Filing Federal Tax Returns, but Paying No Taxes
According to the March/April 2004 newsletter from the Tax Foundation (requires Adobe Reader), a new study by the organization finds that "44 million American tax returns are filed by people who owe nothing for the whole year." Who are these people who have no tax liability? This is important since their numbers are increasing. In 1980, there were 18.6 million 'zero tax filers' (19.8% of all filers), but the estimated number for 2004 is 44.0 million (33.0%).
The Tax Foundation also reports that about 14 million individuals and families "will earn some income but not enough to be required to file a tax return." They add, "Even 58 million is not the actual number of people because one tax return often represents several people." They estimate that as many as 122 Americans (44% of the U.S. population) are outside the federal income tax system.
Their 'demographic profiles' present an interesting picture of the non-tax filer and the non-paying populations.