45% of American Households Live Tax-Free

April 18, 2011  |  

(CNNMoney.com) — The fastest way to make the tax-averse incensed is to tell them that nearly half of U.S. households end up owing no federal income tax when all is said and done.  But like most statistics, it is often misunderstood — and, in the case of those trying to stir political outrage, misrepresented.  For tax year 2010, roughly 45% of households, or about 69 million, will end up owing nothing in federal income tax, according to estimates by the nonpartisan Tax Policy Center. Some in that group will even end up getting paid money from the federal government.  That does not mean such households end up paying no taxes whatsoever. For instance, those in the group still pay other taxes suchas state and local income taxes, as well as property and sales taxes.  And the group doesn’t necessarily get off scot-free when it comes to payroll taxes — which support Social Security and Medicare.

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