ReAnn Rothwell’s Money Saving Ideas, Tax & Organizing Tips

I had a very interesting conversation about my post on paying no taxes the other day. I want to clarify some numbers for all of my readers.

40% of U.S citizens right now pay no federal income taxes leaving 60% of us to share the burden of our federal government and its infrastructure and programs. 10% of taxpayers provide 70% of total income tax revenue.

Does this seem fair?

Most of the non-payers are not wealthy people using tax loopholes. The majority are lower income taxpayers who are single and use the Single or Head of Household (i.e. single with dependent children) filing statuses. Some of the non-payers actually get a refund that is in fact greater than the amount of their federal withholding, due to an Earned Income Tax Credit (EITC), which is considered an anti-poverty tool. It is worth noting that these people still pay some taxes, even if they do not pay federal income tax. Non-payers of federal income tax still contribute to social security and Medicare taxes, sales tax, and excise taxes.

I am going to be very interested in how federal income tax code issues are addressed in the next year or two!