Wealthy Non-Taxpayers — From 60 to Thousands in 30 Years
by Noni Mausa
Wealthy Non-Taxpayers — From 60 to Thousands in 30 Years
Bruce Bartlett provides the numbers, but it’s so much easier to see in a chart.
Wealthy Non-Taxpayers 1977 to 2009, showing incomes over $200,000 per year. Blue is percentage of total households over $200,000 paying no taxes, purple is numbers of high-income households paying no taxes. Numbers from chart here: http://economix.blogs.nytimes.com/2012/06/05/rich-nontaxpayers/, drawn
from IRS data.
On this chart, the percentage appears relatively stable with a low of 0.066 to a high of 0.529 (66 per 100,000 to 529 per 100,000) but actually that’s an eightfold increase, mostly accruing after 2004.
The numbers of households, however, leap like a gazelle after 2004, reaching a high of 22,000 high income households paying no taxes, from a low of only 60 in 1977.
Gee, Noni. I thought the only people who didn’t pay taxes were the shiftless, lazy bums who are poor on purpose. No? So what’s these people’s excuse?? /snark/NancyO
the IRS reports on the fortunate 400: with average incomes something like $100,000 an hour…
Did anyone notice the spike is the year after the 2003 tax hikes, and is only slightly reduced by the Great Recession??
With the proliferation of Roth IRAs and now 401(k)s and given demographic trends, wouldn’t be surprised if this trend continues. The 2003 tax hikes [sic] created more flexibility for the wealthy to create Roth accounts.
I also theorize that in a society with steep inequality, when losses occur, even proportionally, across the board, the real outcome is not loss at the high end, but increased leverage (monetary and otherwise.)
Here’s another chart using the same numbers, this time comparing wealthy who did not pay taxes to the total numbers of wealthy by the same criteria. Interesting to see the sharp jump in the proportion of non-payers at 2004.
Just in time after all the years of Ayn Rand we hear from Romney how immoral it is to help people in need, the moral thing to do is let them help themselves, tell them, you are on your own, the Republican yo-yo policy as someone has called it. Greed and gluttony are virtues. It is not fair to expect higher taxes from the job creators.
Romney and his friends are very lucky people, born to wealth, smart and good looking, and healthy and lots of good connections to make lots of money. I say life was more than fair to them. Why do they go on whining how unfair it is for them to pay some taxes a little more than people who have a lot less, who are not as fortunate as they are?
I am sick and tired of their whining, their obsession with taxes when they don’t even know how much money they have and not know how much their taxes are and will never even miss the money. A sorry bunch they are.
This is one of the worst examples of political propaganda I have ever seen.
1) Not inflation adjusted. Of course the absolute number of non taxpayers increases when the total population of $>200K increases due to inflation
2) The X axis is purposely scaled to exaggerate the increase. A more honest scale would just show a small line crawling along the Y axis.
3) The percentage who pay no taxes is very small – around 1/2 of 1%. We don’t know the reason why this is happening, but whatever it is, it has been codified by Congress.
All this is designed to influence people into believing a large number of rich people are not paying taxes, when in fact both the average tax rate and the percentage of the total taxes paid for the top percentiles has contiunually increased.
I can see how this could whip an idiot Occupier into a frenzy, but I am surprised it has some of the same effect on coomenters here.
Sammy I would agree that the numbers should be inflation-adjusted but this would not change the key finding that the numbers of high-earners who are not paying taxes rose precipitously after 2003, even more than the precipitous rise in the numbers earning over $200,000. And the latter rise is difficult to attribute to either inflation or economic growth since 2003.
Yes, and yet… these are the very privileged whining crybabies who most working class Americans sympathize with and protect at the ballot box, time and time again. The Gordon Gekkos have been elevated to demi-gods in current culture, “freshwater” neocon/neolib economic theories are accepted as gospel, and Ayn Rand is revered as the sage of our age. Willfully ignorant low information voters keep going to the ballot box and voting against their own economic interests, allowing right-wing propagandists at Fox and hate radio to shape their worldview.
How do we protect ourselves from our own collective stupidity?
