Friday, May 20, 2022

Who paid federal income tax in 2021--about 40%

 Who pays no income tax

"The share of households that paid no federal income tax hovered in the low- to mid-40s until the pandemic. In 2020, it increased to more than 60 percent. This was due in part to massive COVID-19-related job losses and a related decline in incomes. In addition, the three rounds of Economic Impact Payments (stimulus checks) in 2020-2021 were structured as refundable tax credits. And Congress increased the Child Tax Credit for the vast majority of parents. Combined, all this substantially reduced the income tax liability of more than a hundred million households and temporarily turned many from payers of small amounts of federal income tax to non-payers.

The share of those not paying federal income tax remained very high in 2021, at about 57 percent. But the economy recovered, federal assistance ended, and the number of non-income tax payers is falling sharply. TPC estimates that only about 42 percent won’t pay federal income tax this year and the share will fall slowly but steadily to the high 30s by the end of this decade.

It also is important to note that many of these households do pay other federal taxes, including payroll and excise taxes. For example, fewer than 17 percent of households will pay neither income nor payroll taxes this year—many of them lower-income older adults. And nearly everyone pays some state or local taxes, including sales taxes."

This is from a rant about a plan to make everyone have some skin in the game. It would raise taxes for those in the middle (the most wealthy already pay more than their "fair share."

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