Tax Foundation economists estimate that for tax year
, a record 42.5 million Americans who filed
a tax return (one-third of the 131 million returns filed last year) had no
tax liability after they took advantage of their credits and deductions.
Millions more paid next to nothing.…
In addition to these non-payers, roughly 15 million individuals and families
earned some income last year but not enough to be required to file a tax
return. When these non-filers are added to the non-payers, they add up to
57.5 million income-earning people who will be paying no income taxes.
Even 57.5 million is not the actual number of people because one tax return
often represents several people. When all of the dependents of these
income-producing people are counted, roughly 120 million Americans — 40
percent of the U.S.
population — are outside of the federal income tax system.
I hope you find yourself among the
lucky duckies in this
40%.
The IRS
has lost again in its battle to save the
long distance telephone service excise tax from the letter of the law.
This battle has now been fought in multiple circuit courts and the
IRS has
lost every time. They just lost again in the Sixth Circuit. When Secretary of
the Treasury John Snow testified before Congress
, he was interrogated by
Representative Jim Ramstad:
Mr. RAMSTAD. Mr. Secretary, I want to ask you
about a thorn in the side of many taxpayers, and I am referring to the
telephone excise tax. As you know, this tax was first enacted — well, it was
enacted in as a temporary tax to fund the
Spanish-American War.…
Now, in the past few years, a number of taxpayers, business taxpayers, have
challenged the
IRS’s
collection of this tax in Federal court. In fact, no fewer than three Federal
courts and a host of Federal District Courts have all ruled against the
IRS.
Can you please tell me why in the world does the
IRS
continue collecting this tax, and can you give us an indication of how long
the Government will keep litigating this issue? Mr. Secretary, why not give
it up?
[Laughter.]
Secretary SNOW. Well, I think the courts may
require us to do that very soon. You know, this is pending in the Sixth
Circuit. The Department of Justice took an appeal from the District Court. We
are awaiting that judgment. Should the judgment come down in alignment with
the prior three Federal Circuit Courts, I think the handwriting is on the
wall.
Mr. RAMSTAD. That will be the end of the
temporary tax enacted in to fund the
Spanish-American War?
Secretary SNOW. I would think the time to bring
that to an end would be upon us.
Don’t pop the champagne corks just yet. First off, maybe he was just
bullshitting. Second, this only applies to the excise tax on long distance
phone service where that service not priced by the time of the call and by the
call’s geographical distance. But this still means Uncle Sam is out several
billion dollars, so maybe it’s cork-popping time after all.
