America's corporate tax conundrum
Thinking about Mom in this week's tax tip

51 percent of American households paid no income taxes in 2009

Taxes are, of course, all about the numbers. Tax rates. Income brackets. What you owe the Internal Revenue Service. Any refund you might be due.

Lately, though, the focus has been on just who pays what to the U.S. Treasury.

An analysis by the Joint Committee on Taxation found that 51 percent of U.S. households did not pay any federal income tax in 2009. Some in that group were able to get money back from the Internal Revenue Service.

The report by the nonpartisan Congressional panel also noted that 30 percent of tax units actually made money off the income tax system for the 2009 tax year.

The Joint Committee pointed out that 2009's figures are not final, but the table below shows how its estimates on tax liability for that tax year break out by filing status:

Taxpayer Filing Status Total
(all numbers in millions)
Zero Income Tax Liability Qualified for Refundable Tax Credit Owed Income Taxes
Single 81.1 26.8 16.6 37.8
Head of Household



Married, filing jointly



Married, filing separately




The Joint Committee numbers are slightly larger than the recent report by the nonprofit Tax Policy Center that around 45 percent of U.S. households, or about 69 million, will end up owing no income taxes in 2010.

Again, these studies look at income taxes, not other taxes such as FICA payroll taxes that go toward the Social Security and Medicare programs.

Tax fairness hearing: This latest Congressional analysis was requested by the Senate Finance Committee in connection with its hearing yesterday on the distribution of tax benefits and burdens in the tax code.

In his opening remarks, Senate Finance Chair Max Baucus (D-Mont.) pointed out the perception by many taxpayers that loopholes and tax benefits exist mainly for the rich. This, he said, makes it difficult to achieve the goal of see a fairer and more equitable tax system.

But, as the recent reports of who pays, or doesn't pay, income taxes, shows, a large nubmer of Americans at all levels who are able to take advantage of tax breaks to lower or zero out thier taxes and even get a refund.

Reconciling the so-called tax loopholes so that everyone is satisfied, including the U.S. Treasury and the IRS which must collect the money, is no easy task.

Or, as Senate Finance Ranking Member Orrin Hatch (R-Utah) noted in his opening statement, "How Washington politicians hope to determine this fair share in an even-handed way that does no harm to our economy and job creators remains a mystery to me."

But you can bet that Hatch and his colleagues will get lots of suggestions of how to solve the tax code puzzle as the debate continues.

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Wow, not much room to lower taxes for these people, maybe they'd just like the other half to cut them a check?

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