Lately, we have seen good job growth numbers which has led to a reduction in the unemployment rate. At first glance, this is an encouraging sign for the economy. But when we have a closer look at data on business...
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Tax Foundation in Investor's Business Daily: A Nation of Takers
Tax Foundation President Scott Hodge has an op-ed in tomorrow's Investor's Business Daily on so-called "nonpayers," those whose federal income tax liability has been wiped out by generous deductions and credits:
We've all seen someone who brings a small salad to the potluck but piles lots of your casserole on his plate. Or, there is always one person in the lunch group who orders the most expensive meal on the menu because she knows you are all splitting the check.
The same thing happens with government. A growing number of Americans are contributing little but taking a lot, and a shrinking number are giving a lot but taking little.
Recent IRS data for 2008 reports that a record 52 million Americans -- or 36% of all filers -- filed a tax return but had no income tax liability because of the generosity of the credits and deductions that have been enacted over the past 15 years.
The tax code has always had exemptions to protect the poorest Americans from paying income taxes, but the new credits - such as the child tax credit, Making Work Pay credit, and First Time Homebuyer credit - are now exempting middle-class families from the income tax.
Remarkably, a family of four earning up to $52,000 can expect to pay no income taxes because of these various tax credits. That too is a record.
Many more of these taxpayers are now getting checks back from the IRS even though they pay no income taxes. The IRS paid out $70 billion in "refundable" checks to non-payers in 2008. In essence, lawmakers have turned the IRS into an ATM machine for welfare benefits -- and ATM now stands for Another Taxpayer's Money.
Sadly, millions of people now see April 15 as payday, not tax day.
More on nonpayers.
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