trust me, it won't go well. I have A LOT of conversations about withholding and the overwhelming majority end with the employee wanting to make sure they don't owe anything next April. Nearly all of them.


Make them care. Do away with withholding and make tax day the day before election day. Tie them together and everyone will be thinking about which candidate do I want spending MY money.

Btw: withholding was created as a way to generate constant cash flow for the govt during WWII. It was supposed to be temporary.
Scoopen Skwert
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The top 1% pay 40% of the taxes. I don't think it's fair to tax them more. I am also definitely not one of them.
chjoak
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The underlying issue is the complexity of the tax system that allows individuals to get away with paying nothing. I see 3 solutions depending on one's view of federal taxes.....

1. Do away with the current tax code and have everyone pay a flat rate tax. Everyone pays the same rate, no deductions, no exceptions. If you pay no tax (ie you have no job and/or do cash work only) you do not get to vote.

2. Do away with income tax and shift to a consumption based tax (federal sales tax).

3. Do away with federal taxation entirely. House creates an annual budget (after DOGE is done), Senate votes to approve. Once approved, each state is responsible for their share of the budget proportional to that state's EC votes (ie CA is responsible for largest share, then TX, etc.....). Up to each state to determine how they want to collect their share.

#1 & 2 still have "loopholes" to prevent paying tax but you have to try a little harder to completely avoid and with #1 you take away a right if they opt to not participate.

#3 would be the most complicated to install and some states would ultimately have issues but it would instantly require the fed to balance the budget and would eventually balance out the country from a population density perspective as states start putting in more effort to draw companies/citizens to their state in order to increase revenue. Right now I think many states DGAF because they now the feds will send them bailouts.
taxpreparer
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HarleySpoon said:

This thread is bizarre to me. Focus should be on getting the 53% that don't pay income tax to start having some skin in the game. Otherwise, they will continue to just vote to take their neighbors' property.

However, this thread seems to be more focused on the 47% that already have skin in the game.


A portion of that 53% actually has taxes withheld from paychecks, but qualifies for EITC. Those of is who have prepared their tax returns, and actually care about our clients, counsel them to cut their withholding instead of letting the govt hold them. Clients that used the IRS as a savings account drove me crazy.
ttu_85
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schmellba99 said:

ttu_85 said:

Even with all these taxes we have a deficit of $36T. That is the greatest danger facing our republic. I hate paying taxes too. But even if we cut spending this millstone is still tied to our necks.

Realistically how do we solve this problem ? And no tariffs wont remotely do the job.
Cut spending down to only constitutionally allowed federal needs
Draft and ratify an amendment to the Constitution that requires a balanced* budget
Criminally penalize Congress when they fail to pass a balanced* budget


*Balanced Budget means a budget that has zero reliance on borrowing money and is a function strictly of actual tax revenue. Budget should be an average of the last 5 years of tax receipts x .85.
Agreed with all of this back in 1983. It was proposed and ignored and here we are with a debt to GDP ratio @ 36T/25T with a value of 140% generally being thought of as life threatening for a nation.

Great idea! to bad it wasn't implemented.; kinda like a healthy diet. But when you eat greasy steaks and burgers everyday for 40 years, treatment options get tough to implement.

Even if you implemented this now, we are so far in the hole, it'd be to little to late.

No idea how to get out of this hole. You'd have to greatly increase GDP and increase gov revenues at even a greater rate before the debt bomb goes off. To bad these are counter acting forces. Kinda like matter and anti-matter.
LOYAL AG
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taxpreparer said:

LOYAL AG said:

schmellba99 said:

LOYAL AG said:

Great idea that will result in the republicans losing every election forever. My company handles all things financial for a lot of small owners and I've learned two things. Entrepreneurs want to keep their money as long as possible and their employees want the largest refund they can get by paying in as much as possible throughout the year. The vast majority of Americans aren't capable of saving for their tax bill. As much as I love the idea because I'm the entrepreneur in the above it would be catastrophic for a huge portion of the country.
F that huge portion of the country then.

Part of being an adult is doing things you don't like and understanding that you don't live in a world where instant gratification is the rule.

I also think you are completely wrong on this with r's losing every election forever. If people really knew how much taxes they pay, they would be beyond pissed off. But they don't because those taxes are paid before they ever see them. Out of sight, out of mind. In most people's mind they simply don't exist because of how the system operates (by design).


Most people don't care about politics except in the run up to Election Day. What they do care about is their daily lives and having more money on payday will be great until they have to write a check next April with money they don't have. That will be blamed on Republicans. Trust me, it won't go well. I have A LOT of conversations about withholding and the overwhelming majority end with the employee wanting to make sure they don't owe anything next April. Nearly all of them.


Make them care. Do away with withholding and make tax day the day before election day. Tie them together and everyone will be thinking about which candidate do I want spending MY money.

