We’re less than a week away from Tax Day. Hate April 15th? I do, and I used to think most, if not all, people did. But this might give you a different viewpoint. For nearly half of U.S. households Tax Day is simply somebody else’s problem.
This week I read an AP report that about 47% will pay NO federal income taxes AT ALL for 2009. None. That’s according to the Tax Policy Center, a Washington research organization. How can that be? A series of tax cuts and tax credits for low and middle income groups, which both parties have introduced over the past few decades.
Here’s a fascinating portion of the AP report: “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 AP report goes on to say the we have “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% of the income taxes collected by the federal government.”
The AP story goes on to say, “The bottom 40%, 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.”
Curtis Dubay, senior tax policy analyst at the Heritage Foundation told the AP, “We have 50% of people who are getting something for nothing.”
Think about that the next time you gripe about Tax Day (depending on which half you belong to, of course).