How are the non-rich paying all the taxes when at least half get a refund?

Well, in some circles I would be considered wealthy, and I always pay a fucking boatload of taxes and never get anything “back”. I must be doing something wrong…

Bad time of year to let me see this Q. I’m kinda cranky for just that reason right now.

What qualifies as poor? I made 12K last year and got 130 back. But I paid a lot more.

You seem to be saying most people get most of their withholding back and that’s not true at all.

Employers withhold an amount estimated to meet your tax obligation. Not some random number which will simply be given back afterwards. The estimate can’t be too exact because of joint filing and deductions and such.

And the false “The poor do not pay taxes” claim is nonsense. Federal income tax is just one piece of the pie.

For example, a person making $20,000 pays 7.65% Social Security tax. A person making $500,000 pays 1.6%.

Refunds have nothing to do with how much a person pays in total. What I mean is, if your withholdings are high throughout the year you get money back, if they did not withold enough, you owe money. But, in the end you pay the same amount.

Getting back? You mean they overpaid their taxes all year, and are just being paid back the difference.
The mid class are still paying plenty.

@Hypocrisy_Central It is easy to understand how you could be confused. The GOP (Greedy Oligarch Party) has been broadcasting sophistry and spin since George W. Bush took office. They have been trying to hide what they have done to slant the tax codes heavily in favor of the top 1%, and run our debt into the stratosphere in the process. While they piss and moan all the time about the “Librul” Main Stream Media or sometimes the Lame Stream Media, the fact is the media is almost exclusively owned by large corporations whose CEOs and big investors profit from this spin, and so it’s almost never challenged as it should be in a truly free, representative press.

You have already heard than most lower echelon workers are subject to Payroll Withholding Tax (not Income Tax). Most people set their withholding level a bit more than what they expect to owe, so they get a refund at tax time. They have sent out a good part of their income and they get a little of that back. They want to avoid getting penalized for underpaying withholding.

The Oligarch’s party is very fond of claiming that the bottom 47% of workers pay no income tax. That’s true if you want to claim, as they seem to do, that withholding taxes are not taxes. In fact, those subject to payroll withholding tax pay around 25.9% of their income in all taxes. The Income Tax however, for low wage earners subject to it instead of withholding, is just 10%.

The Greedy Oligarch noise machine also applies the same spin in the other direction. The top 1%, they claim, pay 40% of all Income Taxes. Again, the operative word is Income Taxes. If only things named exactly that count, then it is trye. But they pay far less than 40% of the tax revenues the US collects each year from individuals and families. They actually pay, on average, 16.6% or their income in taxes, well under what middle income earners pay. They get away with this because they can take advantage of a boatload of loopholes they have lobbied Congress for—loopholes that only the rich can use. The true 40% figure that applies to them with no spin is that the top 1% now own 40% of all the wealth in the USA.

But a few billionaires like Rupert Nurdoch and the Koch brothers don’t feel that’s nearly enough. THey must have way more, like pretty much ALL of the wealth. They and a small number of other billionaires along with a coalition of multinational corporations fund the nationwide network of conservative think tanks that crank out GOP talking points and, through outlets like Fox News, shape the national meme to achieve their ends.

Mind you this is not class warfare to say this. It is simply telling the truth. Using spin and sophistry to cover it up is class warfare. And there are a growing number of rich, even billionaires, who realize the unfairness of the system as it is and want to put it back like it was before Mr. Bush got his hands on it.

/facepalm

I feel that @filmfann has it exactly right, but I think I might have to spell it out for you.

Imagine that you are buying a gallon of milk that costs $3.99 but all you have on you is a $10 bill. The store isn’t going to keep all ten of those dollars, but you won’t get them back either; you will only get $6.01 back.

Okay, now imagine that you pay in $100 a week for taxes but after accounting for all of your exemptions and deductions you only had to pay $3200 in taxes. The IRS will keep $3200 of the $5200 ($100/week times 52 weeks) you paid in and give you a check for $2000.

Now, are you telling me that $3200 = 0 because the IRS sent a $2000 check out, or do you now see how it is possible to pay taxes and still get a refund?

The only way to get a refund is to have too much taken out of your paycheck during the year. The amount you owe is less than the amount withheld, therefore, they refund the excess. They still keep the amount due.

@JilltheTooth I am with you. I had to eventually work like a Hebrew slave just to find all the deductions I was entitled.

@jaytkay You seem to be saying most people get most of their withholding back and that’s not true at all.* Withholdings is a nice pleasant way to say your tax, the money is gone, it wasn’t there to spend. I do not think most get it back or else the government would not be able to spend billions on 3 wars; so many people are paying.

@ETpro You have already heard than most lower echelon workers are subject to Payroll Withholding Tax (not Income Tax). Most people set their withholding level a bit more than what they expect to owe, so they get a refund at tax time. John Q citizen gets so much taken out of his paycheck, which you say is withholding, at tax time he files his tax, if that was his tax then it would logically seem that money would automatically just be applied to his tax. He fills out the tax form, in the instruction booklet it has the tax table printed in it. So John Q looks up what is income was as oppose to his filing status and see how much tax he owe, if it were just withholding wouldn’t that be easy? Anything over what that table said would be an excess and he would get that back. Say John Q’s tax according to the table was $2,500 but over the year $2,850 was taken out, he would simply get back $350 the amount of the overage. But John Q has 2 kids he gets to claim, and an elderly parent living with him, plus the hybrid car he purchased and the IRA he opened up. If all those deductions which comes from deduct to take away if more than the tax he is suppose to owe all that was taken over the year he gets back (maybe more). If the amount in the tax table is his tax he should only be able to deduct down to that level and nothing more. Some people who are not rich having the right combination of deductions to use pay no tax.

