Radical right wing nonsense: only 49% of Americans pay taxes

Common Sense is something of a news junkie and makes it a point to check a variety of news sources on both the left and right.  Today I listened to Fox News Cavuto's diatribe "Everyone needs skin in the game."  This piece of absurd theater is based on a "Heritage Foundation Chart of the Week: Nearly Half of All Americans Don't Pay Income Taxes."

This chart represents that some 49.5% of Americans don't pay taxes saying:

Another eye-popping number was the percentage of Americans who don’t pay income taxes, which now accounts for nearly half of the U.S. population. Meanwhile, most of that population receives generous federal benefits.

“One of the most worrying trends in the Index is the coinciding growth in the non-taxpaying public,” wrote Heritage authors Bill Beach and Patrick Tyrrell. “The percentage of people who do not pay federal income taxes, and who are not claimed as dependents by someone who does pay them, jumped from 14.8 percent in 1984 to 49.5 percent in 2009.”

Common Sense wondered, is this really true?  So lets check.  The data source according to the chart is IRS publication 1304, Table 1.4.  The link provides access to a number of spreadsheets containing the data.  For 1009 it shows in the relevant entry:

So the IRS reports that roughly 140.5 million tax returns were filed in 2009.  According to the US Census Bureau the resident population of the US including armed forces overseas in 2009 was 307 million.  When you do the math you get 45.7% of all Americans filed tax returns in 2009.  Close enough to reasonably match the Heritage Foundation number.

But does this justify the assertion that only 49% of Americans paid taxes?

Distortion #1: Many tax returns are joint representing two individuals.  In fact if the Heritage Foundation had troubled themselves to look at Table 1.3 for 2009 they would have found that 53,580,158 returns were joint!  These returns represent an additional 53.6 million Americans represented by filings.  So 63% of Americans are represented by tax returns, ie. they pay taxes.  Still low but not 49% as represented by the Heritage Foundation.

Distortion #2: According to the Statistical Abstracts of the United States Table 7 in 2009 there were 58.2 million Americans over the age of 65.  Now if you are over 65 you need only file a tax return if you make more than $10,000(individual filer) or $21,300 (joint filer).  According to the Administration on Aging Profile of Older Americans only 37.9 million Americans over the age of 65 reported any income in 2010.  Of these 19.6% reported incomes below $10,000 and didn't need to file.  So 41.9 million Americans did not need to file tax returns (the actual number is somewhat higher since significant numbers of 65+ Americans would be eligible to file joint returns and subject to the $21,300 limit).  Add this conservative number to the 140.5 million returns actually filed and 53.6 million of which were joint gives 236 million equivalent returns, some 76.9% of the US population.

Distortion #3:  According to the Statistical Abstracts of the United States Table 7 in 2009 there were 74.5 million Americans under the age of 18.  An individual younger than 65 making less than $9500 isn't required to file a tax return.  If the Heritage Foundation had consulted Table 1.7 for 2009 they would find that there were 1.8 million filers under the age of 18.  Thus there were some 72.7 million Americans under 18 not required to file a return.  Add this to the 140.5 million returns actually filed, 53.6 million of which were joint, and 41,9 million Americans with no income or income below $10,000 gives 308 million equivalent returns!  That's slightly more than 100% of the US population (the discrepancy results from non-US citizens who must file and estimates contained in the census data)!

What then of the Heritage Foundation's chart and Cavuto's diatribe?

Common Sense wonders, does the Heritage Foundation and Mr. Cavuto believe that Americans with yearly incomes below $10,000 should pay taxes?  Do they believe that individuals with incomes below the poverty line, in 2009 $10,830 for individuals and $14,570 for couples, should pay taxes?

The chart is clearly utterly untrue as it fails to account for Americans that are not required to file tax returns based on entirely reasonable provisions in the tax code and Americans that file joint returns.  It follows that the Heritage Foundation analysts are either stunningly inept (Common Sense doesn't think this is true), that they believe that Americans with incomes below the poverty line should pay taxes (a regrettable possibility), or that they are so blinded by conservative fervor that they released a chart that is so distorted that it is little more than a lie.

As to Cavuto's nonsense, Common Sense would hope that he or someone on his staff would exercise a measure of common sense before spouting such nonsense.

This kind of distortion is one of the roots of the United States current political gridlock.  Gross distortions do not advance civil discourse.  They do not admit to reason or reasonable actions.  That's just common sense.