Steve Aftergood: CRS on Taxpayers Who Pay Nothing

Corruption, Government
Steven Aftergood

Taxpayers with Zero Income Tax Liability: Trends Over Time and Across Income Levels

An estimated 44% of U.S. households will pay no federal income tax in 2016. Some individuals or households do not pay federal income taxes because their income was below the filing threshold. Other individuals or households filingfederal income tax returns pay no federal income tax due to either structural features or special provisions in the tax code. A 2011 analysis found that of nontaxable “tax units,” about half were made nontaxable by tax expenditures (special provisions in the tax code such as credits and deductions). The other half were made nontaxable by structural features of the income tax system, namely the standard deduction and personal exemptions.

Phi Beta Iota: These seriously understates the degree to which the vast majority of potentially taxable transactions — including Wall Street currency and stock transactions, are not taxed by design.  The entire burden has been placed on the income-earning individual taxpayer and to a lesser extent often avoided, the commercial corporations.

See Also:

Graphic: Automated Payment Transaction (APT) Tax

Edgar Feige: Automated Payment Transaction Tax Update