Wednesday, October 31, 2007

42% of households paid no Fed IT in 2006

This is up from 30% in 1990.

Link

  • 57.6% of households paid income tax in 2006, meaning that 42.4% did not pay any income tax.
  • Looking at the similar JCT table for 1990, that 42% nonpayer share is up from about 30%. Some of the reasons include the expansion of the earned income tax credit (EITC), the creation and expansion of the child tax credit, and President Bush's new bottom tax rate of 10%.
  • The JCT data show that for 2006, 23 million filers received $43 billion in EITC, which is a key reason why most people at the bottom do not pay any tax.