The days when not owing any income tax hinted of poverty are long-gone as a record 36.3 percent or 51.6 million out of 142 million federal income tax returns filed in 2008 resulted in either no payments or refunds, according to the non-profit, nonpartisan tax educational organization, the Tax Foundation.
The 51.6 million so-called "nonpayer" returns were filed by people who, because of the growing number of legally claimed exemptions, deductions and tax credits owed no income tax.
According to the Tax Foundation's report Fiscal Fact, No. 214, a family of four earning more than $50,000 can now have no income tax liability after taking only the standard deduction and the child tax credit.
"Two records were set in 2008: the most nonpayers and the highest-earning nonpayers," said Tax Foundation President Scott Hodge in a press release.
"Nonpaying status used to be a sure sign of poverty, but thanks to increased use of the tax code to deliver social benefits, incentivize behaviors and funnel money to targeted groups, middle-class families have now been pulled into the growing pool of nonpayers," said Hodge. "We're now in a situation where a record number of tax filers are completely disconnected from the cost of government."
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