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Nearly Half Of US Don’t Pay Income Tax

Some surprising admissions from the Associated Press:

Nearly half of US households escape fed income tax

Recession, new tax credits have nearly half of US households paying no federal income tax

Stephen Ohlemacher, Associated Press Writer, On Wednesday April 7

WASHINGTON (AP) — Tax Day is a dreaded deadline for millions, but for nearly half of U.S. households it’s simply somebody else’s problem.

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

A radical leftwing organization formed by the redistributionists at the Urban Institute and the Brookings Institute.

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…

And how long will it be before the age of dependent children is extended to 26?

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

In 2007, about 38 percent of households paid no federal income tax, a figure that jumped to 49 percent in 2008, according to estimates by the Tax Policy Center.

In 2008, President George W. Bush signed a law providing most families with rebate checks of $300 to $1,200. Last year, Obama signed the economic recovery law that expanded some tax credits and created others. Most targeted low- and middle-income families.

Obama’s Making Work Pay credit provides as much as $800 to couples and $400 to individuals. The expanded child tax credit provides $1,000 for each child under 17. The Earned Income Tax Credit provides up to $5,657 to low-income families with at least three children

And, while the AP fails to note it, you do not have to have any children or be married to received the redistribution scheme known as the “Earned Income Tax Credit.”

From the (beyond broke) Federal Government, via the always helpful IRS:

It’s easier than ever to find out if you qualify for EITC

The Earned Income Tax Credit or the EITC is a refundable federal income tax credit for low to moderate income working individuals and families…

To qualify, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return.

The EITC has no effect on certain welfare benefits. In most cases, EITC payments will not be used to determine eligibility for Medicaid, Supplemental Security Income (SSI), food stamps, low-income housing or most Temporary Assistance for Needy Families (TANF) payments.

Will you qualify for EITC this year?

Find out if you are eligible for the Earned Income Tax Credit by answering some questions and providing basic income information using the EITC Assistant. Available in English and Spanish.

Childless Workers

You do not have to have a child to qualify for EITC, however, you must meet certain rules

That is what we call ‘social justice.’

This article was posted by Steve Gilbert on Thursday, April 8th, 2010. Comments are currently closed.

20 Responses to “Nearly Half Of US Don’t Pay Income Tax”

  1. TwilightZoned

    “Tax Day is a dreaded deadline for millions, but for nearly half of U.S. households it’s simply somebody else’s problem.”

    That somebody would be me.

    This is exactly why we do not need to exceed the 50% mark of those on the government dole. They have no vested interest in keeping taxes low for those of us who do pay, and pay dearly.

  2. proreason

    No income tax. No benefits.

    One simple change would solve the problem.

    • Right of the People

      Or even better, no taxes, no vote. That way Oblammy would have only gotten about 10% of the vote. Voting like home ownership is a privilege, not a right.

  3. David

    As a fairly low income graduate student who bought his first house this year I am one of these 40% not paying any federal taxes (directly). I don’t think this is right and I would accept paying for my fair share for defense, highways and some minimal safety net stuff. However, that being said I am not about to donate to Uncle Sam with limited resources and far better alternative causes. I know that I am in the midst of a group of people who like the idea of living free off the Government. However, I want to provide myself as an example of someone who is opposed to the tax system that benefits me. It may not be the norm, but not all of us free-loaders are the enemy. :)

    • proreason

      The problem isn’t you, David, or people like you.

      Given the huge number of deadbeats in the country, who would begrudge your temporary good fortune regarding income tax. You would be a fool to pay anything if you don’t have to.

      But the taxation system should be designed so that everybody has to pay some income tax, for the reasons we all understand. It’s similar to the real problem with the Health Care system. When something is essentially free, wise usage is discouraged.

      And Catwoman59, what a great first post from you!!! btw, the reason Obamy has a thing for slavery is that all Marxists are slavery lovers. Their real ideology is power. Marxism is just the con game they use to acquire it. “Something for nothing” sucks in the dupes. “to each according to his need” sucks in the dopes.

    • confucius

      So I have to ask, David.

      How and why did a “fairly low income graduate student” buy a house?

    • David

      How: A 20% down payment from the passing of one of the greatest women in the world (my great aunt). And a house small and cheap enough that the payment is equivalent to renting. (I am a paid graduate researcher, perks of the engineering field)
      Why: Made more economical sense then renting even if we sell at a small loss. But most importantly, the wife really wanted it!

    • confucius

      Did you get a first-time homebuyer tax credit?

    • David

      Confucius, we did apply for the credit this year although the current status is that they are waiting for us to send them something but they haven’t sent a letter yet telling us what that something is. (already sent purchase papers and I filed in early Feb). I really wrestled with applying for it. I am not happy with the way it was implemented but I am not totally against the idea of incentivizing home buying either. Our credit is going to go into a money saver account for emergencies and possibly some projects before we sell (and after I am not so busy!)

  4. Catwoman59

    Hello all! I’m new to this site; found it through a link on Google. I appreciate the up-to-the-minute news items and the chance to comment.

