Growls

A hot topic a month ago in the mainstream media last month, according to Scott Hodge of the Tax Foundation, in the latest study (Fiscal Fact, May 24, 2010) “was the record number of Americans who filed an income tax return but had no income tax liability after taking their credits and deductions.” Hodge writes  that new IRS data allows the calculation of “the number of nonpayers in each state who filed a tax return,” and continues by saying:

“According to the latest IRS figures for 2008, a record 52 million filers—36 percent of the 143 million who filed a tax return—had no tax liability because their credits and deductions reduced their liability to zero. Indeed, tax credits such as the child tax credit and earned income tax credit have become so generous that a family of four earning up to about $52,000 can expect to have their income tax liability erased entirely.”

Hodge then writes:

“Generally speaking, the most populated states have the most nonpayers. More than 6 million tax-filing Californians paid nothing to Uncle Sam for the 2008 tax year. That was 37 percent of the 16.4 million tax filers in California.

[ . . . .]

“All of the top 10 ranking states have among the lowest median family incomes in the country. Of this group, Georgia has the highest median family income at $60,268. Mississippi has the lowest at $46,668.

“By contrast, the states with the lowest percentage of nonpayers are not as geographically concentrated. What they tend to have in common is higher incomes. Half of the 10 with the lowest percentage of nonpayers are in the Northeast and half are in the West and Northern Plains states. Alaska has the lowest percentage of nonpayers, 21 percent of filers. Massachusetts has the second lowest at 27 percent, followed by Connecticut (27 percent), New Hampshire (28 percent), and Wyoming (28 percent) to round out the bottom five.

The study includes a table with all the numerical data as well as the map below.