AP: 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.
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.
“It’s not uncommon for people to think that their Social Security taxes, their 401(k) contributions, their share of employer health premiums, all of that stuff in their mind gets lumped into income taxes,” Stretch said.
But income tax rates were lowered at every income level. The changes made it relatively easy for families of four making $50,000 to eliminate their income tax liability.
Here’s how they did it, according to Deloitte Tax:
The family was entitled to a standard deduction of $11,400 and four personal exemptions of $3,650 apiece, leaving a taxable income of $24,000. The federal income tax on $24,000 is $2,769.
With two children younger than 17, the family qualified for two $1,000 child tax credits. Its Making Work Pay credit was $800 because the parents were married filing jointly.
The $2,800 in credits exceeds the $2,769 in taxes, so the family makes a $31 profit from the federal income tax. That ought to take the sting out of April 15.(IBD)
Which is why the Stealth Taxes of the Health Care Law, Cap & Trade, and the end of the “evil” Bush Tax Cuts, and others will likely not be felt until this time next year when it’s too late to “throw the bums out”.
And the people who are most worried about it are the media-dubbed “terrorists”, “racists”, “violent” people.
Funny how that worked out! 😦
And then there’s Finance Reform, also known as Intimidation 101.
You pass a reform where if the Treasury Secretary, aka Turbo Tax Geithner, “deems” (there’s that word again 🙂 ) your company “to big to fail” and on the verge of failure he can seize it. Lock, stock, and shareholder.
With no appeal and no actual reason other than he deems it so.
So He fires the company officers, he breaks up the company and sells it off, he screws the shareholders into the ground and he can do it just because he can. Under the proposals the Democrats want.
Now, you’re a big company that donates to the evil domestic terrorist organization, The Republican Party, would you get a visit from Timmy “the Hammer” Geithner or his subordinates?
Under the proposed rules he can just go in at his discretion without any oversight whatsover.
Add in “The Chicago Way” and you have Intimidation 101.
On April 21st, Congress is going to publicly flog several big companies for announcing the hundreds of billions in cost from ObamaCare out loud, embarrassing them.
It’s pay back time.
The Liberal want to their hunk of flesh.
How dare they speak the truth to the masses!
And they want to make sure you won’t do it again.
So Guido, the Union thug will come by your board room and make sure you are playing ball or you’re company may be “swimmin’ with the fishes”…
Don’t think Liberals are capable of it?
They just crammed a massively unpopular Health Care bill down your throat because THEY wanted it.
They plan to take over the Financial Sector.
They will crush you with Cap & Tax and The EPA.
They already have their own Car companies.
They own an Insurance Company.
And, the best reason of all, The End justifies the means.
So why wouldn’t they?
After all, it’s the “greedy” “selfish” rich that they are flogging.
The same “greedy” “selfish” rich that likely give you your job and also pay the vast majority of the taxes in this economy.
They also send lots of money to politicians.
So when faced with a choice of funding the opposition and potentially losing your company or just staying silent, which do you choose?
And for the people, do you stay silent? or do say something and be branded a “racist” and a “terrorist” and a violent anti-american whackjob??
Well, my choice was made a long time ago.
How about you?