Friday, July 01, 2005

Generous Non-Taxpayers

The New York Times in their class warfare series looks at new 2002 I.R.S. data on "the number of affluent [top 2%] individuals and married couples who paid no federal income taxes". First it notes general tax distribution.
Over all, the top 2 percent of earners, the 2.5 million filers with income of $200,000 or more, paid almost 27 cents in taxes for each dollar of income they reported in 2002, other I.R.S. data showed. This group accounted for 53.5 percent of the income tax paid by all Americans.
The Times then divides the data into those who paid no taxes to the federal government and those who paid no taxes to any government. The data is also divided between A.G.I. and 'expanded income', which also includes money from sources like tax-exempt interest and untaxed Social Security benefits. But 'expanded income' is income that is earned from lending money to the government, mostly from buying bonds but also from payroll tax contributions. The Times may object but I have absolutely no problem with those who don't pay taxes because they have lent money to the government. The government has their money, it doesn't need to take any more. So I define 'generous non-taxpayers' as those affluent individuals who have lent so much of their fortune to the government that their remaining taxable income no longer qualifies as affluent. The report notes that "nearly two-thirds of those who lived tax free reported income from such bonds." About half have enough exempt income to be 'generous non-taxpayers' by my definition.

I have collect the number of nontaxpaying affluent from the Times article into a table:

                America                 World
        EI      AGI     G       EI      AGI     G
2002    5650    2959    2691    4922    2551    2371
2001    4910    3385    1525    4119    2875    1244
2000    2766    2328    438     298     2022    298
1977    85      60      25      64      37      27
The Times headline is that the number of non-taxpaying affluent grew by 15% in 2002. But the number of world 'generous non-taxpayers' increased by 90% in 2002 and 800% since 2000.

I, on behalf of all taxpayers, would like to thank all those generous people for lending their fortunes to the government so that it can provide the benefits it has without needing to take as much of our money.


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