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Now, about that 47 percent

Coeur d'Alene Press | UPDATED 12 years, 6 months AGO
| October 18, 2012 9:00 PM

Wow. My head still rings from the retorts in Tuesday night's presidential gunfight. I'm an ostrich in modern politics, preferring to bury my ears than listen to the degree of incivility that has become the norm. When did we get so nasty, forget how to express opinions without anger or angst?

OK. Soapbox back in the closet. Now to some fact checking, necessary on both sides and a follow-up on the AP series printed in The Press. Both candidates have referred to "the 47 percent" of people who allegedly don't pay taxes or are dependent drains on the public tap. Is that true, and is it really half the nation?

That depends on your definition of "dependent." I would argue no, at least not in the case of Medicare and Social Security recipients. That's our money, right? We paid in, and when we retire, we get it back. Technically, however, they are receiving "public funds," and are part of that 47 percent - a number closely verified by the bipartisan Tax Policy Center (TPC). Remove Social Security/Medicare recipients and according to a 2010 Census Bureau study, you're down to 37 percent, but that's not all.

Never rely on statistics in a vacuum. Understanding one always requires a few more for a complete picture.

Here's a breakdown:

1. About 46 percent of Americans owed no income tax in 2011. In 2009 during the recession that number was 51 percent; in 2007, 40 percent, which is closer to modern historical norms. Hint: It moves with the economy.

2. The elderly make up one-fifth of the 47. According to a Sept. 17 ABC News article, 10.3 percent of all American tax filers did not pay payroll or income tax because they are elderly, whether or not they had income.

3. The TPC also reports that 6.9 percent of 2011 tax filers had annual incomes less than $20,000.

4. About half of the 47 percent make money, but not enough to incur taxes. Some are students, and veterans who may work or go to school, but most of this half aren't. For example, according to the Tax Policy Center, a family with two kids and income of $26,000 owes no taxes after the standard marital deduction and exemptions. At minimum wage, full-time doesn't reach tax-paying levels for many families.

5. The other half of the 47, about 23 percent according to the Christian Science Monitor's Oct. 1 "Briefing," get there because of particular tax breaks. Many are seniors whose Social Security income is exempt. The next biggest chunk of this 23 percent are parents who benefit from the EITC - earned income tax credit - and child tax credit. The child tax credit is responsible for most of the increase (since the mid-1990s) in the number of people who don't owe taxes, according to the director of the National Economic Council under the Bush administration.

6. Those dependent on other public benefits include (slightly less than) 15 percent of Americans receiving food stamps, 12.5 million veterans receiving government health benefits, and 5.5 million children insured by CHIP (state programs).

7. Four percent of U.S. households receive rent assistance and have median incomes of $10,440; 54 percent of those are disabled or elderly according to the U.S. Department of Housing and Urban Development.

Paying "no income tax" does not mean no taxes paid. Those with (non-Social Security) income still owe property and payroll taxes. Even for the lowest income earners, payroll is at least 9 percent of income (up to 15.3 percent for self-employed). Add state and local taxes and the lowest percentile pays about 16 percent of income in taxes, according to the Center on Budget and Policy Priorities.

Tax Policy Center data shows 78 percent of households who paid no income tax are below the poverty line. Now, how about that infamous "1 percent" rich set who don't pay their share? TPC research suggests even that's misleading; it's not 1 percent of Americans, but closer to 1 percent of the top 1 percent of income earners (about 13,000 filers). That's roughly 13,000 tax filers (some making $533,000) and 4,000 millionaires.

What's the point? Simply to question the numbers and better inform opinions especially during election seasons. Even when a statistic is technically correct, more data better informs conclusions.

Sholeh Patrick is a columnist for the Hagadone News Network. Contact her at sholehjo@hotmail.com.

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