Btw: withholding was created as a way to generate constant cash flow for the govt during WWII. It was supposed to be temporary.


Agree on both but I assume you've had the same conversations I have over your career. You know how important that refund is to people. They're going to care that they're writing a big check instead of getting a big deposit. People much prefer loaning the government money than owing the government money. I think the 16th should be repealed and I completely get the history and purpose of paycheck withholding. I'm just saying people are going to me mad at the end result far more than they'll be happy about the day to day benefit.
A fearful society is a compliant society. That's why Democrats and criminals prefer their victims to be unarmed. Gun Control is not about guns, it's about control.
Tea Party
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Highway6 said:

cslifer said:

Make it illegal for employers to do payroll deductions? Hard pass, we don't need more laws.
Yes, and the fact people would not set aside the money to pay later, and end up in hot water with the IRS. What a mess
This is a good thing. Not the bad thing you think it is.

Yes, some would not set aside money and be in a pickle the first go around, but they would ideally learn their lesson that the IRS is money grubbing thieves and therefore change their voting tendencies. Or they would continue to be a negative drain on society as it relates to this, in which case we shouldn't pander to the lowest members of society, in my opinion.
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oh no
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that is how socialism wins.

they create a more government-dependent free handout seeking welfare state populace with exorbitant taxes that make the middle class disappear.

when that's not enough, like for example when a populist movement against them arises and siphons millions of the working class vote they pretended to care about, they import millions more government-dependent free handout seeking welfare people with promises of a 'path to amnesty' and free stuff.

more and more people will keep voting for the big government free stuff to solve everyone's problems for them even though they are inefficient and ineffective at just about everything they do.

history keeps repeating itself and socialism keeps failing, but it's a vicious self-serving cycle. poor government-dependent people, brainwashed low IQ useful idiots, and the political elite keep it going.
Logos Stick
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cslifer said:

Make it illegal for employers to do payroll deductions? Hard pass, we don't need more laws.


Tax withholding via payroll deductions IS a law. So it would not be "more" laws.
taxpreparer
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chjoak said:

The underlying issue is the complexity of the tax system that allows individuals to get away with paying nothing. I see 3 solutions depending on one's view of federal taxes.....

1. Do away with the current tax code and have everyone pay a flat rate tax. Everyone pays the same rate, no deductions, no exceptions. If you pay no tax (ie you have no job and/or do cash work only) you do not get to vote.

2. Do away with income tax and shift to a consumption based tax (federal sales tax).

3. Do away with federal taxation entirely. House creates an annual budget (after DOGE is done), Senate votes to approve. Once approved, each state is responsible for their share of the budget proportional to that state's EC votes (ie CA is responsible for largest share, then TX, etc.....). Up to each state to determine how they want to collect their share.

#1 & 2 still have "loopholes" to prevent paying tax but you have to try a little harder to completely avoid and with #1 you take away a right if they opt to not participate.

#3 would be the most complicated to install and some states would ultimately have issues but it would instantly require the fed to balance the budget and would eventually balance out the country from a population density perspective as states start putting in more effort to draw companies/citizens to their state in order to increase revenue. Right now I think many states DGAF because they now the feds will send them bailouts.


I have posted the third option many times over several years. #3 has the added bonus of reversing the cash flow. Instead of the feds sending money to the states, the state will be sending it the feds. This should have the effect making our representatives more responsive to their constituents, and less likely to add pork spending to bills.
chjoak
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agree. entirely possible that I stole that idea from you. im pretty sure i first saw it on texags.
taxpreparer
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My conversations with tax clients had to do with the stupidity of purposefully getting large refunds. Most took it well.
jokershady
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rocky the dog said:

Quote:

Quote:

rocky the dog said:
That percentage is too low.

No one should be paying federal income taxes.

In other words, 100% of Americans should not be paying federal income taxes.



I agree, but until we reach that utopia, don't you think that everyone should have some skin in the game?


Sorry. I couldn't find the meme that reads "Up until 1913, no one paid income taxes and the country survived".

Edit for date correction.


chjoak
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taxpreparer said:



Make them care. Do away with withholding and make tax day the day before election day. Tie them together and everyone will be thinking about which candidate do I want spending MY money.

Btw: withholding was created as a way to generate constant cash flow for the govt during WWII. It was supposed to be temporary.
funny how everything the govt creates to be temporary ends up permanent.
Trajan88
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what I cannot stand is when people on social media, news comments when they say the "rich" need to pay their "fair share."

When ask these bleeding hearts what is "rich" and what is "fair share" ... they get ticked off and throw a tantrum... ultimately getting to the point of name calling.

But the reality is we taxpayers are the good guys/gals... we should be thanked, appreciated EVERY day... not vilified for expecting, demanding fiscal responsibility of Washington D.C.

