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Economy
Nearly half of US households escape fed income tax
2010-04-08
Tax Day is a dreaded deadline for millions, but for nearly half of U.S. households it's simply somebody else's problem.
"The poor" are more noble in the abstract than they are up close.
About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That's according to projections by the Tax Policy Center, a Washington research organization.
That's really close to half the population. But if you suggest that only property owners should be allowed to vote the supporters of the Gracchi will tear you apart in the street.
Most people still are required to file returns by the April 15 deadline. The penalty for skipping it is limited to the amount of taxes owed, but it's still almost always better to file: That's the only way to get a refund of all the income taxes withheld by employers.
And it's the only way to get your "earned" income credit, which is somebody who works sending the taxes he pays to somebody who doesn't.
In recent years, credits for low- and middle-income families have grown so much that a family of four making as much as $50,000 will owe no federal income tax for 2009, as long as there are two children younger than 17, according to a separate analysis by the consulting firm Deloitte Tax.
The fact that an idea makes no sense doesn't matter, as long as it can be expressed in heart-tugging terms.
Tax cuts enacted in the past decade have been generous to wealthy taxpayers, too, making them a target for President Barack Obama and Democrats in Congress. Less noticed were tax cuts for low- and middle-income families, which were expanded when Obama signed the massive economic recovery package last year. The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education. It is a system in which the top 10 percent of earners -- households making an average of $366,400 in 2006 -- paid about 73 percent of the income taxes collected by the federal government.

The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.

"We have 50 percent of people who are getting something for nothing," said Curtis Dubay, senior tax policy analyst at the Heritage Foundation.
Posted by:Fred

#11  @OldPatriot: So you think half the taxpayers are like you?

I'll bet that when you mark your ballot, you have your wallet in mind, like any good Democrat. I think Franklin said something like, "When the people find they can vote themselves money, that will be the end of the Republic." It's up to our legislators to resist such tendencies. Yeah, right.

@swksvolFF: SS and Medicare are not "Fed Income Tax".
Posted by: KBK   2010-04-08 21:45  

#10  What OP said, and some of us work our butts off but a 1 income family don't make enough to qualify but don't want others' money.

Besides, the title is BS - anyone who draws a paycheck pays into SS and MC.
Posted by: swksvolFF   2010-04-08 21:18  

#9  All right folks, back off and cool down a minute. What this doesn't say is that a lot of those people are like me - retired, living off Social security (and in my case, an Air Force retirement). I usually don't owe any income tax. My personal deductions, standard deduction, and additional deductions (my wife is over 65, and I'm totally disabled), usually cover what I bring in in taxable income. BTW, I don't qualify for "earned income credit" because I don't have any "earned" income. There are a large number of people in the same boat, and that number will grow as more and more baby boomers start to retire.

Yeah, there are a lot of people that don't pay any taxes. Some of them, like 50% of those living on welfare, tick ME off, too. So do all the so-called "fat cats" that use (and abuse) the tax laws to evade taxes. But not all of us are "getting something for nothing". A lot of us earned our current retirement the hard way, and are paying the price for it now. Don't paint with too broad a brush, or consider all of us that don't pay taxes as "cheats".
Posted by: Old Patriot   2010-04-08 17:56  

#8  I blame Bush.
Posted by: Perfesser   2010-04-08 17:25  

#7  This pretty much explains Obama's level of popular support.
Posted by: Anguper Hupomosing9418   2010-04-08 12:50  

#6  And the top 1% - the Gores, Soroses, Buffetts and other Obama symps - will more than make up for their tax hit with Obama's carbon credit trading scam.
Posted by: lex   2010-04-08 12:30  

#5  I stumbed over a pie-chart graphic from a 1985 newpaper showing the split of income and expenditure. Nearly half came from taxpayers and (almost the same)nearly half went to indiviuals.

We've been working up to this for a long time.
Posted by: Bobby   2010-04-08 12:25  

#4  If we get a national sales tax, this problem goes away.
Posted by: Nimble Spemble   2010-04-08 09:44  

#3  Wanna guess who largely carries this mis-distribution of wealth and resource creation to pay for it all? Notice how the usual suspects never get around to calling wealth and resource creation an 'entitlement'.
Posted by: Procopius2k   2010-04-08 09:03  

#2  "When the people find that they can vote themselves money, that will herald the end of the republic." -Benjamin Franklin
Posted by: eltoroverde   2010-04-08 08:59  

#1  "We have 50 percent of people who are getting something for nothing," said Curtis Dubay, senior tax policy analyst at the Heritage Foundation.

This is precisely why 44 percent still agree with the Obama administration's policies. Obama's goal is to raise this number from 50 percent to 60 percent thus create a totally dependent, democratic voting majority. If it can work in Chicago it can work nationaly and with a runaway democractic congress, he's just the man to do it.
Posted by: Besoeker   2010-04-08 05:09  

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