# Should Everyone who is Able Pay Federal Income Tax?

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Mentor

## Main Question or Discussion Point

I'd like to gain some clarity on part of the issue with the Romney "47%" statement. There are a lot of "yeah, but...." responses to it, but few people who give such responses ever make it clear on this point:

Should everyone who is not elderly, poor, a student, or in some other hardship pay federal income tax?

For the record, according to this CNN graphic, it is roughly 28% of the population that is currently able, by that criteria, who does not pay federal income tax (though it includes an imprecise poverty measure): http://money.cnn.com/galleries/2012/pf/taxes/1203/gallery.election.moneymag/index.html?hpt=hp_t1

For the "other", what I'm looking for is another criteria for deciding who should and shouldn't pay federal income tax, For example:
-Anyone over twice the poverty line.
-Only the rich.

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Mentor
By poor, I mean using the dictionary definition for poverty of lacking in material possessions and essential sustinence. http://dictionary.reference.com/browse/poverty

The US government attempts to adhere to this definition and sets a poverty threshold accordingly. Currently, the US poverty rate is 15%: http://en.wikipedia.org/wiki/Poverty_in_the_United_States
If we can expand the definition of "poor" to the bottom 23% it would match up with the graphic found here:

This website has another version of that graphic, breaking down the reasons the 47% don't pay taxes. So far, I've seen 3 definitions of poor. Your link specifies people making under 20k per year, which makes up 6.9% of the population. You say 15%, which is the government definition of poverty. The NPR link says 23% don't pay because of "low income."

So, depending on the definition of "poor or other financial hardship" used, I'd argue that our current situation reflects a "Yes" answer to your question.

Realistically, though, raising taxes on the people that fall in that grey area (say, making between 25k-35k per year), won't raise much revenue for the government as a percentage of GDP, but it will create a hardship on the middle class which is already riddled with hardships. I don't think raising taxes on the lower middle class will get anybody elected, either.

Evo
Mentor
I would vote that everyone who is not elderly, poor, a student, or in some other hardship pay federal income tax of the same percent. That someone like Romney with an annual income of ~$27 million would not be able to get away with only paying ~13-15% tax. I would vote that everyone who is not elderly, poor, a student, or in some other hardship pay federal income tax of the same percent. That someone like Romney with an annual income of ~$27 million would not be able to get away with only paying ~13-15% tax.
This is dangerous, because this would be a massive tax increase on many members of the middle class, a tax decrease on some members of the upper middle class. It would obviously need to be higher than 15% to fit your criteria, so let's say it's 20%. That means the lower middle class person paying about 10% in income taxes has their tax bill double. The upper middle class person paying 22% gets a tax cut, and the super rich get an increase.

I don't think the extra money from the super rich is worth raising taxes on the lower middle class, personally.

I'd be interested in a form of Tobin Tax, where trades of financial instruments are taxed at a small rate, something like 0.1% per trade, which would completely pay for eliminating all income taxes for dollars earned under 100k per year. (I'm sorry I don't have a source for that handy, these numbers were true in 2004 when a local politican was running on this, and I had seen the report at that time. The numbers may be off now. Here's a BBC link about the tax: http://www.bbc.co.uk/news/business-15555812 )

Mentor
If we can expand the definition of "poor" to the bottom 23% it would match up with the graphic found here:

No, it wouldn't. "Low income" in that graphic is based on tax policy, not the poverty threshold. It just means low enough that they don't have to pay taxes. That's the group I'm referring to: too low by current policy to pay income tax, but not actually considered "poor" by government standards.
This website has another version of that graphic, breaking down the reasons the 47% don't pay taxes. So far, I've seen 3 definitions of poor. Your link specifies people making under 20k per year, which makes up 6.9% of the population.
Not exactly: it doesn't differentiate the fraction of the elderly that are poor. But you're right (and I acknowledged above) that it is an imperfect threshold (does not exactly match the official line.
You say 15%, which is the government definition of poverty. The NPR link says 23% don't pay because of "low income."

Still: NPR's 23% would appear to be more accurate than CNN's 28%.
As said above, you misunderstood what that meant.
So, depending on the definition of "poor or other financial hardship" used, I'd argue that our current situation reflects a "Yes" answer to your question.
So you're purposely sabotaging the poll? I gave you the definition and the threshold and you're choosing a different threshold. That's trolling.

