The poor don't pay payroll taxes.

www.cbpp.org ^ | Center on Budget & Policy Priorities

[VeniVidiVici]

Sri, link is http://www.cbpp.org/eic2002/factseic-2002.pdf

[bandleader]

"The RATS"only believe in TAX-CUTS for those who don't pay Taxes!!Is This A Surprise???

[buffyt]

My kids only make a few hundred dollars a year, work for about $6.00 an hour, and neither of them gets any tax cuts or tax breaks or tax credits for low income. My daughter works at Limited part time and my son works at Target part time. They take all the usual taxes out of their checks and they do not get tax refunds. They each have a few thousand dollars in their college savings accounts, but no huge amount of money that should offset such a low paycheck. My daughter is always shocked at how much they take out of her paycheck. She only has a few hundred dollars in her savings account this year.

[Free the USA]

http://www.freerepublic.com/perl/bump-list

[Blue_Ridge_Mtn_Geek]

As long as you take a deduction for your children, the tax breaks targeted for low income families is available only to you (if you qualify). Once you stop taking them as deductions, they will be able to jump right in and grab EIC, etc., etc.

Perhaps you should start now, if you want to see them get those benies? Or might you lose more than they would gain? I suspect if, you're like most, the answer will probably be "Yes!".

[templar]

also not figured into the equation is the amount of tax funded services the 'poor' recieve.

[ClaireSolt]

In reality businesses pay all the taxes for their employees. In IRS parlance businesses must collect the taxes for others. If the business goes under, the business-owner, not the employee is liable. Only businesses and the self-employed pay taxes. Most everyone else gets a refund check or earned income credit check. And they blow it!

[buffyt]

OK thanks! I understand now!

[AndyTheBear]

Why aren't we beating the dems over the head with this?

It seems you have a good point, but trying to use it in a debate with the Rats would get you labled as someone who wanted to take these benefits away. Reality is not relevant to Rat arguments.

[aristeides]

I think this is part of the reason why the RATs' plan -- as announced by Pelosi -- did not include a payroll tax holiday. Just that $300 per person "rebate," for everybody, including the poor, whether they pay taxes or not.

[afraidfortherepublic]

Just that $300 per person "rebate," for everybody,

Didn't we just have that from George Bush in 2001? And the Dummycrats laughed at it and said that it was worth nothing?

[holyscroller]

You've gotta learn to think like a Rat to understand the logic: "Earned" Income Tax Credit goes to those who did not earn or pay it. The next "logical" companion program, will be putting half of Mexico on our Social Security program. Makes sense, see? They too never earned it, so it's perfectly logical to give it to 'em. "scuse me. Time for my blood pressure pill.

[Grampa Dave]

Thanks for posting this. I have bookmarked it.

[Bahbah]

This is a very useful post. I am copying it to my personal archive for use in battle. Thanks.

[valkyrieanne]

Thanks for posting this. Note that this document also completely undercuts a big argument for vouchers - that people deserve vouchers because "their tax money should be returned to them." Guess what - those of lower incomes (the only ones to qualify for state voucher programs) *don't pay taxes.* They don't pay federal taxes but instead get EITC "refunds" (i.e. welfare payments.) Nor do they pay property taxes (especially if they are in federally- or state-subsidized housing) and they often pay little state tax as well.

[3catsanadog]

Payroll Tax - does that refer to federal withholding or to Social Security/Medicare? Or both?

[Yo-Yo]

Didn't we just have that from George Bush in 2001? And the Dummycrats laughed at it and said that it was worth nothing?

"Gimmie my dern muffler" part deux?

[ancient_geezer]

it seems to me that not only do people that qualify under the table in the document pay very little, if any, income tax, they also pay very little if any payroll tax!

Am my assumption wrong here?

