Child Tax Credit – charles' log

Author: Mandi Woodruff

N.B.: this article uses the TLA ‘TCP’ where it appears TPC would be correct.

“Of the 43% of households owing no federal income tax this year, about half simply earned too little income to qualify, including many retired workers who live on Social Security. The remaining households likely qualify for breaks via the Earned Income Tax Credit and the Child Tax Credit.

Mandi Woodruff

Business Insider

September 6, 2013

Since 2009, the percentage of Americans who pay no federal income taxes has fallen from 47% to 43%, according to a recent report by the Tax Policy Center. The catalyst for the drop is due to two factors — federal tax cuts that expired after the Great Recession and an improving economy.

These charts from the TCP break down exactly who the 43% are:

Last year, TPC’s 2009 estimate might have been the nail in the coffin for Mitt Romney‘s ill-fated bid for the Presidency after he criticized the “47%” of Americans who don’t pay federal income taxes at a fundraiser.

Like Romney, a lot of people assumed that these households were getting off tax-free across the board. That wasn’t the case then and it’s certainly not the case now.

“The notoriety of the 47 percent figure has come largely from a misunderstanding—or less charitably, a misrepresentation—of what that number actually means,” writes Robert Williams of the TCP.

Thanks to payroll taxes, it’s nearly impossible to get away completely tax-free today. In fact, “just 14% of households pay neither income nor payroll tax and two-thirds of them are elderly,” according to the TCP. And then there are taxes closer to home to consider. You’d be hard-pressed to find households who don’t get hit with state or local income, sales, and property taxes.

Of the 43% of households owing no federal income tax this year, about half simply earned too little income to qualify, including many retired workers who live on Social Security. The remaining households likely qualify for breaks via the Earned Income Tax Credit and the Child Tax Credit.

This year, the TCP put together a helpful video breaking down the 43%:

Looking ahead, the TCP estimates that the number of workers who pay no federal income taxes will continue to fall, reaching just 33% by the year 2024.”

Mandi Woodruff edits the personal finance vertical for Business Insider. Before joining BI, she covered breaking legal news for Law360.com, was a research editor at Reader’s Digest, and reported on education in her home state of Georgia.

Posted by Portside on September 6, 2013

– See more at: http://portside.org/2013-09-07/here-are-43-americans-who-dont-pay-federal-income-tax#sthash.F4Acp11u.dpuf

Emphasis Mine

See: http://portside.org/2013-09-07/here-are-43-americans-who-dont-pay-federal-income-tax

Capital Compromise – avoiding the fiscal curb.

The Bush tax cuts permanent on incomes up to $400,000 for individuals, $450,000 for couples.

An extension of unemployment benefits,

Five-year extensions of the

Earned Income Tax Credit,

Child Tax Credit,

American Opportunity Tax Credit.

The tax on capital gains and dividends will be permanently set at 20 percent for those with income above the $450,000/$400,000 threshold. It will remain at 15 percent for everyone else. (Clinton-era rates were 20 percent for capital gains and taxed dividends as ordinary income, with a top rate of 39.6 percent.)

The estate tax will be set at 40 percent for those at the $450,000/$400,000 threshold, with a $5 million exemption. That threshold will be indexed to inflation.

The sequester will be delayed for two months. Half of the delay will be offset by discretionary cuts, split between defense and non-defense. The other half will be offset by revenue raised by the voluntary transfer of traditional IRAs to Roth IRAs, which would tax retirement savings when they’re moved over.

The Alternative Minimum Tax will be permanently patched to avoid raising taxes on the middle-class.

Two limits on tax exemptions and deductions for higher-income Americans will be reimposed: Personal Exemption Phaseout (PEP) will be set at $250,000 and the itemized deduction limitation (Pease) kicks in at $300,000.

The full package of temporary business tax breaks—benefiting everything from R&D and wind energy to race-car track owners—will be extended for another year.

Scheduled cuts to doctors under Medicare would be avoided for a year through spending cuts that haven’t been specified.

(The bill also includes a nine-month farm bill extension, cleaning up after another House Republican fiasco resulting from its failure to pass a farm bill. This extension would avert what’s been dubbed the “milk cliff,” a reversion in price supports for dairy farmers to a 1948 law that could have resulted in milk prices to consumers more than doubling.

What it doesn’t do, and what will immediately hit millions of wage earners, is extend or replace the payroll tax cut with an equivalent tax break. That means that all wage earners will see an immediate hit in their paychecks, with a two percent payroll tax increase. That’s a two percent tax hike on 98 percent of the nation).

Source: http://www.dailykos.com/story/2013/01/01/1175366/-Senate-deals-on-fiscal-cliff-House-action-nbsp-pending

Tag: Child Tax Credit

Last law of the ‘fighting’ 112!