The Oligarch’s party is very fond of claiming that the bottom 47% of workers pay no income tax. That’s true if you want to claim, as they seem to do, that withholding taxes are not taxes. If the withholding is not real tax then shouldn’t everyone be paying 100.s to 1,000s more in April of real tax above the withholding not real tax?

@jerv Okay, now imagine that you pay in $100 a week for taxes but after accounting for all of your exemptions and deductions you only had to pay $3200 in taxes. The IRS will keep $3200 of the $5200 ($100/week times 52 weeks) you paid in and give you a check for $2000. Riddle me this? If when you fill out your W-2 it is to tell whomever how much to take out of your pay, you can take less deductions out the gate and get more taken from your pay. I didn’t see the amount posted in the tax table or index in the tax booklet as being on a sliding scale because it points out, you make between this and that with this many deductions you can claim for being married, number of kids etc your tax is X. With what you said the $2,000 is the max he should get regardless if he had other things he could claim like starting an IRA buying a hybrid car etc.

Now, are you telling me that $3200 = 0 because the IRS sent a $2000 check out, or do you now see how it is possible to pay taxes and still get a refund? Based off that the government gets theirs no matter what. If a person earns 13 million and for the sake of argument say his tax is 25% his tax owed would be 3 and a quarter mil or so. If he paid by estimate each quarter and ended up paying 4.5 mil he could only one and a quarter mil back, so he still would have paid his 3 mil and change so how can people say the rich do not pay when they would not get back the 3.25 mil?

@Hypocrisy_Central First off, it’s the W-4 that you fill out to change your deduction.
Second, percentages automatically are a sliding scale of sorts.
Third, you missed where I said ”...after accounting for all of your exemptions and deductions…”. In other words, those things are already claimed and the numbers adjusted accordingly.
Fourth, that millionaire paid only 25% while someone earning one-tenth of the income paid over 30%. Many people in those upper brackets have an effective tax rate around half of what the middle class does. I don’t know if you know what a progressive tax system is supposed to be like, but that isn’t it.

Something tells me that at least part of you would prefer not to understand as that would imply that your ideology is either unfair, illogical, our just plain wrong.

Btw, its not just the wealthy like you and @JilltheTooth that work hard to find all the deductions you can. People who actually need the money to get by work just as hard as those who need the money to invest their way to a higher income bracket where the taxes are often lower.

Getting back to the false premise of the original question. Nobody says “the non-rich paying all the taxes”. Nobody.

The wealthy pay more taxes, because they have much higher incomes.

But their tax rate has declined steadily. Their taxes are the lowest in decades.

“The 400 highest-earning taxpayers in the U.S. reported a record $105 billion in total adjusted gross income in 2006, but they paid just $18 billion in tax, new Internal Revenue Service figures show. That works out to an average federal income tax bite of 17%—the lowest rate paid by the richest 400 during the 15-year period covered by the IRS statistics. The average federal tax bite on the top 400 was 30% in 1995 and 23% in 2002.”
Forbes.com

@Hypocrisy_Central Regarding withholding being the exact amout of a taxpayers taxc liability, it’s hard to do that without a working crystal ball. You would have to know by January 1st the exact tax bill you will owe at the end of the tax year. And you would have to be lucky enough to match that exact amount by filling in the right numner on the small number of blanks included on a standard W-4. That’s highly unlikely to happen.

If a taxpayer subject to withholding (which includes more hourly and salried workers) underestimates, they get penalized. So most deliberately overestimate withholding by a bit. Not too much, because then you deduct a big chunk out of every paycheck, and you finally get it back at the end of the year with no interest.

If the withholding is not real tax then shouldn’t everyone be paying 100.s to 1,000s more in April of real tax above the withholding not real tax? Of course withholding is real tax. It’s just not called income tax. The income tax applies to self emploued and other workers and earners not subject to withholding. At the lower income levels, which most people subject to withholding tax are in, the Income Tax tate is considerably lower than the Payroll Withholding Tax rate. The GOP argument is true within the strict definitions of various tax names, but it is wildly misleading—enough so to qualify as a Big Lie. And the purpose of this particular Big Lie is to try to transfer more and more of the tax burden to the lowest income earners so that the very welathy can get more and more tax cuts.

@jaytkay To put some real-world numbers on that thought, the top 400 tax returns paid an actual rate of 17% of their earnings last year.on average earnings of $345,000,000. That is a lowest top tax rate since 1915.

Consider, most of the uber-rich earn most of their income through capital gains which are taxed at 15% or less. Sure, Warren Buffet’s base salary (a modest $100,000) gets hit hard by the IRS, but the next $40,000,000+ is barely touched at all, at least not in comparison to the average middle-class person whose income is mostly wages/salary and thus taxed twice as hard.

Most people overlook that fact and prefer to focus on percentage of all income earned versus percentage of tax paid by the tippy-top without regard for the shape of the overall distribution curve. To those people, I say, “Go back to the third grade and try to learn some math this time!”.