Taxes Blog

Finance Blogs » Taxes Blog » Where do nontaxpayers live?

Where do nontaxpayers live?

By Kay Bell ·
Thursday, September 27, 2012
Posted: 4 pm ET

Republican presidential candidate Mitt Romney is still trying to recover from his comment that the 47 percent of Americans who pay no federal income taxes live off the largess of Uncle Sam.

And much has been written about the other taxes that this group of nonpayers does face, such as payroll, sales, property and state income taxes.

Maybe you've been wondering if some of your neighbors are among the nontaxpaying 47 percent. That's quite possible if you live in the South or West.

The Tax Foundation looked at the geographical distribution of households that pay no income tax. It used 2010 Internal Revenue Service filing data, a year before Romney's sample but the numbers tend to be pretty similar from year to year.

The Washington, D.C., tax research group also notes that while Romney's 47 percent figure refers to the percentage of households owing no income tax, the group's percentages are lower because it examined only the percentages of households filing a return and didn't account for those who didn't have to file a federal Form 1040 at all.

And what did the Tax Foundation find? Six of the states with the largest number of residents who didn't pay federal income taxes in 2010 were in the South. The remaining four states were in the West.

Here's the list, with the percentage of nontaxpayers.

  1. Mississippi, 44.5 percent.
  2. Georgia, 42.5 percent.
  3. Alabama, 40.3 percent.
  4. Florida, 39 percent.
  5. Arkansas, 38.8 percent.
  6. South Carolina, 38.8 percent.
  7. New Mexico, 38.7 percent.
  8. Idaho, 38.6 percent.
  9. Texas, 38.5 percent.
  10. Utah, 38.3 percent.

As a point of personal geography, I'm a native Texan. Specifically, I grew up in West Texas. As such, I've always considered Texas a western or southwestern state, not a southern state. But if you insist on classifying the Lone Star State based on most of its latitudinal measurements, then that would put seven of the nonpaying states in the South.

Of course, as has been noted, a lot of those nonpayers that Romney singled out are in the 47 percent because they are poor and didn't make enough money to require they file. Or they are older, living primarily on Social Security, which in that case is not taxed. Or they are in the military and received nontaxable compensation for their service to our country.

And the South in particular is chock full of such residents.

Before the "you are a liberal-leaning fool" emails start, let me make it clear that I am not judging. I'm just reporting data collected by the Census Bureau. And there is nothing wrong with not making a lot of money (been there), being old (getting there and have a mom who lives on Social Security) or being a part of the military (my dad was in the Navy).

The other interesting -- and ironic when you look at it in connection with Romney's remarks -- observation about these states is that they are populated with reliable Republican voters.

In the 2008 presidential election, eight of the states full of folks who didn't have to pay federal income taxes went for Republican candidate Sen. John McCain. They were Alabama, Arkansas, Georgia, Idaho, Mississippi, South Carolina, Texas and Utah.

Only Florida and New Mexico voted Democratic four years ago.

Polls so far indicate that the 2012 state votes for president are likely to follow 2008's partisan model.

And while Romney was talking to very rich potential campaign donors when his 47 percent remark was taped, the subsequent coverage sort of lends a new political meaning to the admonition "know your audience."

Want the latest tax news, deadlines, alerts and tax-saving tips? Subscribe to Bankrate's free Weekly Tax Tip newsletter.

You also can follow me on Twitter @taxtweet.

Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
November 19, 2012 at 12:02 pm

"ironic when you look at it in connection with Romney's remarks -- observation about these states is that they are populated with reliable Republican voters"

I don't see the irony here; people exposed to the dependency lifestyle have a much clearer understanding of the damage it does, and vote for those they believe will try to end rather than reinforce it. If you live in DC or Manhattan, you probably don't interact with anyone on welfare or food stamps; if you live in Jackson or Gulfport, you probably do.

"I've always considered Texas a western or southwestern state"

El Paso is in the west/southwest, Dallas is in the midwest, Houston is in the southeast. Texas is a big place.

Juan Gilberto
November 19, 2012 at 3:54 am

Not taken into account is the trend that the population is moving from the north & northeast to the west & southwest. Texas picked up 4 seats in Congress, AZ 2 with losses in NY & elswhere in New England. Ga & Miss. have large Black populations & New Mex & Texas have large Hispanic populations, both of which traditionally vote Dem even though the state may go Republican in national elections. Florida, half of NYC goes there for retirement. ie: ppl fleeing a state income tax to a low tax state. Libs, please keep this in mine when you say the Blue states are paying for the Red States.

November 19, 2012 at 1:01 am

Martha, depending on your home of residence when you signed up for the military, and whether you keep that state or the one you are stationed in as an Active Duty person, you may not have to pay taxes. While I was AD in the Army, I claimed my home state of Michigan and never paid state taxes. They weren't required.

November 18, 2012 at 9:35 pm

"Or they are in the military and received nontaxable compensation for their service to our country."

This is incorrect, federal income taxes are deducted from military retirement income and most states tax that retirement, too. Active duty military are taxed on their income, too.

Kim H
October 12, 2012 at 9:51 am

I live in Mississippi and I pay taxes- I suggest you break the counties down in the states. You will find that the blue counties are the ones that don't pay the taxes and the red counties pay the taxes. Especially in Mississippi, you will find that Congressman Bennie Thompson's district doesn't pay any taxes and has one of the highest crime rates per capita in the country. Where as the neighboring Rankin country has a very low crime rate and high percentage of tax payers, is strong red county.

October 10, 2012 at 6:28 pm

The question is not what states, but what counties? Does anyone doubt that they are the bluest of blue counties in those red states?

Judy Turner
October 09, 2012 at 3:34 pm

Only liberals drink the Kool-Aid, dearie. Any time conservatives or independents are treated in an even-handed manner, liberals get all antsy and nearly wet their pants because they want EVERYONE who has any kind of media output to be as biased and close-minded and bigoted as they are.

September 29, 2012 at 1:36 pm

Stella obviously drinks the Kool-Aid.

Stella Jonsson
September 29, 2012 at 12:49 am

Great post: nicely stated without judgment. Many thanks for your even-handed perspective.