45% of Americans Pay No Federal Income Tax – Fiscal Policy

An estimated 76.4 million Americans, identified as households, paid no federal income tax for tax 2018. The non-partisan, non-profit tax group known as The Tax Policy Center released income tax data it analyzed for 2018 and found that nearly half, about 44.4% of American households, paid no federal income tax last year. The Tax Policy Center estimates that the number of Americans that did not pay income tax for tax year 2018 increased from 72.6 million in 2016, before the Tax Cuts & Jobs Act became effective.

According to the data, the top 0.1% of taxpayers pay the equivalent of 39.2% of all taxes while the bottom 20% pay no taxes and receive tax refunds in the form of refundable tax credits. The ultra wealthy, also know as the top 1% of taxpayers, with annual incomes of about $2 million, pay about 40% of all of the federal income taxes in the U.S. (Source: Tax Policy Center/Washington D.C.)

Social Security Falls Short On Projections – Retirement Planning

Social Security costs will exceed its income in 2020 for the first time since 1982, forcing the program to dip into it’s trust fund, which is currently just under $3 trillion. Social Security is funded by two trust funds, one for retiree benefits and another for disability benefits. Disability applications have actually been declining since 2010, with a decreasing number of workers receiving disability benefits since 2014.

The latest annual report issued by the trustees of Social Security and Medicare revealed that by 2034, the program’s trust fund will be depleted. Depletion means that Social Security recipients will no longer be receiving full scheduled benefits. Recipients would receive about three-quarters of their scheduled benefits after 2034. Congress can eventually act to fortify the program’s finances, but it may be years before it actually takes effect and funds.

Social Security’s largest costs are attributable to Medicare, which represents over 76% of Social Security benefits. The report also mentioned that Medicare’s hospital insurance fund would be depleted in 2026. The trustees noted that the aging population of the country has placed additional pressure on both the Social Security and Medicare programs. A decade ago, roughly 12% of Americans were age 65 or older, today 16% of Americans have already surpassed 65, the eligibility age for Medicare.

The Social Security Administration considers various factors in projecting its estimates, including fertility, immigration, wages, health, and economic growth. A recent drop in U.S. birthrates along with stagnant wages has placed additional burden on the viability of future benefit payments.

Sources: https://www.ssa.gov/oact/TR/2019/index.html

Oil & Retirees Drive Population Growth – Demographics

Recently released Census data revealed that the fastest growing cities in terms of population growth have been driven by the oil industry and retirees. The Census report documented population growth from July 2017 to July 2018, identifying ten of the fastest growing cities nationwide. Half of the fastest growing cities are being driven by retirees migrating in and the other half attributable to new oil industry jobs.

Midland and Odessa Texas were among the fastest growing cities, with numerous oil industry jobs attracting people from all over the country. Midland saw a 4.2% population gain for the annual period ending July 2018, as the region’s rich petroleum and natural gas deposits boosted the economy and drew workers in seeking new jobs.

Retirement communities including Myrtle Beach, St. George and The Villages, all saw an influx of retirees. These communities have become attractive for seniors providing essential services and amenities all within a single location.

Various factors have historically affected population growth throughout the United States including demographics, local industry and the economy. An aging baby boom generation along with job development in the oil sector has been the primary driver of growth for the nation’s fastest growing cities. (Source: Census Bureau)