Friday, November 27, 2015

Understanding Inequality and Taxes

Claims of how many households pay income taxes, or income and payroll taxes, or net tax (thanks to negative tax impacts of EITC) are common, but frequently erroneous.  Corrections looks to help put these to rest.
While it can be looked up, Corrections gives two graphs to give an idea of what households pay taxes.  Depending on our measurements (including Federal or state+federal, no deductions/deductions, etc.), 68.2% and 78.7% of households pay positive taxes.  This differs by about 17%-28% from Mitt Romney's "51%" that  "paid taxes."  About 10% of this comes from not being in the depths of the great recession, most of the rest comes from including FICA taxes (which are rarely included in these calculations), with some of the residual also coming from including state taxes.

 First, we display six different measures of the proportion of household heads or households that pay taxes.  We break things up by federal vs. federal+state taxes, and before and after tax deductions (primarily the EITC and additional child credit).  We also include two additional measurements by including SSI and TANF benefits as well as EITC (click to enlarge).  We give these graphs by age of household head.
We also display the distribution of the size of welfare payments (EITC, SSI, TANF, Additional Child Credit) conditional on being positive (click to enlarge).  

We can certainly reject claims like "60% of households don't pay taxes."  We can also note that claims with high proportions of households not paying taxes depend heavily on the use of households that are above the age of 60, or by including people in households that pay taxes but that themselves don't pay taxes, as when households file separately.  

As an aside, Corrections has heard the phrase "IQ's drop by 20 points when discussing politics."  Corrections has a mildly more amusing (tongue-in-cheek) formula with the same concept.  
  1. Let IQ_P be ones IQ when discussing politics.
  2. Let IQ be ones IQ under normal circumstances.
  3. Let R be ones ranking of Reagan (or FDR) on a scale from 0-1.
IQ_P = IQ-2*IQ*(R-0.5)^2

7 comments:


  1. I cannot truly enable but admire your weblog, your weblog is so adorable and great.It has given me courage to try scarier things. I tend to steer clear of them but not anymore.
    Packers And Movers Hyderabad

    ReplyDelete
  2. QuickBooks, a credit card applicatoin solution that will be developed in such a means that one can manage payroll, inventory, sales and every other need of small businesses. Each QuickBooks software solution is developed based on different industries and their demands to be able to seamlessly manage all of your business finance at any time plus in one go. Need not worry if you should be stuck with QuickBooks issue in midnight as our technical specialists at QuickBooks support telephone number is present twenty-four hours a day to serve you along with the best optimal solution very quickly.
    QuickBooks Support Phone Number

    QuickBooks Support Number

    QuickBooks Tech Support Number

    QuickBooks Tech Support Phone Number

    Intuit QuickBooks Support

    Intuit QuickBooks Support Number

    QuickBooks Customer Service Number

    QuickBooks Customer Service

    QuickBooks Customer Service Phone Number

    QuickBooks Support

    QuickBooks Help Number

    QuickBooks Helpline Number

    Intuit QuickBooks Phone Number

    QuickBooks Technical Support Number

    QuickBooks Technical Support Phone Number

    QuickBooks Toll-free Support Number

    QuickBooks Toll-free Number

    QuickBooks Support

    QuickBooks Desktop Support Number

    QuickBooks Support Number USA

    QuickBooks Support USA

    QuickBooks Customer Support Number

    QuickBooks 24/ 7 Tech Support Number

    QuickBooks 24/ 7 Tech Support Phone Number

    QuickBooks USA Support Number

    QuickBooks USA Support Phone Number

    QuickBooks 2019 Support Number

    QuickBooks 247 Tech Support Number

    QuickBooks Support Phone Number 2019

    Support Number For QuickBooks

    ReplyDelete
  3. Hey, Wow all the posts are very informative for the people who visit this site. Good work! We also have a Blog.Please feel free to visit our site. Thank you for sharing.
    @ Local Packers And Movers Bangalore

    ReplyDelete
  4. Superb post, we enjoyed each and everything as per written in your post. Thank you for this informative article because it’s really helpful, I really like site.
    Please visit our website: @ Packers and Movers Kolkata

    ReplyDelete