Half of All Americans Pay No Income Tax & May Get a Tax Refund Anyway
Jim Hoft Apr 17th, 2011 7:51 am
Nearly half of American households pay no taxes at all.
The AP reported:
As Monday’s tax filing deadline nears, ponder this: The super rich pay a lot less taxes than they did a couple of decades ago, and nearly half of U.S. households pay no income taxes at all .
The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992.
Over the same period, the average federal income tax rate for all taxpayers declined to 9.3 percent from 9.9 percent.
The top income tax rate is 35 percent, so how can people who make so much pay so little in taxes? The nation’s tax laws are packed with breaks for people at every income level. There are breaks for having children, paying a mortgage, going to college, and even for paying other taxes. Plus, the top rate on capital gains is only 15 percent.
so many breaks that 45 percent of U.S. households will pay no federal income tax for 2010, according to estimates by the Tax Policy Center, a Washington think tank.
The sheer volume of credits, deductions and exemptions has both Democrats and Republicans calling for tax laws to be overhauled. House Republicans want to eliminate breaks to pay for lower overall rates, reducing the top tax rate from 35 percent to 25 percent.
Also, there are millions of Americans who pay no taxes but get a refund anyway.
This redistributive policy doesn’t get a lot of media attention as you would expect.
Newsmax reported on this socialist feature to the US tax code in 2005.
A married couple with three children and $40,000 in income can take a $9,700 standard deduction and $15,500 in personal exemptions, bringing their taxable income down to $14,800. They would owe $1,505 in taxes.
But with three children, they would get $3,000 in child credits, leaving them with no taxes owed – and a $1,495 refund check.
So in today’s America you can actually receive more back from the government than you paid in during the year. That’s socialism.Source: www.thegatewaypundit.com