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Understanding the Numbers of the 45% That Don't Pay Any Taxes At All

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    Found this report very interesting, but not sure how to dissect these findings:

    Tax Units with Zero or Negative Income Tax Under Current Law, 2011-2025

    This shows that actually on average ~45% of all people in this country either don't pay any income tax, or end up getting money back. So that means that consistently close to half of all US citizens aren't paying a federal income tax bill. But is that really correct to say?

    I wonder if this chart takes into account all the monies people pay in taxes taken out of their paycheck every month vs what they get back? It does say that of the ~45%, on average ~17% of these filers don't have any payroll taxes to pay. And that ~27% fall into the category of 'Zero or Negative Sum of Income and Payroll Taxes'. So that seems to mean that half of the people that either don't get a yearly bill, or the ones that actually do get a federal refund, are likely not employed or are barely making much at all, yeah?

    So if half of the 45% don't make enough to really file (if I understand that correctly), then that makes sense. Not everybody works enough to file (and that makes sense given the sheer population count in this country). Makes sense it's in that 17-27% range too.

    But what of the other 27-28% that do make enough, but don't pay anything? Is this a skewed metric, or does this finding take into account all that they paid in payroll/income taxes throughout the year VS their final debt/refund check?

    I have seen this 45% number popping up all over the place online. Just trying to wrap my head around the actual logic math behind it all. Any thoughts?

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    This should help with this question. Here's an exert from Forbes -

    I must conclude with an important reminder: Just because people don’t pay federal income tax doesn’t mean they don’t pay any tax. In fact, nearly everyone pays something. Three-fifths of those who don’t owe income tax work and thus pay Social Security and Medicare payroll taxes. And almost everyone pays state and local sales taxes, excise taxes, or some other levy. Check out our whiteboard video that explains what’s really going on and why the number of people paying no federal income tax will fall.