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Who are the 47 percent?
BY CHELYEN DAVIS
By now nearly everyone has heard of Republican presidential candidate Mitt Romney's comments, in a surreptitious video from a private fundraiser, referring negatively to the 47 percent of Americans who pay no income tax.
But who are these people, and why aren't they paying income tax?
A majority of them are low-income workers, senior citizens and families with children, according to tax data. More than 70 percent of those with no tax liability in 2011 had incomes of $30,000 or less.
The numbers come from a 2011 report from the non-partisan Tax Policy Center, which says that about 76 million households in the U.S. paid no federal income tax last year.
That's not to say they didn't pay other taxes--payroll deductions for Social Security, for example.
The Tax Policy Center report says that exemptions for low incomes or dependents accounted for about half of the households that didn't pay any federal income tax in 2011. That means half of the 47 percent didn't make enough to have an income tax liability.
The other half--around 38 million--benefited from tax expenditure provisions in the tax code that negated those people's tax liabilities. Such tax expenditures include tax benefits for the elderly, who get an extra standard deduction and benefit from the fact that a portion of Social Security benefits aren't taxed. Those elderly taxpayers account for about 44 percent of the 38 million.
Also on the list of those benefiting from tax expenditures are people who get credits for their children, and people who work but don't make enough to offset their tax exemptions. Credits for children and the working poor account for 30 percent of those 38 million.
The tax expenditure category also includes people who get deductions for education and reduced rates on capital gains or dividend taxes.
According to the Tax Policy Center's report, what kind of tax exemption benefits a taxpayer most varies by income.
For those making less than $50,000 a year, the tax benefits for the elderly, children and poor are the most used. Child and education credits, and itemized deductions, most benefit those with income between $50,000 and $100,000. Those with incomes higher than $100,000 get the most use out of itemized deductions and reduced rates on dividends and capital gains.