It’s April 15th, Did You Pay Income Tax This Year?
I mailed my check for over $1300 to the IRS yesterday. Turns out my total income tax liability this year was over $14,000. Ouch. So imagine my dismay this morning when the local talkshow host Michael Graham ran off some current statistics about who pays income tax. 2007 will be the first tax year where a majority of the American population pays no federal income tax. That’s right: over 50% of Americans have a total tax liability of $0. While I’m not sure where they got the data, I was able to find the data for 2006, where 41% of Americans had a total tax liability of $0.
One of the classic examples for highlighting statistics like this: Look around you, between you and your neighbor, one of you is not paying any tax. While in the case it probably doesn’t work because you generally won’t find yourself in an environment with an equal mix of taxpayers vs. non-taxpayers. Where it probably would work pretty good is if you were riding the subway. Next time you are on public transportation, give this statistic some thought, half the people on that vehicle pay no income tax whatsoever.
Some other interesting statistics: if your AGI is over 62,068 you are in the top 25% of taxpayers and you are a member of a group paying over 86% of all income taxes, source. When you hear politicians talk about “the rich” they might just be talking about you.