Nope:

 

A government which robs Peter to pay Paul can always depend on the support of Paul.
-George Bernard Shaw

http://www.cbo.gov/showdoc.cfm?index=1545&from=4&sequence=0  

Table 1. Preliminary Estimates of Effective Tax Rates by Income Category, 1977-1995 and Projected for 1999
Income Category	1977	1979	1981	1983	1985	1987	1989	1991	1993	1995	Projected 1999
Effective Individual Income Tax Rate (In percent)[Income tax plus EIC]
Lowest Quintile	-0.6	-0.8	-0.2	-0.5	-0.2	-1.3	-1.9	-2.9	-3.4	-5.6	-6.8
Second Quintile	3.6	3.9	4.6	3.5	3.9	3.2	3.3	2.7	1.8	1.8	0.9
Middle Quintile	7.1	7.5	8.3	6.8	6.8	6.1	6.5	6.3	5.9	6.1	5.4
Fourth Quintile	9.7	10.4	11.3	9.5	9.3	8.7	8.9	8.7	8.5	8.7	8.4
Highest Quintile	15.8	16.3	17.1	14.5	14.3	15.1	15.1	14.8	15.5	16.2	16.1
All Families	11.1	11.6	12.6	10.7	10.7	10.8	10.9	10.5	10.9	11.3	11.1
Top 10 Percent	17.6	18.0	18.7	15.9	15.6	16.9	16.6	16.3	17.4	18.2	18.0
Top 5 Percent	19.3	19.7	20.0	17.1	16.8	18.5	18.0	17.6	19.3	20.0	19.6
Top 1 Percent	23.1	22.6	22.0	19.3	18.7	20.9	19.7	19.9	22.8	23.4	22.2
Effective Total Federal Tax Rate (In percent)[includes payroll taxes]
Lowest Quintile	8.7	8.4	8.0	8.5	10.2	9.0	8.8	7.9	7.8	6.0	4.6
Second Quintile	14.7	14.9	15.0	14.2	15.5	15.2	15.3	15.1	14.3	14.6	13.7
Middle Quintile	18.5	19.2	19.5	18.2	18.8	18.5	18.9	18.9	19.1	19.7	18.9
Fourth Quintile	20.9	22.1	22.9	21.0	21.3	21.2	21.5	21.6	22.0	22.5	22.2
Highest Quintile	28.2	28.5	27.9	24.6	24.5	26.4	25.9	26.2	27.6	29.6	29.1
All Families	22.8	23.4	23.5	21.4	21.8	22.6	22.5	22.6	23.5	24.7	24.2
Top 10 Percent	30.7	30.5	29.0	25.2	25.1	27.6	26.8	27.2	29.0	31.3	30.6
Top 5 Percent	33.4	32.6	30.1	25.7	25.5	28.5	27.4	27.9	30.2	33.0	31.8
Top 1 Percent	39.7	37.3	31.7	26.9	26.2	30.2	28.1	29.1	32.5	36.5	34.4
SOURCE: Congressional Budget Office.
NOTES:Pretax family income is the sum of wages, salaries, self-employment income, rents, taxable and nontaxable interest, dividends, realized capital gains, and all cash transfer payments. Income also includes the corporate income tax and the employer share of Social Security and federal unemployment insurance payroll taxes. For purposes of ranking by adjusted family income, income for each family is divided by the poverty threshold for a family of that size. Quintiles contain equal numbers of people. Families with zero or negative income are excluded from the lowest income category but are included in the total.
Individual income taxes are distributed directly to families paying those taxes. Payroll taxes are distributed to families paying those taxes directly, or indirectly through their employers. Federal excise taxes are distributed to families according to their consumption of the taxed good or service. Corporate income taxes are distributed to families according to their share of capital income.

[VeniVidiVici]

Thanks to all who replied. I just don't know why the EITC isn't brought up in debate over "who should get tax rebates/cuts" more often. Another poster's reply that the left will just say we want to take it away if we are using that as an argument certainly makes sense, and is the only reason I can guess that the Republicans don't bring it up.

For those of you that don't know, Reagan implemented the EITC and Clinton doubled it.

I must apologize for the misspellings and typos of my initial post. It was my first thread (several replies to existing threads though) and I guess I still have to learn the ropes. I did do the draft in a text file and it looked ok in my browser (even the link)!

3catsanadog, the payroll taxes are the taxes deducted from you paycheck to include fed/state/ss/medicare. Of course people in the lower brackets get most if not all of the fed/state back but not ss/medicare. So in the context of the left's argument that the poor still pay payroll tax, I assume they are referring to ss/medicare.