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Stephen Ohlemacher, Associated Press Writer, On Wednesday April 7, 2010, 5:38 pm EDT
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.
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.
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.
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.
The vast majority of people who escape federal income taxes still pay other taxes, including federal payroll taxes
that fund Social Security and Medicare, and excise taxes on gasoline, aviation, alcohol and cigarettes. Many also
pay state or local taxes on sales, income and property.
That helps explain the country's aversion to taxes, said Clint Stretch, a tax policy expert Deloitte Tax. He said many
people simply look at the difference between their gross pay and their take-home pay and blame the government
for the disparity.
Nearly half of US households escape fed income tax
Recession, new tax credits have nearly half of US households paying no federal income tax
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