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In 2011 nearly half of all American tax filers will pay no federal income taxes this year, according to data released by the Tax Policy Center.

For all you taxpayers this is a sobering thought: 76 million tax filers, or 46.4 percent of the total, will be exempt from federal income tax in 2011.

A similar percentage of filers who are mostly among the bottom 40 percent of earners, legally avoided paying federal income tax for the past several years.

More than half of income tax filers exempt from federal income tax in 2011 are in the lowest income quintile earning $16,812, less than 80 percent of the rest of the country.

There are 40.7 million nonpayers in this group which covers about 93.3 percent of the quintile, and 53.6 percent of all nonpayers overall.

The group of Americans escaping the federal income tax burden isn’t a new one. The Wall Street Journal coined the term “lucky duckies” to describe taxpayers who were exempt from income tax because they didn’t earn enough money.

However tax filers who don’t pay federal income tax still pay other taxes including payroll taxes and for excise taxes on gasoline, tobacco, alcohol, and other goods. They must also pay income tax at the state or local level.

Between 2000 and 2008 the percentage of filers who paid no federal income tax to the IRS rose from 25.2 percent to 36.3 percent. During this time a significant child credit was added to the tax code.

Read more from the Huffingtonpost.

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5 Responses to 46 Percent of Americans Are Exempt From Federal Income Tax

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  2. Good recap of the Huffington Post article. It’s a fact that surprises many Americans, but it’s true; a large percentage of Americans do not pay income taxes. While the majority of these people have low incomes, the Huffington Post article gives a breakdown showing that many nonpayers actually have middle or high incomes but their individual circumstances make them legally exempt from income taxes.

  3. C. Phelts says:

    I’m speechless that so few people pay taxes. It makes me ponder why I had not looked at this in this light previously.

  4. Marcus Fried says:

    If the Number of Tax Exempt People are growing, how is the government also growing?

  5. Ramone says:

    The Number of Tax Exempt People who Pay No IRS Income Tax is so high – i feel like a sucker.

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