Tax day - Nearly half of Americans owe nothing

April 18 is a date that lives in infamy for many people as it is Tax Day, the day when income tax returns are as a result of Internal Revenue Service. Despite the resentment towards income taxes, the legal obligation nevertheless exists. Almost 50 percent of income tax filers won’t owe the government a dime.

Little over half of Americans pay taxes on income

Tax Day 2011 falls on April 18 instead of April 15. Bloomberg reports that about 45 percent of households won’t have to pay any 2010 taxes at all. The Earned Income Credit and Making Work Pay Credit are examples of exemptions and deductions that are common in the low-income households. Those who pay no income taxes are very low income or living on a fixed income for instance Social Security or disability income. Also, hardly any taxes are paid by people who make little and have kids. The average tax refund, according to CNN, was $3,003 last year.

Those making money do not pay as much

The tax burden for the wealthiest working class individuals, according to Daily Finance, has been falling for a while. From 1992 to 2007, there was a decrease in the amount of income being paid by the 400 highest paid income tax returns. It went down from 26 percent to 17 percent on average. Though the wealthiest 10 percent account for more than half the nation’s tax revenue by dollar amount and the wealthiest 5 percent account for 44 percent, the more lucrative tax breaks, such as for charitable contributions, are available to the rich. In the United States tax code, there are over $1 trillion in tax breaks. That means $8,000 to every tax payer could possibly be given as a refund. The Internal Revenue Service will not let you take it though. You’ve to “deserve” this. There is more of a chance for charges from the IRS. USA Today reports that this will be to keep everyone in line.

Developed countries typically pay more in taxes than Americans

MSNBC states that Americans really pay way less in taxes than the rest of the developed world does even though many in the U.S. like to protest or avoid taxes. The Organization for Economic Co-operation and Development, or OECD, maintains data on taxes in the developed world. According to the OECD, income tax in the United States generally averages 24 percent. In Danes, it is 48 percent; in France it is 42 percent; in Germany it is 37 percent; and in Australia it is 27 percent.

Information from

Bloomberg

bloomberg.com/news/2011-04-18/nonpayers-complicate-republican-effort-at-overhaul-of-u-s-tax-code.html

CNN

money.cnn.com/2011/01/14/pf/taxes/tax_refund/index.htm

Daily Finance

dailyfinance.com/2011/04/18/super-rich-see-federal-taxes-drop-dramatically/

USA Today

usatoday.com/money/perfi/taxes/2011-04-17-Prosecutions-of-tax-evaders-up.htm

MSNBC

msnbc.msn.com/id/42612937/ns/business-tax_tactics