MEDIA RELEASE: New report busts myth that "half of Americans don't pay taxes"


Virtually every North Carolina household pays taxes, even the poorest households

 

RALEIGH (Nov. 9) – Not only do the poorest North Carolinians pay their fair share of taxes, a new report finds, but the taxes they pay have a greater impact on their quality of life than the taxes paid by higher-income households.

 

The NC Justice Center's Budget & Tax Center released a report today that busts a common right-wing myth: the false talking point that “half the country doesn't pay taxes.”

 

“The truth is that virtually every household pays taxes,” writes BTC Policy Analyst Edwin McLenaghan, the report's author, “and even the poorest fifth of American households pay an average 16 percent of their total income in federal, state, and local taxes.”

 

Not only do the poorest households pay taxes, the taxes they pay—by forcing these families to cut back on basic necessities—have a much greater impact on their quality of life than the taxes paid by higher- income households.

 

The problem with this false right-wing talking point, McLenaghan found, is that it only considers one, very narrow definition of what constitutes “taxes,” the federal income tax.

 

“If one accounts for all federal taxes—income, payroll, excise, corporate—households whose earnings are in the bottom fifth of all households, totaling less than $17,900 from all sources, pay over 4 percent of their income in federal taxes,” the report says. “That’s right: even families with incomes inadequate to provide a meager standard of living and below the federal poverty line for a family of three or more still pay federal taxes.”

 

“The false claim that half of households pay no taxes hides the dramatic decrease in taxes paid by the wealthiest households,” McLenaghan said.

 

The incomes of the wealthiest one percent of households have tripled over the past thirty years as the incomes of the working- and middle-classes have stagnated, and these wealthy households now pay about 25 percent less of their income in taxes than they did thirty years ago.

 

FOR MORE INFORMATION, CONTACT: Jeff Shaw, Director of Communications, NC Justice Center, 503.551.3615, jeff@ncjustice.org; Edwin McLenaghan, NC Budget & Tax Center, 919.861.1468.