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1 Scott A. Hodge, Surge of Nonpayers Will Be Part of Bush Tax Legacy 1 (2009)

handle is hein.taxfoundation/ffcacxz0001 and id is 1 raw text is: OUNDATION December 4, 2009 No. 202 FISCAL FACT Surge of Nonpayers Will Be Part of Bush Tax Legacy By Scott A. Hodge During 2007, Tax Foundation economists estimate that roughly 46.6 million tax returns faced a zero or negative tax liability. These are the so-called non-payers, people whose exemptions, deductions and credits wiped out any tax that would have been due. As a result, every dollar that was withheld from their paychecks during the year was refunded. In about half the cases, substantial additional money was refunded to the tax filer, although that portion is classified as a government expenditure since it is actually welfare spending, not a tax refund. Almost a third of all tax returns, 32.6 percent of 143 million federal tax returns filed, were nonpaying in 2007, the most recent year for which IRS data is final. The percentage for 2007 is the second highest, a slight tick down from the all-time highest in 2006, when 33.0 percent of tax filers paid nothing. The percentage of tax returns with no liability was fairly low in the 1960s and again in the early 1980s. A record had been set every year since 2002, as tax cuts throughout the Bush years, especially the refundable child tax credit, pushed low-to-middle income people off the tax rolls. Federal Individual Income Tax Returns with Zero of Negative Tax Liability Number of Returns with Zero Percentage of Returns Year Returns Filed or Negative Tax with Zero or Negative Liability Tax Liability 1950 53,060,098 14,873,416 28.0% 1951 55,447,009 12,798,399 23.1% Scott Hodge is President of the Tax Foundation.

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