61% of Americans paid no federal income tax last year, study shows

61% of Americans paid no federal income taxes in 2020: report

Fox News contributor Brian Brenberg joins ‘Kennedy’ to discuss how the pandemic impacted U.S. federal income taxes

Nearly 61% of Americans paid no federal income taxes in 2020, a temporary spike attributed to a sudden decline in income and a massive boost in government subsidies during the coronavirus pandemic, according to a new study published this week. 

Data released Wednesday by the Urban-Brookings Tax Policy Center shows that 106.8 million U.S. households owed no taxes last year – a significant jump from 2019, when 75.9 million paid no taxes. 

IRS BEGINS ISSUING UNEMPLOYMENT TAX REFUNDS TO SOME AMERICANS

"The number of households who paid no income tax last year truly was eye-popping," Tax Policy Center senior fellow Howard Gleckman wrote. "But keep in mind: It was only temporary." 

The increase stems from the pandemic-driven unemployment surge – some 20 million Americans lost their jobs when the economy shut down – and the unprecedented government response to the economic downturn, including three stimulus checks, boosted federal jobless benefits and the expanded child tax credit. 

Because the stimulus checks were designed as refundable tax credits, they significantly reduced tax liability in both 2020 and 2021, the analysis said – and in some cases, flipped some households from paying income tax to not doing so.

BIDEN'S PROPOSED 39.6% TAX HIKE WOULD HIT THESE INDIVIDUALS, FAMILIES

Essentially no household making less than $28,000 will pay federal income tax this year, nor will a majority – about 75% – of those making between $28,000 and $55,000. Among middle-income households, about 43% will pay no federal income tax. 

Still, while many households did not pay federal income tax, many Americans still owed payroll or state income taxes; the study shows that about four out of five individuals paid at least one of these taxes. Nearly everyone paid the government in another form, whether it be through state and local sales taxes, excise taxes, property taxes, or state income taxes. 

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Households that pay no federal income taxes is expected to plunge to 75 million next year, or a little less than 42%. By 2026, the number of Americans not paying any federal income tax is projected to drop to about 40% under current law. And middle-class Americans will likely see their tax liability rise in coming years; by next year, only about 21% will be non-payers. That figure is expected to drop to 18% in 2026.

Source: Read Full Article