America is in a revolution and the tax situation is one of the reasons for the revolution. Americans cry for fairness and all the Republicans and Romney give us is voodoonomics. To cut as much as you can out of the budget while raising as much revenue as you can is the way to solve any kind of deficit in any kind of operation, be it business or government. You can tax the rich, those making over $200,000 a year, at a high rate, say 40% and it wouldn’t hurt the economy. Those high wage earners make enough money to BUY the things that fuel our economy. So why give tax cuts to the rich? What you want is to get enough money in the hands of people making $18,000 to $80,000 dollars a year so that THEY can BUY things that fuel the economy. The economy is like a piece of pie, the more people who can buy a piece of the pie the bigger the pie you will need. Reorganize our government so that it cost less is something we have to do. Raising more revenue for our government is something we have to do. NOW LET”S DO IT! Read http://www.mybetteramericaplan.com to see the ONLY way out of America’s economic mess.
President Obama and the Congressional leaders of both political parties have just met to discuss the economy and the budget. Yet everyone leaves the meeting without accomplishing anything. How sad! This is not the way our government is suppose to be run. The Republicans talk about President Obama not presenting a budget in three years but yet the Republicans the Republicans haven’t either. The Republicans tried yesterday to get four different Republican budgets passed but all four Republican budgets failed to pass. President Obama and the Democrats have presented a budget months ago that calls for budget cuts and tax increases but the Republicans refuse to pass any budget that has tax increases. So it is the Republicans who are holding up progress to get a budget passed. However President Obama and the Democrats need to keep trying to get a budget passed numerous times before the election as well as after the election that has budget cuts and tax increases to show to the voters that they are serious about lowering the deficit. High deficits and high unemployment is the only reason people are going to vote for Romney and the Republicans. President Obama and the Democrats have to do ALL they can to lower the deficits and improve employment by improving the economy. The Republicans are doing ALL they can to ruin America’s economy because Romney and the Republicans KNOW that a weak economy is the ONLY way that they can win the next election.
Are Occupiers all idiots or are they just on the pointy end of the stick? The numbers are what they are. Maybe we should Occupy the Caiman Islands and find out?
It was said that want Hoover would not do for the very rich, Boy George Bush did for the rich with his 2001/2003 tax cuts which filtered 31% to ~1 million federal income tax households. There income remained stable while the rest of us either stagnant or reduced income. As Cheney said: “Finally Something for us!”
It was recently calculated (by Saez I believe) that top rates could easily be 80 percent without harm to the economic system. Under Eisenhower they were 95%.
“The worst example of political propaganda you’ve ever seen?” I blush … I am sure commenters can supply much more egregious examples off the top of their heads, in the dark, without benefit of guide dog. We could have a contest…
Sammy: the figures I worked from are from the IRS report “High-Income Tax Returns for 2009”, here http://www.irs.gov/pub/irs-soi/12insprbulhignincome.pdf
The graphs deal with “…Income of $200,000 or More Measured in Current Dollars and in 1976
Constant Dollars.” You can check their data there. Go to page 9 of that report to see a discussion of inflation regarding the numbers.
Yes, I adjusted scales to make things more visible. If the number of wealthy non-payers was charted to scale against the US population, for instance, it would be a hair-thin line, as you mention. The second graph I provided, here in the comments, has no scale at all because I wanted to see the changes in proportions of payers to non-payers over time. For proportionality along with adjusted versus non-adjusted numbers, Chart D is your friend here.
The fourfold jump in wealthy non-payers (WNP) after 2004 is especially curious. What happened in 2004 to make high-end tax evasion more possible or popular?
Another point of interest in the report: of the 22,000 WNP in 2008, about half paid no income tax worldwide. (Figure C.)
Now, in America today an income of $200,000 is comfortable but hardly unusual. About 372,000 US households are included (Figure A.) Where do the 20,000 WNP fall in the distribution of those 372,000? I searched through the report, but there’s no easy reply to that. Hard working doctors and wealthy heirs are all lumped together, rather the way the definition of “large mammal” includes everything from 40 lb. wild pigs on up to 200 ton blue whales. Anyone have fine-grained data for the composition of the over-$200k?
Can we know, at the very least, how much tax money was forgone from these 20,000 people? Assuming they all made the minimum $200k, and would have paid 20% in taxes, we get (200,000 x 20,000 x 0.2) = $800,000,000, or less than a billion. Chicken feed — 1.3% of Bill Gate’s net worth. But I think we can safely assume that the real number is far higher.
The report is worth a detailed look, anyway. Go for it, Sammy.