On this tax day, when you might think taxpayers everywhere are cursing their payments to the government, one group is feeling quite proud: high-income earners who pay no taxes.
We have heard, of course, about the low-income nonpayers. Opponents of taxes and government, in describing the excessive tax burdens of the wealthy, often cite IRS figures showing that the top 1% earn 22% of the nation’s income and pay 38% of the nation’s federal income taxes, while 47% of Americans pay no federal income taxes.
Yet there are plenty of high earners who also pay no taxes. They are called “HINTs” — High-earners, no taxes. They are the personal-income versions of General Electric, and their numbers are rising rapidly.
According to an article by Tom Herman in The Fiscal Times, more than 10,000 Americans who earned more than $200,000 in 2007 paid no income taxes to the U.S. government.
The number of HINTs paying no state income taxes also is surging. In California, 2,430 upper-income households paid no state income taxes in 2008, according to this San Diego Union-Tribune article. The households amount to less than 1% of the total of top earners, but their numbers have jumped from 579 non-payers in 1997. (Only 4% of top earners paid the state’s official top rate of more than 9% in 2008, and yet the top 1% of earners still paid more than 40% of the state’s income taxes.)
In New York, another supposedly high-tax state, 1,573 resident taxpayers with income more than $250,000 didn’t pay any state income tax in 2008, according to the state’s budget office.