Many people are beginning to wrap their minds around the House Republicans’ proposed destination-based cash-flow tax and what it means for tax reform. Most people are still looking into the tax’s impacts on trade and how...
- The Tax Policy Blog
- Shouldn't Nonpayers Also Share in Cost of Deficit Re...
Shouldn't Nonpayers Also Share in Cost of Deficit Reduction?
During his speech last night, President Obama spoke about the need for shared sacrifice in any plan to reduce the nation's debt. He insisted that some taxpayers were not paying their fair share of taxes and that they should pay more taxes as part of a balanced approach to deficit reduction.
While the target of the President's remarks were those taxpayers earning over $250,000, he could have just as well been talking about the record 51 percent of Americans who now pay no income taxes and, thus, contribute nothing to the basic cost of government. While some of these households don't earn enough to file a tax return, millions of others have been knocked off the income tax rolls because of the generosity of the credits and deductions that have been created in recent years to help "middle-class" taxpayers.
IRS data for 2009, the most recent available, shows that more than 50 million tax filers had no income tax liability after credits and deductions. This amounts to 36 percent of all filers. The table below shows the distribution of nonpayers by state.
Perhaps some of these nonpayers could share some of the sacrifice of reducing the deficit.
|Tax Year 2009||All Returns||Returns with Income Tax Liability||Returns with No Income Tax Liability||Percent with No Tax Liability|
|All Filers U.S.||141,458,638||91,002,524||50,456,114||36%|
| || || || || |
|District of Columbia||312,067||225,425||86,642||28%|
|Source: IRS http://www.irs.gov/taxstats/article/0,,id=171535,00.html|
Get Email Updates from the Tax Foundation
Join the Tax Foundation's fight for sound tax policy Go
About the Tax Policy Blog
The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.