Federal income tax is the government’s largest source of revenue making April 15th one of the most dreaded days of the year in America. With the tax deadline being tomorrow many Americans are moving swiftly to file their taxes on time to avoid penalty. Nobody enjoys paying taxes but it comes as a necessity for living in this society. “All I have to do is pay taxes and die” is a saying used by many Americans because those are two things in life that are inescapable. Even though April 15th is the most dreaded day of 2010, most U.S. households will not pay any federal income taxes for 2009 due to tax credits and tax cuts.
Over the last few years tax credits have benefited families with low and middle yearly income. A family of four with two children under the age of 17 and a household income of $50,000 will not owe any income tax for 2009. The struggling economy from 2007 to 2008 led political leaders to assist low and middle income families get through the tax season. In 2008 and 2009 President George W. Bush and President Barrack Obama signed laws expanding and creating tax credits. President Bush signed a law in 2008 that provided millions of families with rebate checks of between $300 and $1,200. Some argue these rebate checks were to small but they did assist many families struggling toward the end of 2008. In 2009 President Obama’s economic recovery law targeted middle and low income families directly increasing chances of tax credits and refunds. In addition, President Obama continued to make strides toward creating an even playing field by providing more tax breaks for all those in need. “The Making Work Pay credit provides as much as $800 to couples and $400 to individuals”. Obama then created specific laws that assisted people with Children under the age of 17. The expanded child tax credit provides $1,000 for each child under the age of 17 and the Earned Income Tax Credit provides up to $5,657 to low income families with at least three children.
President Barrack Obama appears to be using tax cuts and tax credits to assist the lower and middle class Americans. Many argue the moves Obama has made make him look socialist in nature as he attempts to raise the foundation of the lower classes and decrease the intake of the upper classes. Obama’s argument the whole time has been that wealthy Americans thrived during the years of President Bush with big tax breaks. Now is the time for the average American to gain assistance from a struggling economy that is trying to rise back to true form. However, Obama has laid down some laws that are beneficial to all classes. The President created tax credits for college expenses which allow people to gain some reward for sending their children to college. In an effort to boost the economy the President has also created credits for buying a new home encouraging millions of Americans to trust in the economy and rely on a stable mortgage and future. Americans with existing homes are encouraged to go green by earning tax credit for energy efficient renovations to windows, doors, furnaces and other appliances. Many of these credits are refundable which means if the credits exceed the amount of income taxes owed, the tax payer will receive a check from the government for the difference.
According to the Tax Policy Center 49% of households did not pay federal income taxes in 2008. The increase in tax cuts and tax credits along with the struggling economy will lead to 47% of households being exempt from paying federal income taxes this year. Continued assistance to lower class families has the potential to lead to more households being exempt from paying federal income taxes in the near future. One might ask if less people are paying federal income taxes, how will this affect the economy?a
Ohlemacher, Stephen. “47% Of Families Don’t Pay a Dime in Federal Income Tax.” Seattle Times. Seattle Times, 07 Apr. 2010. Web. 09 Apr. 2010. <http://seattletimes.nwsource.com/html/nationworld/2011551281_notaxes08.html>
