Here’s who pays no federal income tax

19 Sep

By Allison Linn, NBC News

Republican presidential candidate Mitt Romney is facing a barrage of criticism?by implying that nearly half of all Americans “pay no income taxes” and would vote for President Barack Obama because they are dependent on government handouts.

Romney was secretly recorded at a closed-door private fundraiser in Florida in May as saying:?”There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it. That that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what.”

Watch the secretly-taped video.

Pieces?of?the comments were?first released?by Mother Jones on Monday.

Just who are the 47 percent?

Romney may have been referencing the nearly half of all Americans (actually 46 percent as of 2011) who pay no federal income taxes.

The Tax Policy Center, a project of the Brookings Institution and the Urban Institute, released a detailed analysis of the group in July 2011, which NBC News.com covered in a very popular Life Inc. post.

The Tax Policy Center researchers found that about half of the group is basically exempt from federal income taxes because they are low income and also may have a large family.

In a blog released not long after its report, the TPC explained that “a couple with two children earning less than $26,400 will pay no federal income tax this year because their $11,600 standard deduction and four exemptions of $3,700 each reduce their taxable income to zero.”

The other half are zeroing out their federal income tax bill with other provisions, such as itemized deductions or the child tax credit. Some are seniors who are living off Social Security.

To be clear, the people in this group are still paying taxes. They are subject to payroll taxes for things like Medicare and Social Security, federal excise taxes on things like gasoline and state and local taxes including sales taxes on items they purchase.

Not everyone who pays no federal income tax is in the lower income brackets. A separate report released last spring by the Internal Revenue Service found more than 35,000 people who made more than $200,000 in 2009 also managed to zero out their tax bills. That report noted that it generally takes a number of different credits and deductions for wealthy people to not pay any federal income taxes.

Related:?Romney: Secretly recorded?remarks?’not elegantly stated’?

{“contentId”:”13939069″,”totalVotes”:”1265″}

Do you feel like you pay a fair amount in federal income taxes?

Source: http://economywatch.nbcnews.com/_news/2012/09/18/13939069-the-47-percent-heres-who-pays-no-federal-income-tax?lite

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