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Fiscal Policy: The latest data show a record number of people with no tax obligation. We also have the highest-earning nontaxpayers ever. With more riding the wagon and fewer pulling, it should soon break down.
A record number of the 142 million tax returns filed in 2008 resulted in no taxes owed, according to the Tax Foundation's analysis of the latest IRS data. About 51.6 million returns, or 36.3%, were filed by those whose deductions, exemptions and tax credits wiped out any federal income-tax obligation.
These aren't people who have overpaid their taxes or had so much withheld from their paychecks that they'll get refunds. Those people owe taxes and merely provided the government with a zero interest loan until accounts are settled. These are people who pay no taxes at all.
There's been a 59% increase in the number of nonpayers since 2000, growing from 32.6 million in 2000 to 51.6 million in 2008. In the same period, the total tax filers grew by only 10%.
Not only are fewer people paying any taxes, but also the income levels for these nonpayers have steadily risen. A family of four earning more than $50,000 can have no income tax liability after taking the standard deduction and the child tax credit.
According to the Tax Foundation, "The major elements of the Economic Stimulus Act of 2008 boosted the maximum income for nonpayers to more than $56,700" — the highest ever.
The government has continually expanded the value of benefits such as the earned income tax credit to the point where you get a check from Uncle Sam even if you paid no taxes during the year. That's what made it so laughable when the administration claimed it was cutting taxes for most Americans when nearly 40% pay no taxes to start with. These are in essence welfare checks.
The tax code was originally intended to raise sufficient revenues to pay for the essential functions of government. It has morphed into a tool for social engineering, to incentivize or even punish certain behavior, and even to redistribute wealth. That's why we call it a "progressive" tax code.
We have applauded each time taxes have been cut, most recently under President George W. Bush.
We urge that these tax cuts not be allowed to expire this year as they are scheduled to do. That would be a huge tax increase at a time we can least afford it. But each cut has been obtained through deals removing more and more Americans from the tax rolls.
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Posted By: IAmNemo(5) on 3/17/2010 | 12:30 AM ET
No taxation without representation? Consider no representation without taxation.
Posted By: Star20(5) on 3/16/2010 | 11:16 PM ET
321blastoff, I agree with you, in spirit. Unfortunately, I don't think your way will get us anywhere. If we continue as usual, the freeloaders will take more and you and I will have to carry more. I'm all for a more defensive action of looking for every tax break and every handout. That sounds counterintuitive, but it is the only way to put a stop to this madness, sooner, rather than later, when it will be much worse.
Posted By: 321blastoff(60) on 3/16/2010 | 10:15 PM ET
If citizens and workers do not pay taxes why does the government represent those people? Add the question to the census- do you pay even one dime in taxes? If not then they don't count. Be an American- pay taxes like the rest of us.
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