Where the 47 Percent Live
By Daniel Bukszpan | CNBC – 18 hours ago
@cnbc on Twitter
Was
Mitt Romney correct in a recently surfaced video that 47 percent of the
voting public pay no federal income tax? The figure that he cited
originates from a 2011 study conducted by the Tax Policy Center.
Although the figure in the study is actually 46.4 percent, the basic
claim is true — there is a large swath of U.S. citizens who pay no
federal income tax whatsoever.
Who are these people, and why are they exempt?
“They’re either paying payroll taxes or they’re the elderly,” Heather Boushey, senior economist at the Center for American Progress, said in an e-mail. “Only 7.9% of households do not pay any federal taxes, but that’s because they’re either students, on disability, or unemployed.”
See this slideshow: States That Donate the Most to Presidential Campaigns
These groups may not pay federal income tax, but that's different from paying no taxes whatsoever. “Everyone pays taxes of some sort,” Boushey said. “If you have a job, you pay payroll taxes. If you buy things, you pay sales taxes. And people pay taxes to their state and local governments.”
Other groups who pay no federal income tax include retirees and people earning $20,000 a year or less. “The elderly don’t have to pay income tax on their Social Security benefits, while low income workers qualify for the Earned Income Tax Credit or the Child Tax Credit,” Boushey said.
Read ahead to see the 10 states with the highest number of people who pay no federal income tax. The rankings are from the Tax Foundation and are from 2010, the nonpartisan tax research group’s most recent list.
Eight of the states are considered red, one is leaning toward President Barack Obama and one is a swing state.
1. Mississippi
Total Returns: 1,283,495
Returns With Income Tax Liability: 712,035
Returns With No Income Tax Liability: 571,460
Nonpayers: 44.5%
Mississippi tops the list because it comes in first place in numerous categories. “Mississippi ranks number one for returns with no taxable income, for Earned Income Tax Credit recipients and refundable child tax credit recipients,” Kasprak said.
The state is also “last in average income per return,” he said. “By most measures, it’s the poorest state in the country, so that is why it has so many nonpayers.”
2. Georgia
Total Returns: 4,589,611
Returns With Income Tax Liability: 2,639,561
Returns With No Income Tax Liability: 1,950,050
Nonpayers: 42.5%
Georgia is home to nearly 2 million households that pay no income tax. This puts it near the top of the list of states where the 47 percent reside.
“Georgia is number two for returns with no taxable income,” Kasprak said. “It’s also fourth for returns receiving the refundable child tax credit.”
3. Alabama
Total Returns: 2,102,251
Returns With Income Tax Liability: 1,254,979
Returns With No Income Tax Liability: 847,272
Nonpayers: 40.3%
Almost 850,000 Alabama households filed tax returns for 2010 that reflected no liability. According to Kasprak, the state ranks third in the nation for percentage of Earned Income Tax Credit recipients, and the mean annual salary in the state is $39,180, according to the Bureau of Labor Statistics. As a result, more than 40 percent of the state’s residents paid no income tax.
4. Florida
Total Returns: 9,631,252
Returns With Income Tax Liability: 5,879,430
Returns With No Income Tax Liability: 3,751,822
Nonpayers: 39%
Residents of Florida, the only swing state on the list, aren’t in the nation’s top 10 for the Earned Income Tax Credit or the Child Tax Credit. However, it has the second-highest percentage of returns reflecting income under $50,000 and the sixth-highest percentage of returns with no taxable income.
The state’s large elderly population is a major factor in its high ranking. “Florida has the highest percentage of returns with taxable Social Security of any of these states,” Kasprak said. “That indicates a higher-than-normal percentage of elderly people, who, in general, have less taxable income and are more likely to be nonpayers.”
5. Arkansas
Total Returns: 1,224,333
Returns With Income Tax Liability: 748,945
Returns With No Income Tax Liability: 475,388
Nonpayers: 38.8%
In terms of mean annual wage, Arkansas is in worse shape than South Carolina. Its average salary is $36,340, according to the Bureau of Labor Statistics.
Accordingly, Arkansas also has a higher percentage of tax returns
reflecting low annual salaries. “Arkansas has the third-highest
percentage of returns with income under $50,000,” Kasprak said.Who are these people, and why are they exempt?
“They’re either paying payroll taxes or they’re the elderly,” Heather Boushey, senior economist at the Center for American Progress, said in an e-mail. “Only 7.9% of households do not pay any federal taxes, but that’s because they’re either students, on disability, or unemployed.”
See this slideshow: States That Donate the Most to Presidential Campaigns
These groups may not pay federal income tax, but that's different from paying no taxes whatsoever. “Everyone pays taxes of some sort,” Boushey said. “If you have a job, you pay payroll taxes. If you buy things, you pay sales taxes. And people pay taxes to their state and local governments.”
Other groups who pay no federal income tax include retirees and people earning $20,000 a year or less. “The elderly don’t have to pay income tax on their Social Security benefits, while low income workers qualify for the Earned Income Tax Credit or the Child Tax Credit,” Boushey said.
Read ahead to see the 10 states with the highest number of people who pay no federal income tax. The rankings are from the Tax Foundation and are from 2010, the nonpartisan tax research group’s most recent list.
Eight of the states are considered red, one is leaning toward President Barack Obama and one is a swing state.
