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1 William L. E. Freeland & Scott Hodge, Tax Equity and the Growth in Nonpayers 1 (2012)

handle is hein.taxfoundation/srcaaxz0001 and id is 1 raw text is: FOUNDATION
July 20, 2012
No. 200
Tax Equity and the Growth in Nonpayers
William L. E. Freeland & Scott Hodge
Recent debates over the equity of the income tax system have centered chiefly on whether high-income
Americans are paying their fair share in taxes. There has been less discussion about the growing number of
Americans who pay no federal income tax-the so-called nonpayers.
Today, the percentage of tax filers who pay no income taxes due to the generous credits and deductions in
the tax code has reached levels not seen since the income tax became a mass tax in 1940. This trend raises
serious concerns about the equity of the U.S. tax system, the fiscal stability of the federal government, and
the political implications of disconnecting millions of citizens from the primary means of funding
government programs.
Recent IRS data reveals that in 2010, over 58 million federal income tax filers had no income tax liability
after taking deductions and credits. This amounts to nearly 41 percent of the roughly 143 million tax
returns filed that year.

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