TA-OP
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Rs have both the House and the Senate. If you're concerned about income tax stats, lobby your representation and tell them to do something.
Deputy Travis Junior
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ttu_85 said:

Even with all these taxes we have a deficit of $36T. That is the greatest danger facing our republic. I hate paying taxes too. But even if we cut spending this millstone is still tied to our necks.

Realistically how do we solve this problem ? And no tariffs wont remotely do the job.


1) DOGE needs to hit the DOD like a freight train. The waste in that department is sickening and really is large enough to move the needle. Related, the entire procurement process needs a bottom-up rebuild. Payment = cost + built-in markup is an awful, inefficient model that incentivizes companies to drive up costs, not to control them.
2) somebody needs to have the stones to scream at the public about entitlement reform. Our government's mouth has written check that its account can't cash and we have to have a reckoning.
DCPD158
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You should never get back more in a refund than you paid in taxes.
Company I-1, Ord-Ords '85 -12thFan and Websider-
Tom Fox
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taxpreparer said:

chjoak said:

The underlying issue is the complexity of the tax system that allows individuals to get away with paying nothing. I see 3 solutions depending on one's view of federal taxes.....

1. Do away with the current tax code and have everyone pay a flat rate tax. Everyone pays the same rate, no deductions, no exceptions. If you pay no tax (ie you have no job and/or do cash work only) you do not get to vote.

2. Do away with income tax and shift to a consumption based tax (federal sales tax).

3. Do away with federal taxation entirely. House creates an annual budget (after DOGE is done), Senate votes to approve. Once approved, each state is responsible for their share of the budget proportional to that state's EC votes (ie CA is responsible for largest share, then TX, etc.....). Up to each state to determine how they want to collect their share.

#1 & 2 still have "loopholes" to prevent paying tax but you have to try a little harder to completely avoid and with #1 you take away a right if they opt to not participate.

#3 would be the most complicated to install and some states would ultimately have issues but it would instantly require the fed to balance the budget and would eventually balance out the country from a population density perspective as states start putting in more effort to draw companies/citizens to their state in order to increase revenue. Right now I think many states DGAF because they now the feds will send them bailouts.


I have posted the third option many times over several years. #3 has the added bonus of reversing the cash flow. Instead of the feds sending money to the states, the state will be sending it the feds. This should have the effect making our representatives more responsive to their constituents, and less likely to add pork spending to bills.


I'm ok with one or three as long as everyone is paying the same effective rate. All of them are superior to the status quo.
oh no
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TA-OP said:

Rs have both the House and the Senate. If you're concerned about income tax stats, lobby your representation and tell them to do something.
Brilliant. I'm sure my email to Dan Crenshaw will motivate him to get the government to stop paying so much welfare to poors to keep them poor and lazy. I bet my taxes will go down any minute after that when more people work and pay taxes and less people suckle off government teet.
Kansas Kid
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I like the idea a friend has to go with a flat tax and no other taxes, no auto withholding and you pay your taxes owed at the election polling site right before you vote. Voting, or at least showing up, would be required.

I know it wouldn't work in practice but could you imagine if people wrote those checks before electing officials?
AJ02
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If you don't pay income taxes, you have no skin in the game. Therefore, you shouldn't be allowed to vote.
infinity ag
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AJ02 said:

If you don't pay income taxes, you have no skin in the game. Therefore, you shouldn't be allowed to vote.

Worst idea in the history of earth.

Do you think Homeless Howie cares about "skin in the game"? Dude is busy trying to sniff trash heaps for food. He probably lives under a bridge.

We cannot survive if we are not compassionate. That is what Jesus also teaches us. Below a certain income level, no income taxes. They need every dollar to survive.

The problem with this board is too much rich guy worship. People get rich for a variety of reasons. Some were probably rich to begin with (like Trump). Some are self made like Musk.

Tax free bracket, and then progressively it increases based on "ability to pay". If not my argument is "why should I pay $50k in taxes when John is just paying $5k? Are you penalizing me just because I am more successful than John?
HarleySpoon
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Im Gipper said:

Quote:

However, this thread seems to be more focused on the 47% that already have skin in the game.


The thread title says 47% have no skin in the game.
Thanks for making my point.
EskimoJoe
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Yukon Cornelius said:

Should end cap gains tax too


I bought it with money that was taxed
I paid property taxes on it
I paid sales tax on maintenance
I paid income tax on the money it earned every year
I paid capital gaines tax when I sold it

Yukon Cornelius
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Yep. We need a tax jubilee
schmellba99
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infinity ag said:

AJ02 said:

If you don't pay income taxes, you have no skin in the game. Therefore, you shouldn't be allowed to vote.

Worst idea in the history of earth.


