Breaking Down The 47%

November 16, 2011 — Leave a comment

The recent “Occupy Wall Street” protests have generated a large dissonance movement through the entire United States and other countries against the high-income bankers and investors at the top financial firms. They claim themselves as the 99% because they are the victims of the 1%’s excessively high payrolls. However, this movement has been countered with another movement, claiming that 53% pay federal income taxes while 47% do not. Thus, if there were more government spending, that 53% would be footing the bill while the 47% would be extracting the benefits.

47% seems alarmingly high and disconcerting because it appears taxpayers in America are few and far between. However, there is much more to the “47%” number that is not explained in this counter campaign. It is indeed true that 47% do not pay income taxes, however, that number is largely attributed to the lower income bracket of America. In fact, the majority of citizens who do not pay federal income taxes make less than $30,000 annually. Congress has introduced new benefits and deductions in the tax code so this percentage of people who make a limited income can be free of tax burden. The number translates to about 1/7th of country does not pay payroll income taxes or federal income taxes because of their deductions and benefits. However, that does not mean these people avoid paying state and local taxes. They are still required to allot a given amount based on income to their local governments.

The two primary tax credits that many citizens benefit from are the Earned Income Tax Credit (EITC) and the child tax credit. The EITC benefits low-income individuals and families who would be significantly burdened by the social-security tax and other federal taxes. Last year, over 26 million people received nearly $59 billion dollars in tax credit through EITC. Through this credit, 6.6 million people are no longer poverty stricken, which includes 3.3 million children. The child tax credit benefits low-income individuals and families with children as their dependents. The individual or family could have a credit of up to $1,000 for every child (17 years old and younger) living in the house.

Despite only 53% paying the full payroll and excise tax, 47% do not necessarily avoid paying taxes. They are given opportunities and benefits to accommodate their living situations to avoid becoming poverty-stricken. 100% of people still need to fill out federal income tax returns and apply for EITC and child tax credit in order to receive any benefits.

20120125-235004.jpg

No Comments

Be the first to start the conversation!

Add your $0.02

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s