In recent years, the proportion of income tax filers in the United States who are “lucky duckies” — that is to say they owe no federal income tax at all over the course of the year — rose to about ⅓ and then leveled off.
The Tax Foundation noted with alarm during the last presidential campaign that both major-party candidates were proposing tax plans that vastly increased the number of “lucky duckies.”
Now that the election is over and the new administration has added some more details to their plan, the Tax Policy Center has run the numbers to see where things stand:
| Legal Regime | |||||
|---|---|---|---|---|---|
| Current Law | 43.4% | 40.2% | 34.0% | 33.2% | 32.5% |
| Administration Baseline | 43.4% | 40.4% | 37.7% | 36.9% | 36.1% |
| Administration Budget Proposal | 43.4% | 40.4% | 39.5% | 38.7% | 37.8% |
As I understand it…
- “current law”
- is as if Congress made no changes to the tax law as it is currently written, although some provisions of the tax code have automatic changes built-in and others have expiration dates
- “administration baseline”
- is what Obama’s team is comparing their plan to — it is like the “current law” except that it assumes that Congress would certainly extend some popular features of the tax code that are set to expire
- “tax units”
- are individuals or married couples who potentially might owe taxes, but does not include dependents that are declared as such on the tax returns of other “tax units”
The Tax Policy Center also includes projections of how many “tax units” will owe neither federal income tax nor the payroll tax (a.k.a. FICA or SECA):
| Legal Regime | |||||
|---|---|---|---|---|---|
| Current Law | 11.6% | 11.5% | 11.5% | 11.4% | 11.5% |
| Administration Baseline | 11.6% | 11.5% | 11.8% | 11.8% | 11.9% |
| Administration Budget Proposal | 11.6% | 11.5% | 11.8% | 11.8% | 11.9% |
So it looks as though we’re in for another big leap in the number and percentage of Americans who pay no federal income tax. I can’t help but think of this as good news, but as I’ve said before, this presents a bit of a challenge to the war tax resistance movement, which orients itself around promoting resistance to the federal income tax — a tax that the government seems to be making it increasingly difficult to resist by the unusually crafty method of exempting people from it by the millions.