Mentor
I would vote that everyone who is not elderly, poor, a student, or in some other hardship pay federal income tax of the same percent. That someone like Romney with an annual income of ~$27 million would not be able to get away with only paying ~13-15% tax. Fair enough, thanks for answering. I'm delaying responding to implications for a while, until more votes are corrected (or the thread gets flooded with responses). For clarity, the "Romney's" of the US are counted among that group in the stats I've listed. That's trolling. First of all, at no point did I sabotage the poll; I didn't even vote. Second, I have chosen no threshold, I was merely pointing out that your definition is not the only possible definition. Thirdly, it is against the rules to accuse members of trolling, particularly when I think my posts have been fairly reasonable and even had a link to NPR, which most would agree is a credible source. Mentor First of all, at no point did I sabotage the poll; I didn't even vote. Second, I have chosen no threshold, I was merely pointing out that your definition is not the only possible definition. Thirdly, it is against the rules to accuse members of trolling, particularly when I think my posts have been fairly reasonable and even had a link to NPR, which most would agree is a credible source. If you just misunderstood what NPR was saying, fine -- do you see that you were wrong in your description of NPR's stat? This post does not make it clear that you see your error. If you didn't vote yet, great: you incorrectly described a "yes" vote. I just hope no one else voted based on your incorrect description. Astronuc Staff Emeritus Science Advisor I think " who is able" should be qualified. There is already an attempt to qualify that in the tax code - rightly or wrongly. To put things into perspective - Yes, 47% of Households Owe No Taxes. Look Closer (April 13, 2010). http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html Leonhardt points out that those who don't pay 'income' tax, do pay other taxes, which are actually at higher rates as a percentage of their income than those who can afford to pay 'income' tax. Many who don't pay income tax can still pay payroll taxes. Folks still pay state income taxes and various excise taxes. Also, those who cannot afford to maintain bank accounts and who must pay bills, e.g., utility, etc, must pay fees that can amount to several percent (2-5% depending) of their income. Those fees go into the pockets of the owners of those establishments (probably middle to upper middle income). I also seem to remember a statistic that a portion of those receiving EITC are military families - typically the families of enlisted personnel (specialists, privates, corporals, sergeants). Last edited: Mentor There is already an attempt to qualify that in the tax code - rightly or wrongly. While that's true, I would think a government agency specifically tasked with defining and measuring "poverty" would provide a more reliable definition of "poor" than politicians writing tax policy, no? Politicians aren't necessarily looking at the concept of poverty while creating their deductions. That said, it is fine to disagree with the idea that "poverty" should be the cutoff. I gave a sample "other" answer in the OP, of twice the poverty threshold. To put things into perspective - Yes, 47% of Households Owe No Taxes. Look Closer (April 13, 2010). http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html Leonhardt points out that those who don't pay 'income' tax, do pay other taxes, which are actually at higher rates as a percentage of their income than those who can afford to pay 'income' tax. Many who don't pay income tax can still pay payroll taxes. While that's true and fine, I find it very odd to single-out the federal income tax as being OK not to pay or saying that paying another tax negates the fact that many don't pay this one. I don't think my local tax collector would find it a compelling argument if I said "I'm not going to pay this tax, but don't worry, I pay a lot to Social Security, so I pay my share!" It also doesn't make sense to me to say that the Social Security's tax is too regressive, so lets make the federal income tax more progressive. Point being, if Social Security's tax structure is bad, that's a discussion for another thread -- fix it by fixing it, not by changing something else. I'd like to know what people think about the federal income tax itself. If you just misunderstood what NPR was saying, fine -- do you see that you were wrong in your description of NPR's stat? This post does not make it clear that you see your error. If you didn't vote yet, great: you incorrectly described a "yes" vote. I just hope no one else voted based on your incorrect description. I think you've completely missed my point. I did not describe a "yes" vote at all in any sort of definitive terms. I just stated that if people define "poor or other financial hardship" as those currently excepted by the tax code, then "yes" and "no, what we have is fine" are the same. This is the point that Astronuc described better than I did. In the limit that "able to pay" goes to "what the tax code says," your first two vote options are the same. I don't have any particular stance on the topic, except maybe that Tobin Tax I talked about above. Mentor I think you've completely missed my point. I did not describe a "yes" vote at all in any sort of definitive terms. You said: ...I'd argue that our current situation reflects a "Yes" answer to your question. Bottom line: It is my poll. I get to decide what a "yes" vote means, not you. If the distribution of income and wealth were more equal, I would support this. But given that the United States is afflicted by such high inequality, I can't in good