1. MississippiTotal Returns: 1,283,495
Returns With Income Tax Liability: 712,035
Returns With No Income Tax Liability: 571,460
Nonpayers: 44.5%
Mississippi tops the list because it comes in first place in numerous categories. “Mississippi ranks number one for returns with no taxable income, for Earned Income Tax Credit recipients and refundable child tax credit recipients,” Kasprak said.
The state is also “last in average income per return,” he said. “By most measures, it’s the poorest state in the country, so that is why it has so many nonpayers.”
2. GeorgiaTotal Returns: 4,589,611
Returns With Income Tax Liability: 2,639,561
Returns With No Income Tax Liability: 1,950,050
Nonpayers: 42.5%
Georgia is home to nearly 2 million households that pay no income tax. This puts it near the top of the list of states where the 47 percent reside.
“Georgia is number two for returns with no taxable income,” Kasprak said. “It’s also fourth for returns receiving the refundable child tax credit.”
3. AlabamaTotal Returns: 2,102,251
Returns With Income Tax Liability: 1,254,979
Returns With No Income Tax Liability: 847,272
Nonpayers: 40.3%
Almost 850,000 Alabama households filed tax returns for 2010 that reflected no liability. According to Kasprak, the state ranks third in the nation for percentage of Earned Income Tax Credit recipients, and the mean annual salary in the state is $39,180, according to the Bureau of Labor Statistics. As a result, more than 40 percent of the state’s residents paid no income tax.
4. FloridaTotal Returns: 9,631,252
Returns With Income Tax Liability: 5,879,430
Returns With No Income Tax Liability: 3,751,822
Nonpayers: 39%
Residents of Florida, the only swing state on the list, aren’t in the nation’s top 10 for the Earned Income Tax Credit or the Child Tax Credit. However, it has the second-highest percentage of returns reflecting income under $50,000 and the sixth-highest percentage of returns with no taxable income.
The state’s large elderly population is a major factor in its high ranking. “Florida has the highest percentage of returns with taxable Social Security of any of these states,” Kasprak said. “That indicates a higher-than-normal percentage of elderly people, who, in general, have less taxable income and are more likely to be nonpayers.”
5. ArkansasTotal Returns: 1,224,333
Returns With Income Tax Liability: 748,945
Returns With No Income Tax Liability: 475,388
Nonpayers: 38.8%
In terms of mean annual wage, Arkansas is in worse shape than South Carolina. Its average salary is $36,340, according to the Bureau of Labor Statistics.
See the full list: Where the 47% Live
More from CNBC:
- 'Drink Less, Work More' Billionaire Tells Non-Rich
- Most Expensive States to Raise Children
- Biggest Companies Run by Women
- end quote from:
- http://finance.yahoo.com/news/where-the-47-percent-live.html
- In case you didn't click on the full list here are just the next states in order like they were above
- 6. South CarolinaTotal Returns: 2,051,823
Returns With Income Tax Liability: 1,255,957
Returns With No Income Tax Liability: 795,866
Nonpayers: 38.8%
According to the Bureau of Labor Statistics, the mean annual wage in South Carolina is $38,560. This is below the national average of $45,230, and helps put it on this list.
“South Carolina ranks 45th out of 50 states -
7. New MexicoTotal Returns: 913,001
Returns With Income Tax Liability: 560,068
Returns With No Income Tax Liability: 352,933
Nonpayers: 38.7%
Of all the tax returns filed in New Mexico in 2010, almost 39 percent showed no income tax liability. The state is the only one on the list that is leaning toward Obama, according to The New York Times.
8. IdahoTotal Returns: 663,291
Returns With Income Tax Liability: 407,579
Returns With No Income Tax Liability: 255,712
Nonpayers: 38.6%
Like Texas, Idaho lacks many of the attributes typical of a state with high numbers of nonpayers. However, it has the sixth-highest rate in the nation of tax returns claiming unemployment compensation. “The jobs picture in that state likely contributes to the nonpayers
9. TexasTotal Returns: 10,995,576
Returns With Income Tax Liability: 6,760,829
Returns With No Income Tax Liability: 4,234,747
Nonpayers: 38.5%
According to Kasprak, Texas doesn’t rank very high in terms of the factors that contribute to high populations of nonpayers. It is, however, second in the nation in terms of recipients receiving refundable child tax credits.
10. UtahTotal Returns: 1,134,626
Returns With Income Tax Liability: 699,598
Returns With No Income Tax Liability: 435,028
Nonpayers: 38.3%
According to the U.S. Census Bureau, the average number of persons per household in the state of Utah is 3.04. This is higher than the national average, and it’s one possible explanation for the large number of people- end quote from:
- http://finance.yahoo.com/news/where-the-47-percent-live.html
- So, above we have (by percentage of the population of each state) where the higest percentage of the 47% live by state. Also, it is important to note that it is also legal to invest in things like Municipal Bonds which have no Federal or STate taxes and often give a return (when the taxes you don't have to pay are figured in) of about 10% per year. So, it is theoretically possible to have billions of dollars in Muni Bonds in your state and pay no taxes at all. But, since this money is being loaned to municipalities to build and maintain colleges, bridges, water treatment plants, dams, schools as well as sewage treatment plants the no Federal or state taxes helps build infrastructure everywhere in the U.S. and if you took away that incentive no one would loan money locally to build anything. so this is important to consider as well. Also, Municipal bonds were the single safest investment during the Great Depression statistically speaking. However, now with cities going bankrupt unless your muni's are insured by Treasuries or other forms of real insurance one must be very careful indeed.
No comments:
Post a Comment