This week's release of Census data showing that a growing number of families are officially poor prompted CTJ to examine claims that too many Americans are paying "no" taxes and calls to raise taxes on low-income families.
Aside from recipients of Social Security benefits (which are largely untaxed), all but the poorest Americans do pay federal income taxes or federal payroll taxes or both. We estimate that in 2010, only 15 percent of non-Social Security taxpayers paid zero dollars or less in combined federal income and payroll taxes. These families and individuals pay other types of taxes, as this report explains.
Fifty-seven percent of those who paid zero or less in combined federal income and payroll taxes had incomes below $15,000, and 76 percent had incomes below $20,000. This tells us that the vast majority of these taxpayers were quite poor because the average poverty threshold for 2010 was $14,218 for a household of two individuals and $22,314 for a household of four individuals.
Our 3-page report is here.