33.0% of American Tax Filers “Lucky Duckies” in 2006

The IRS has released some preliminary data about tax year 2006, and these show that the increasing “lucky ducky” trend — the percentage of Americans living under the income tax line — has pretty much levelled off.

Between 1980 and 2000, the percentage of those households who filed their tax returns but were below the income tax line was in the 18%–25% range. Since then, the numbers have gone way up. The last three years for which I have stats look like this:

Almost a third of American households who filed tax returns last year paid no federal income tax at all for 2006 — either they paid none to begin with, or all of what they paid was returned to them as a refund.

And in other news…

• The anti-war coalition United for Peace & Justice has been at best a very quiet and passive supporter of war tax resistance until recently. The group’s 2008 campaign plan, however, is more bold, and includes this language:

  Over $500 billion has already been spent on this war, with no end in sight. While we keep the pressure on Congress to stop funding the war, we also need to nonviolently take matters into our own hands and encourage taxpayers to directly refuse to pay for the war. UFPJ supports the efforts of the National War Tax Resistance Coordinating Committee and CodePink (both member groups of the coalition) as they encourage people to stop paying taxes for war.

  Leslie Cagan, UFPJ’s National Coordinator, encouraged coalition members to support the campaign: “With Tax Day right around the corner, efforts are underway to encourage people to not lend financial support to this war.”
• The March 2008 edition of Friends Journal contains an article by Nadine Hoover that discusses Daniel Jenkins’s attempts to legalize conscientious objection to military taxation.
• The exploration of “frugalista philosophy” continues at WendyMcElroy.com. Brad writes:

  …[W]hat we are doing is very similar to what John Galt and his fellows did when they went “on strike” and withdrew to Galt’s Gulch. We are denying the State and its army of leeches, not the product of our minds as such, but rather our productivity.

  The lifeblood of the State is taxes. And the two biggest kinds of tax that most people pay are income taxes and consumption taxes (sales tax, gasoline tax, alcohol tax, etc.). If you can learn to live on less money, you can deny the State money twice — when you no longer spend it, and when you no longer earn it.

  Consider an acquaintance of mine who buys the latest and fastest computer every year. Let’s say it’s a $2,000 computer. Here, we pay combined sales taxes of 14%, so he has to fork over another $280 at the time of purchase. Now assume he’s in a 33% tax bracket. He has to earn $3,403, to pay $2,280, to get $2,000 worth of computer. To get that computer he has to pay $1,403 in taxes.

  From my viewpoint, every year I don’t buy a fancy new PC is a year I’ve kept $1,403 out of the rapacious maw of the State.

  This doesn’t mean I’m working as a railroad laborer instead of as a physicist. No, I still work in my chosen profession, but only as many hours as I need to meet my very modest needs. This lets me “purchase” the most valuable commodity of all — my time, to apply as I see fit in other ways to enrich my life.

  I’ve met many libertarians who wistfully wish they could move to a real Galt’s Gulch, to go “on strike” and deny the State the fruits of their labor. You can do this, at home, perfectly legally. All it takes is an adjustment of attitude and the development of new habits. Should this catch on — and, with a recession underway, frugality may become more a matter of necessity than choice — there will be not one, but thousands of “Frugalista Gulches.”

  and Wendy McElroy notes:

  Being frugal is not an end in itself; it is not just another way to amass savings so that you are the one who dies with the most and pays the highest taxes. Frugality is a way to own your own time — rather than someone/something else having a slave-master claim on your life. The less you have to earn in order to maintain a healthy and comfortable lifestyle, the less you need to trade irreplaceable time for money — ½ of which will be stolen by State through various means from income to gas taxes, from licenses to fines. To the extent you work ½ the year to pay off the State, well, to that extent you belong to the State.…

  Get yourself out of that toxic loop in which your time is used to enrich others and not yourself. Being as economically independent as possible is the first step toward liberating yourself from wage slavery, from having ½ your work time go to support corrupt politicians and the overwe’ening State. Stop saying “yes” to the State by participating more than you must in a system that is rigged to rip you off. The farther back you can step, the freer you are.

• The government-appointed taxpayer advocate continues to insist that the IRS policy of outsourcing some of their uncollected tax cases to private debt collection agencies is a boondoggle:

  The program costs $7.65 million to run each year, [Nina E. Olson] said, and the IRS also pays private collectors $4.6 million in commissions, or around 25 cents on each dollar they bring in. That puts the cost of the program to more than $12 million a year.

  Private debt collectors brought in $32 million in 2007, Ms Olson said, but are expected to bring in as little as $23 million this year. When the costs are subtracted, the IRS program may have less than $11 million in net revenues for 2008.

  But there is a far greater cost, Ms Olson argued.

  If the more than $7 million in operating costs were put into the IRS’s automated debt collection system — an existing program — the agency could bring in at least $91.8 million in net revenues, and possibly as much as $145 million — a much bigger return. Those figures do not include the commissions.

  Ms Olson argued that when calculated against that backdrop, private debt collection cost the government at least $81 million a year in revenue.