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1 Scott A. Hodge, Both Candidates' Tax Plans Will Reduce Millions of Taxpayers' Liability to Zero (or Less) 1 (2008)

handle is hein.taxfoundation/ffbegxz0001 and id is 1 raw text is: FOUNDATION September 2008 No. 146 FISCAL FACT Both Candidates' Tax Plans Will Reduce Millions of Taxpayers' Liability to Zero (or Less) By Scott A. Hodge Almost Half of Tax Returns Could Reclaim Every Dollar Withheld During the Year One of the biggest challenges facing both John McCain and Barack Obama in their commitment to provide tax relief to working-class Americans is the simple fact that millions of them already pay no personal income taxes. According to the most recent IRS statistics for 2006, some 45.6 million tax filers-one-third of all filers-have no tax liability after taking their credits and deductions. For good or ill, this is a dramatic 57 percent increase since 2000 in the number of Americans who pay no personal income taxes. Tax Foundation estimates show that if all of the Obama tax provisions were enacted in 2009, the number of these nonpayers would rise by about 16 million, to 63 million overall. If all of the McCain tax proposals were enacted in 2009, the number of nonpayers would rise by about 15 million, to a total of 62 million overall. The tax code has always contained provisions that reduce the income tax burden for low- income workers, such as the standard deduction, personal exemption, and dependent exemption. Between 1950 and 1990, the percentage of tax filers whose entire tax liability was wiped out by these provisions averaged 21 percent. Since then, lawmakers have expanded credits-such as the earned income tax credit (EITC)-while creating a plethora of new

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