The combination of a down economy and various stimulus givebacks means that nearly half of Americans paid no federal income tax in 2009.
Tax Day is a dreaded deadline for millions of Americans, but for nearly half of U.S. households, it’s simply somebody else’s problem.
About 47% will pay no federal income taxes 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.
The vast majority of people who escape federal income taxes do pay other taxes, including federal payroll taxes for Social Security and Medicare, and excise taxes on gasoline, aviation, alcohol and cigarettes. Many also pay state or local sales, income and property taxes.
So, to be clear: Most everyone pays federal taxes and even more pay some kind of taxes, somewhere.
Still, the system has gotten out of whack.
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.
That’s beyond progressive. It makes both practical and moral sense to limit taxation on the poorest of the poor and practicality demands that those at the upper range of the income distribution pay more than our fair share. But, surely, people well into the middle class shouldn’t be exempted altogether from contributing to the general fund? Shouldn’t we set a floor of, say, 1% that everybody owes the treasury as a cost of citizenship?
Otherwise, we remove a stake in society from far too many people. Why should they care how much the federal government spends — or, indeed, how much it taxes — if they don’t pay their share?
