September 20, 2012

Precise questions and the 47%

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Brad DeLong points out (mixed in with lots of other stuff) out how carefully you have to state things to get to the famous 47% of non-taxpaying Americans: Last year 47% of tax units paid no net federal income taxes. 

  • Last year: when unemployment was at record levels since the Great Depression
  • tax units: married couples filing jointly count as only one tax unit, so you undercount them relative to single people, who are more likely to be either young or old and thus lower-income
  • net: the USA delivers child benefits and some income support via the federal income tax system. A family whose child benefits are larger than their federal income tax is counted in the 47%
  • federal income taxes: it doesn’t include sales tax, state and local income taxes, or even federal payroll tax (which is paid as a proportion of income and funds Social Security and Medicare)

Precise questions can matter a lot.

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Thomas Lumley (@tslumley) is Professor of Biostatistics at the University of Auckland. His research interests include semiparametric models, survey sampling, statistical computing, foundations of statistics, and whatever methodological problems his medical collaborators come up with. He also blogs at Biased and Inefficient See all posts by Thomas Lumley »