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Who is a Taxpayer?

I read the headline “61% of Americans paid no federal income taxes in 2020, Tax Policy Center says.”  The obvious correlation is that only 39% of Americans paid federal income taxes for 2020.  The number has several political implications.

The third bullet point down read “The main reasons for the spike — high unemployment, large stimulus checks and generous tax credit programs — will largely expire after 2022.”  I guess that means we can expect to return to normal next year.  So I searched to find out what normal was in 2018 and 2019.

I came up with a headline that said “45% of tax filers will owe nothing in federal income taxes this year.” Close enough – that translates to 55% of the folks filing taxes pay taxes.  Maybe 4 years back over half of Americans paid taxes.  If the predictions of stimulus checks and generous tax credits expiring are correct we may get back to over half the population being taxpayers.  This chart, taken from ITEP shows the share of taxes paid by quintiles, then breaks down to the top 1%.

It’s a model from 2019 – so it is probably based on 53 to 55% of Americans paying taxes.  With the label “Total Taxes” it probably includes state and local taxes, social security, etc.

The next chart also comes from ITEP, and provides a good visualization.

How nice it would be if everyone were in the top 40 percent – but that, of course, would get us into the gini equation, and I was the only one in my department that made a point of calculating that equation.

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