    David it isn’t folks like you we have a problem with. You’ll eventually climb out of that hole because you already show your work ethic by purchasing a home instead of going into Section 8 housing. Then, you, along with us, will be privileged to support the slugs who have no interest, much less motivation, to get off their fat rearends and do something useful for themselves. :(

    I am afraid, however, that Obamao’s tax schemes will break us all-which is exactly what he wants to do. Why that man has a thing for slavery is beyond me, since no country that is socialist has anything like the quality of life we do, or the innovation, or the incentive to improve one’s lot. But then again, history is full of people who think they know better than we do what is best for us.

    • TwilightZoned

      Welcome Catwoman! Pro is correct; we are kindred spirits. Everyone certainly made me feel welcome and on many occasions lifted my spirits during these dark times.

  5. Catwoman59

    Proreason thank you very much for the nice welcome!

    We MUST do whatever it takes to at least win back the House this November. I fear that if we don’t make significant gains then it will be forever too late to even try to roll any of this madness back. But we have to play it smart-and the GOP has a special talent for shooting itself in the foot. Nor can we afford a third party-I don’t blame anyone for being fed up with the two parties we have but it was Ross Perot and his third-party politics that gave us Bill Clinton; I remember it well.

    Well I need to get some household chores done so will check back later as time permits. Have a good day, all!

  6. 64dodger

    As a former CPA, in practice for over 25 years I can tell you that I turned away hundreds of scumbags that were trying to cheat the system claiming the Earned Income Credit and claiming made up dependents. I always turned them in anonymously to the IRS.

  7. wardmama4

    I have all kinds of anger over this bs – for years we got a refund. It was not that for years we had all these tricks & schemes to get away with defrauding the IRS or the taxpayers – We were taxpayers – just making so very little that we got a refund. We were not, never will be gimmie people with our hands out to get even more – we were what my parents use to call – the working poor.

    To solve the major problems in America would require repealing the 16th Amendment (Federal Income Tax) – right off. Can’t create a slave class – when you can’t use other peoples money. And it would once again – give the States Rights (the 10th Amendment) back to the States – as they would send money to DC not vise versa.

    And you end up by doing that – taking away the IRS (how many billions would that alone save) – and all the entitlement programs and the major incentive for all the illegal aliens to be here (again, how many billions would that alone save).

    And I also figured out how to solve 3 major problems in one little project – Have all the adult illegal aliens go to the borders (both North and South – they can chose) – and they use the ‘Stimulus’ funds to build all but 50 feet of the fence to close both of our borders. When they reach that last 50 feet, they get all of their family members and all their belongings and step over the border – then all the unemployed people will finish the border – Walla – border fences (which have been approved in Congress) are built, Illegals got to work and then leave without jail or court appearances and the ‘Stimulus’ money was spent on something that benefits all American citizens!

    The absolute wrong people are in Washington DC – they have no care or concern for the American people, America or anything decent and worthwhile – they only care about how much money and power that they can grab and stash away before they lose their job. And it seems in the last decade or two – they have managed to insure that losing their job – doesn’t happen all that often, simply by growing the entitlement class – which is too stupid, it seems to realize that there is a tipping point when the real ‘workers’ (hate that term, it is a communist term) of the country will either rise up and stop supporting them or can no longer support them – and the system collapses – and all just become impoverished slaves to the state.

    Problem that the Klownposse in DC and the entitlement crowd are not considering is that the real American citizen is not 1) an idiot – hence the rise of the Tea Partys etc since the uber spending of the previous Administration and the bs that went on during the endless campaign of Obama and 2) are survivors and capable of innovation, inspiration and gritty hard work that will survive a collapse (remember We The People built America and don’t want or need Uncle Obama taking care of us) and re-build America better than before.

    We just need to dismantle the only impediment in our way – the Klownposse in DC and the stupid, money sucking and responsibility draining system that they have built up. And the amazing thing is that they with their takeover of the 3 houses of power – actually went for the whole thing – thereby exposing how power mad and truly criminal they are in achieving that power – which will make this take down all the more fun.

    • TwilightZoned

      WM, I too grew up in a working poor family. Step-dad worked days, Mom worked 2nd shift while I took care of siblings, after school, since daycare was not even a consideration due to cost. Although I was not privy to the income filings I’m sure taxes also were refunded. Furthermore, welfare was considered shameful and to be avoided at all costs.

      As for the rest of your post, I couldn’t agree more. Well said.

  8. BigOil

    I find it interesting (and depressing) to track my families total tax burden by adding up the litany of taxes we pay. Between a crushing tax burden and Barry swinging his economic wrecking ball, I figure my wife and I will be working an extra 5 to 10 years.

    The Emancipation Proclamation may have freed the slaves back in 1863 – but it does nothing to prevent modern day enslavement via the US tax code.

  9. wirenut

    David, No American here is considered an enemy, we just have different points of view. We are all still American. Lose the grifters and seek the achiever’s, seek knowledge, your life will be better for it.
    It’s always worked for me, and you’ll be here often.

  10. BannedbytheTaliban

    In other words, if you have even $1 tax liability to the federal government, you pay more in taxes than 47% of America combined. Unreal.


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