conscience support it. The current taxes on the poor/middle class are pretty fair. I wouldn't reduce them or increase them. But I would vastly increase the tax on the upper class in order to facilitate some transfer of wealth from the top to the bottom. Once people have living wages and other comforts of a civilized society, I would be more willing to support everyone paying taxes. And since everyone's in such a tizzy over what a "yes" or "no" vote is, I think I'll just not participate in the actual poll. You said: Bottom line: It is my poll. I get to decide what a "yes" vote means, not you. Wow, russ, that's low. You cut my sentence off in the middle and only posted the second half out of context. And this is from the author of the "political spin" thread. Let me post the whole thing. So, depending on the definition of "poor or other financial hardship" used, I'd argue that our current situation reflects a "Yes" answer to your question. You're an intelligent man, russ, I know you can comprehend that full sentence. The point is, words don't have absolute meaning. When you say "able to pay," everybody has their own concept of what "able to pay" means. It is not up to you to decide what meaning others take from your words. Communication does not work that way. In a very broad way, I think everybody can agree that everybody "able to pay" taxes should, though everybody has their own threshold as to what "able to pay" means. Even if you "get to decide" what able to pay means in the context of this poll, I suspect phrasing it that way will still have people voting with their own opinion of what "able to pay" means. lisab Staff Emeritus Science Advisor Gold Member Yes, I think everyone should pay some amount - that's fair. I think everyone should pay a fair share. I understand the attraction to a flat tax, but I bet most people who are for it have never been to-the-bone poor. So I don't think a flat tax is fair to very low wage earners, but they should pay something, even if it's just a token amount. Mentor Wow, russ, that's low. You cut my sentence off in the middle and only posted the second half out of context. The rest does not help you: So, depending on the definition of "poor or other financial hardship" used... There was no "depending": you specified a specific definition and called it a "yes" and I specified a different definition: there is no ambiguity for a "depending" here. When you say "able to pay," everybody has their own concept of what "able to pay" means. It is not up to you to decide what meaning others take from your words. Communication does not work that way. Wow indeed. It also appears you also don't understand what "communication" is -- which is a pretty big problem. No matter how you try to twist my words, you're not inside my head. A person who reads my post and makes an honest effort to understand what I am saying will understand it. Even if they don't, it doesn't change my intent. Your disagreement about what "able to pay" means does not change my intent for the poll. The fact that you asked for a clarification and received it, but still won't stop pressing the point just makes it worse. I suspect from your posting that you are not yet in the professional world, where precision of wording matters. If you sign a contract and then later say you disagree with the way a word that is defined in the contract, you're out of luck. No, words do not have 100% agreed upon definitions; Definitions are a matter of consensus and specification. I've specified my definition -- heck, I even gave you an alternative choice if you didn't like it. Next time you go to a sandwich shop, ask for a tuna sandwich, then complain that it doesn't have turkey in it because by your definition of "tuna sandwich", it should include turkey. See how that works out for you. In a very broad way, I think everybody can agree that everybody "able to pay" taxes should, though everybody has their own threshold as to what "able to pay" means. Not necessarily. We have a current tax structure that enables a handful of people with extremely high incomes/net worths' to pay no federal income tax. *Someone* wrote the law enabling that. Even if you "get to decide" what able to pay means in the context of this poll, I suspect phrasing it that way will still have people voting with their own opinion of what "able to pay" means. If people don't read the poll before responding, it isn't my fault, but if you have a suggestion about how to more objectively title this thread, I'm all ears. Last edited: I would say yes, but with a proviso- I would count all taxes paid to the federal government (including payroll taxes) as 'federal taxes' and count all payouts (social security/medicare,etc) as federal payouts. And I wouldn't set an income threshhold, I would set an income+dependents threshhold- after all someone making 30k a year with 6 kids is in a different situation than someone making 30k a year with no kids. I think my system would look much like the current system. Also- its weird to me that the republican party cut taxes as a poverty fighting measure and now Romney turns around and complains that a lot of people don't pay federal income of course they don't, Reagan and Bush cut their taxes down to nothing! BobG Science Advisor Homework Helper Yes, I think everyone should pay some amount - that's fair. I think everyone should pay a fair share. I understand the attraction to a flat tax, but I bet most people who are for it have never been to-the-bone poor. So I don't think a flat tax is fair to very low wage earners, but they should pay something, even if it's just a token amount. So, in essence, earned income credit should be terminated? For earners with 3+ children with incomes between 12.5k and 16.5k, that would be a$5000+ tax increase.

