Reply #38: In 2007 a single person with no dependents did not have to pay

[bornskeptic]

income tax if his or her AGI was below $8750. This is the amount of the standard deduction plus the personal exemption. The corresponding figure for a couple filing jointly was $17500. Actually, a single person making $10000 only in wages or salary would not have to pay, because he or she could take advantage of the EIC. For taxpayers with dependent children, the numbers go appreciably higher. Each child provides a $3400 exemption and also a child tax credit of up to $1000. A married couple filing jointly with two children and a combined income of $40000 would typically not pay any income tax. Their taxable income (AGI - standard deduction and 4 exemptions) would be $15700. From the tax tables this gives a tax of $1576, and, since this is less than $2000, it would be wiped out by the child tax credit. Taking into account itemized deductions and other possible credits, many taxpayers with considerably higher incomes do not pay federal income taxes. I don't know if the 40% figure is accurate, but it seems plausible. But of course it is ludicrous to say that people who don't pay income tax don't pay any tax, as they are nailed by al the regressive taxes.