Do you think Homeless Howie cares about "skin in the game"? Dude is busy trying to sniff trash heaps for food. He probably lives under a bridge.

We cannot survive if we are not compassionate. That is what Jesus also teaches us. Below a certain income level, no income taxes. They need every dollar to survive.

The problem with this board is too much rich guy worship. People get rich for a variety of reasons. Some were probably rich to begin with (like Trump). Some are self made like Musk.

Tax free bracket, and then progressively it increases based on "ability to pay". If not my argument is "why should I pay $50k in taxes when John is just paying $5k? Are you penalizing me just because I am more successful than John?
Tell the Founding Fathers that then. They seem to have thought it was a pretty good idea.

I don't worship any rich dude. I don't begrudge them for what they have managed to do. Your views on that are pretty....well, not smart. The majority of views on this board are simple - most of us are absolutely beyond tired of paying the bill with our time and our labor at cost to our selves and our family and our future because somebody else doesn't want to or because some politician thinks we should pay and they should not.

It is really a simple concept - your labor and time are worth your value and nobody should be able to come in and say "give me half of what you worked your ass off for because I said so".

Take your "ability to pay" and bury it with the rest of the wasted money from USAID, etc.
whytho987654
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The middle upper class carries the burden. The poor and rich don't pay, no political party has the hard workers best interests in mind
schmellba99
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chjoak said:

The underlying issue is the complexity of the tax system that allows individuals to get away with paying nothing. I see 3 solutions depending on one's view of federal taxes.....

1. Do away with the current tax code and have everyone pay a flat rate tax. Everyone pays the same rate, no deductions, no exceptions. If you pay no tax (ie you have no job and/or do cash work only) you do not get to vote.

2. Do away with income tax and shift to a consumption based tax (federal sales tax).

3. Do away with federal taxation entirely. House creates an annual budget (after DOGE is done), Senate votes to approve. Once approved, each state is responsible for their share of the budget proportional to that state's EC votes (ie CA is responsible for largest share, then TX, etc.....). Up to each state to determine how they want to collect their share.

#1 & 2 still have "loopholes" to prevent paying tax but you have to try a little harder to completely avoid and with #1 you take away a right if they opt to not participate.

#3 would be the most complicated to install and some states would ultimately have issues but it would instantly require the fed to balance the budget and would eventually balance out the country from a population density perspective as states start putting in more effort to draw companies/citizens to their state in order to increase revenue. Right now I think many states DGAF because they now the feds will send them bailouts.
That isn't a bug, it is the entire concept of the design.
Tom Fox
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infinity ag said:

AJ02 said:

If you don't pay income taxes, you have no skin in the game. Therefore, you shouldn't be allowed to vote.

Worst idea in the history of earth.

Do you think Homeless Howie cares about "skin in the game"? Dude is busy trying to sniff trash heaps for food. He probably lives under a bridge.

We cannot survive if we are not compassionate. That is what Jesus also teaches us. Below a certain income level, no income taxes. They need every dollar to survive.

The problem with this board is too much rich guy worship. People get rich for a variety of reasons. Some were probably rich to begin with (like Trump). Some are self made like Musk.

Tax free bracket, and then progressively it increases based on "ability to pay". If not my argument is "why should I pay $50k in taxes when John is just paying $5k? Are you penalizing me just because I am more successful than John?


We are already too compassionate. It is how we got in our entitlement predicament in the first place.

Everyone should pay the same net tax rate.

We should absolutely avoid our current representation without taxation situation. The founders were smarter than you.
Cibalo
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Start making people pay quarterly. There is already a system setup for this purpose. When you write that check it hurts. Start there and one of two things will happen. People will either get their spending under control and get pissed at how the government spends the money or you will see credit card debt go into chaos mode.
TheWoodlandsTxAg
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whytho987654 said:

The middle upper class carries the burden. The poor and rich don't pay, no political party has the hard workers best interests in mind
Republicans introduced the flat tax also known as the FairTax Act of 2023 in the last Congress when they just had control of the House.

All House Democrats opposed it vehemently.

https://www.congress.gov/bill/118th-congress/house-bill/25
Im Gipper
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Did that even get a committee vote?

I'm Gipper
schmellba99
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TheWoodlandsTxAg said:

whytho987654 said:

The middle upper class carries the burden. The poor and rich don't pay, no political party has the hard workers best interests in mind
Republicans introduced the flat tax also known as the FairTax Act of 2023 in the last Congress when they just had control of the House.

All House Democrats opposed it vehemently.

https://www.congress.gov/bill/118th-congress/house-bill/25
I'm in favor of a consumption tax over a flat tax. More people in the pool that way.

No matter what though, there is absolutely zero reason our federal tax code should be 300,000 pages and it is as cumbersome as it is to ensure you pay the correct amount.
chjoak
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I am 10000% aware
 
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