Not saying right or wrong, but just saying it's impossible to just charge a token amount relative to today's laws.

If people don't read the poll before responding, it isn't my fault, but if you have a suggestion about how to more objectively title this thread, I'm all ears.
How about "Should everybody earning above the poverty line who is not a student or elderly pay taxes?" That has a concrete definition, where "able to pay" is completely subjective. You want to talk about wording in contracts... I don't think "able to pay" would be found in any contract because it's so subjective.

Maybe reading so many political threads has made me cynical, but the tactic I often see employed is somebody will ask a leading question, one that most people would agree on, and then when everybody agrees, they twist the wording slightly or spin the result to mean those people support a specific plan or proposal or policy.

I'm not saying that's what you're doing here, but this is something I can imagine some people doing. They could say "88% of PFers believe a single person making 12,000 a year should pay federal income tax!" when I think that if you defined it that way, more people would have voted no. (The poverty line for such a person is \$11,170 according to HHS).

Or, even worse (again, I am NOT saying this is what you're doing here, but only what I've seen others do), a person could claim "88% of PFers think that the child care credit should be abolished!" (This is because a fair amount of those who pay no income tax don't do so because they receive more in child tax credits than they pay in income taxes, for a net gain).

I've started to ramble a bit, so let me summarize. I disagree with your definition of "able to pay" as anybody over the poverty line. I believe that everybody who is able to pay, by my definition of able to pay (which I have made no attempt to articulate), should pay taxes, but by your definition, I had to vote no on the poll. But, I agree with the statement "Anybody who is able to pay taxes should pay them" for sufficient values of "able to pay." But again, that's a "no" vote.

My earlier points were to say that it's counterintuitive to vote "no" on a question it seems that one agrees with because of how the terms are defined. Should a single mother with two kids making 19,500 a year have to pay federal income taxes on top of payroll taxes? No. Do you define her as "able to pay?" Yes. (see HHS link earlier) I'd be curious to see how differently a poll that asks "should this single mother have to pay income taxes" comes out as compared to this one.

SixNein
Gold Member
I'd like to gain some clarity on part of the issue with the Romney "47%" statement. There are a lot of "yeah, but...." responses to it, but few people who give such responses ever make it clear on this point:

Should everyone who is not elderly, poor, a student, or in some other hardship pay federal income tax?

For the record, according to this CNN graphic, it is roughly 28% of the population that is currently able, by that criteria, who does not pay federal income tax (though it includes an imprecise poverty measure): http://money.cnn.com/galleries/2012/pf/taxes/1203/gallery.election.moneymag/index.html?hpt=hp_t1

For the "other", what I'm looking for is another criteria for deciding who should and shouldn't pay federal income tax, For example:
-Anyone over twice the poverty line.
-Only the rich.
The manner in which the tax issue is argued by Mit Romney seems to indicate some kind of anti-poor attitude. He argues the income tax as if it were the only tax in America, and anyone who isn't paying the only tax is a freeloader. As Warren Buffet pointed out, proportionally, the tax burden is lighter for the wealthy. To counter the Buffet argument, republicans say if he doesn't like his tax rate then he should volunteer money. The counter-argument offered by republicans is short, witty, and a red herring. And any time one points out the error in reasoning employed, conservatives hold their breath, count down from ten, and repeat the same arguments again.

As for your question, I believe the tax code should be simplified and progressive. Obviously, the tax code is too complex for the public to understand.

turbo
Gold Member
For quite a number of years, my wife and I were in the top 2% in earnings. We never had any children, and we haven't had any loans on our home(s) for over 25 years. We couldn't take advantage of any of the fancy-pants deductions or lower tax rates that the Mittsters employ. Still, I never begrudged a cent of that income tax. The US government has used our tax money to build a network of highways and roads and rail, and other facilities that we all use.

Could the federal tax code be amended to be more fair to all? I think so. When Mitt can slide by with paying 13-14% on his massive income, something is very wrong. He is able to pay Federal Income Tax, but is dodging it with the help of an accounting firm. If my income tax return approached 800 pages, I would shoot myself.

I didn't vote on the poll because the premise is flawed. I should point out that even the poorly paid workers under the poverty line have Federal taxes withheld from each check to pay for SS and Medicare. These are the same programs that the wealthy want to cut or privatize to finance their own welfare (low tax rates and lots of loopholes). The fact that low-wage earners can't earn enough to pay income taxes should be a matter of discussion.

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arildno