47% will pay no federal income tax
An increasing number of households end up owing nothing in major federal taxes, but the situation may not be sustainable over the long run.

NEW YORK (CNNMoney.com) -- Most people think they pay too much to Uncle Sam, but for some people it simply is not true.

In 2009, roughly 47% of households, or 71 million, will not owe any federal income tax, according to estimates by the nonpartisan Tax Policy Center.

Some in that group will even get additional money from the government because they qualify for refundable tax breaks.

The ranks of those whose major federal tax burdens net out at zero -- or less -- is on the rise. The center's original 2009 estimate was 38%. That was before enactment in February of the $787 billion economic recovery package, which included a host of new or expanded tax breaks.

The issue doesn't get a lot of attention even as lawmakers debate how to pay for policy initiatives like health reform, whether to extend the Bush tax cuts and how to reduce the deficit.

The vast majority of households making up to $30,000 fall into the category, as do nearly half of all households making between $30,000 and $40,000.

As you move up the income scale the percentages drop.

Nearly 22% of those making between $50,000 and $75,000 end up with no federal income tax liability or negative liability as do 9% of households with incomes between $75,000 and $100,000.

Of course, income taxes don't tell the whole story. Workers are also subject to payroll taxes, which support Social Security and Medicare.

When considering federal income taxes in combination with payroll taxes, the percent of households with a net liability of zero or less is estimated to be 24% this year, according to the Tax Policy Center's estimates.

A key reason why there is a zero-liability group at all is because the U.S. tax system is progressive. Those who bring in more money pay more than those lower down the income scale to support government functions such as national defense and social safety nets like Medicaid for those in need. That progressivity can be dialed up or down.

"Some think it's too progressive. Some don't think it's progressive enough," said Roberton Williams, a senior fellow at the center.

President Obama falls into the latter camp. He has proposed increasing the income tax burden on families making more than $250,000 and individuals making more than $200,000, while offering new measures to reduce the tax bite for most Americans making less.

One of Obama's proposals is to extend the 2001 and 2003 Bush tax cuts for everyone except high-income tax filers, which was the group that derived the most benefit from those cuts.

As a result, under Obama's budget, he would keep the ranks of the non-payers higher than they would otherwise be.

pop out some babies Kaffis.

pop out some babies Kaffis.

He can do that?

Heh. I fall squarely at the bottom of the range they give, and I pay *way* more than $0.

I obviously need more deductions, or something.

The vast majority of households making up to $30,000 fall into the category, as do nearly half of all households making between $30,000 and $40,000.

Yeah more kids and a home and you're set. Although not sure which range you mean?



Up to 30k seems to be 0 - 30k per year, bottom of that is 0 =p. 30-40k is only half the people and they probably have 4 kids and a house they cant afford.

With ACORN's help, he can do anything!

I am sure I could have found something better than what I have now if I worked at it for 2 years, instead of wasting 4 years learning about abstract bullshit that means nothing. I'm stuck in a **** cubicle because people peer pressured me into this **** bullshit and it **** makes me so angry.

Corporate life is a game you can't win. I don't have the guts yet to stop playing.

[Peter:] I don't like my job and I don't think I'll go anymore.
[Joanna:] You're just not gonna go?
[Peter:] Yeah.
[Joanna:] Won't you get fired?
[Peter:] I don't know. But I really don't like it and, uh, I'm not gonna go.
[Joanna:] So you're gonna quit?
[Peter:] Uh-uh. Not really. I'm just gonna stop going.
[Joanna:] When did you decide all that?
[Peter:] About an hour ago.
[Joanna:] So you're going to get another job?
[Peter:] I don't think I'll like another job.
[Joanna:] Well what are you going to do about money? Bills?
[Peter:] You know I never really liked paying bills, I don't think I'm going to do that either.

Of course I've seen office space... however I don't want to live with my parents and I don't want to be homeless.

Get yer minivan and stop *****'! There are worse things than being a corporate slave; you could be a non-profit slave, for example.

As a very wise man once said to me, "You either work for The Man, or you are The Man."

The problem with being "The Man" is that there's always another Man above you, unless you're the President.