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People not paying taxes?

Spaceman Spiff

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Just thought this was interesting. My homepage is netscape.com and there's a menu that drops down with some recent news....if it doesn't drop down automatically, click the little tab at the top that says "Whats new"


Oh My Gosh! Guess Who Pays NO Taxes?

Fully 32.4 percent of Americans paid no taxes at all for tax year 2004, up from 25.2 percent in 2000, according to a new report from the Tax Foundation. Before you start screaming about the rich shirking their fair share of the federal tax burden, know this: The people who don't pay taxes are primarily low-income, young, female-headed households who work part-time and are beneficiaries of the $1,000 per-child tax credit or the Earned Income Credit.

Do you think the federal income tax system is fair? What changes do you think should be made? Would a flat tax or a federal sales tax be good options? Sound off in the NewsForum.

Tax Foundation economists say that the 32.4 percent who pay no taxes after they took advantage of perfectly legal tax credits and deductions translates into a record 42.5 million Americans. But it doesn't end there. Approximately 15 million individuals and families earned some income in 2004, but it was so little they didn't have to file a tax return. That brings the total to 57.5 million who pay nothing. And we're not done yet. One tax return often represents several people so when the dependents are included in this no-tax sum, it amounts to roughly 120 million Americans or 40 percent of the U.S. population. And that doesn't count the millions who paid just a very small amount in taxes.

The tax-friendliest states in the U.S.A. are...

Here's the rub, according to the Tax Foundation: We have become a nation divided. There is an ever-growing class of people who pay no taxes and a shrinking class of people who do.

What are America's fastest-rising taxes? It's a good news-bad news scenario.

Who are the non-payers? Fully 91 percent of them earned less than $30,000 annually and 96 percent earned less than $40,000. They are young with more than a third under 25 and 54 percent younger than 35. More than half are single women or families where the primary wage earner is a woman. Fully 79 percent are white, 16 percent are African American and 3.2 percent are Asian Americans. (Hispanic Americans are not included in the racial category since Hispanic individuals can be of any race. When they are included as such, 15 percent of those who paid no taxes are Hispanic.)

There may not be a free lunch, but if you move to Kansas, you can get free land. Really.

What does this mean? The Tax Foundation says the findings raise serious questions about the future of the U.S. income tax system.

What do you want that money can't buy? Find out the top three answers to this question and take our poll.

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The poor pay plenty of taxes. They just don't pay income tax. I wonder what percentage of their income goes to sales tax, social security, Medicare and so forth. I guarantee you it is more than the percentage of their income paid by the very wealthy.

Gee, I wonder if the Tax Foundation has an agenda....

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Oh, the outrage!

Single mothers working part-time jobs aren't paying income taxes! (Granted, they're paying, as a percentage of their income, more than average for sales taxes and similar expenses. But we don't like income taxes, so let's act like they're the only tax, OK?)

And, if you count their kids as (non-)taxpayers, then the numbers get even more shocking! Their kids aren't paying income taxes, either!

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The system needs better compliance; therefore, it needs to be simpler. This involves compressed (almost flat) rates and limited deductions and credits allowed against income. Taxes are paid into the system because our withholding rules work. Most non-payers are self-employed or do not have "reportable income". Similar withholdings may need to be assessed on interest and dividend income, capital gains, etc. to ensure better compliance.

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Here is what the tax foundation fails to mention. . .

They talk about people in terms of a %, but leave out all mention of % of tax money owed. They probably cost the US government a total of $1billion dollars, whereas only ONE single person can screw the governemnt OVER that amount.

If there is anyone who actually believes this BS, and yes, it is BS, they should read Perfectly Legal by David Johnston. It digs into the problems with the IRS, and how they let the top get away with tax evasion, while punishing the people who can't afford income tax to begin with.

The IRS will go after the people making nothing and owing very little, then the person or company who is illegally using off shore accounts to launder money back into the states. There is an estimated loss of over $200+ Billion a year due to these companies.

The way it works is they create a joint venture company with part of it being non-profit and the other part being a corporation. The non-profit part has 99% of the corporation, and is based off shore. The "profit" part is only 1% of the company and is based inside the US. The non-profit owes no taxes, but they can in turn re-invest money into the 1% part of the company and legally send money to the US. This is done constantly, and it kills the tax base. . . But then again, the Tax Foundation would want nothing better then to sock it to lower and middle income Americans. That is the right's ideology and has been for the past 4 years.

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