Only 50% to Pay Federal Taxes This Year Due to Poor Economy

Forty-seven percent of Americans will pay no federal income taxes for 2009 because either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. In fact, credits for low- and middle-income families expanded to the point that a family of four making $50,000 will owe no federal income tax, as long as there are two dependent children in the house, even as the top 10% of earners making over about $350,000 paid 73% of income taxes. Even more disconcerting, while the top earners make up almost three quarters of the tax base, the bottom 40% makes a profit as their credits exceed the amount they owe. Of course, they still pay federal payroll taxes for Social Security and Medicare and state and local taxes on sales, income and property. That said, the federal income tax is the government's largest source of revenue, and the fact that this year, 50% rather than 39% of people won't pay it and may even be owed money, is alarming considering the amount of debt and continued spending.