“Lucky Duckies” is a term that was used in Wall Street Journal editorials starting on to refer to Americans who pay no federal income tax because they are at an income that is below the tax line (after deductions and credits).
Who are these lucky duckies? They are the beneficiaries of tax policies that have expanded the personal exemption and standard deduction and targeted certain voter groups by introducing a welter of tax credits for things like child care and education.
When these escape hatches are figured against income, the result is either a zero liability or a liability that represents a tiny percentage of income.
The worry of the Journal’s editorialist was that “as fewer and fewer people are responsible for paying more and more of all taxes, the constituency for tax cutting, much less for tax reform, is eroding.
Workers who pay little or no taxes can hardly be expected to care about tax relief for everybody else.
They are also that much more detached from recognizing the costs of government.”
The facts of the matter
In recent years, the number of Americans who pay no federal income tax has increased.
According to The Tax Foundation:
Forty-four million tax returns filed in will rightly demand the return of every dollar or more that is being withheld from their paychecks during , according to the Tax Foundation.…
In , nearly 30 million people had no income tax liability; the number represents a 50 percent increase.…
“Broadly speaking, the 44 million zero-tax filers are low-income, young, female-headed households, part-time workers and beneficiaries of the $1,000 per-child tax credit,” said Tax Foundation economist J. Scott Moody.
And Moody said that in addition to the 44 million who will have no income tax liability, there are another 14 million who will earn income, but will not earn enough to pay taxes, bringing the total number of Americans not paying taxes to 58 million, and Moody stresses that this is still an underestimate.
He said the returns can represent households, which ups the actual number of Americans not paying taxes.
Other taxes hit the poor harder
Sometimes these figures are misrepresented to suggest that the poor pay no taxes, which is not the case.
The federal income tax is only one of several taxes that people pay.
Other taxes, like excise taxes, sales taxes, and especially the payroll tax (a.k.a. FICA), are regressive — that is, the poor pay them at a higher rate relative to their income than do the non-poor.
Tax resistance and lucky duckies
Tax resisters are taking advantage of the “lucky ducky” phenomenon to reduce their federal income tax to zero legally.
As one wrote:
When the war on Iraq started, I stopped paying the federal income tax and started working for my values instead of against them.
I quit my job and deliberately reduced my income to the point where I no longer owe federal income tax.
I’ve transformed my life, concentrating on what really matters, so that I can live well and securely on a lower income.
I’m taking a practical approach, learning about the tax laws and about how to live well by being down-to-earth and sensibly frugal.
I’m learning how to live within my means without paying federal income tax — honestly, peacefully, and legally.
The Journal was frequently mocked for its use of the term “lucky duckies” to refer to people whose lack of a federal income tax burden is the direct result of their lower income.
This attitude was easily satirized as “let them eat cake”-style myopia.
Ruben Bolling’s “Tom the Dancing Bug” comic in Salon magazine, for instance, periodically features a poor duck who keeps outwitting a fat, top-hatted oligarch by cleverly submitting to the misfortunes of his economic class.
Jonathan Chait, in The New Republic, reacted to the Journal editorial by writing:
One of the things that has fascinated me about The Wall Street Journal editorial page is its occasional capacity to rise above the routine moral callousness of hack conservative punditry and attain a level of exquisite depravity normally reserved for villains in James Bond movies.
And one lucky ducky wrote to the Journal editor, offering to share his luck:
I will spend a year as a Wall Street Journal editor, while one lucky editor will spend a year in my underpaid shoes.
I will receive an editor’s salary, and suffer the outrage of paying federal income tax on that salary.
The fortunate editor, on the other hand, will enjoy a relatively small federal income tax burden, as well as these other perks of near poverty: the gustatory delights of a diet rich in black beans, pinto beans, navy beans, chickpeas and, for a little variety, lentils; the thrill of scrambling to pay the rent or make the mortgage; the salutary effects of having no paid sick days; the slow satisfaction of saving up for months for a trip to the dentist; and the civic pride of knowing that, even as a lucky ducky, you still pay a third or more of your gross income in income taxes, payroll taxes, sales taxes and property taxes.