Tax Free

by Russ Roberts on April 16, 2004

in The Economy

Millions of Americans pay zero taxes. According to this story from Fox News, 44 million people, roughly 1/3 of all those who file their taxes have zero tax liability because of sufficiently large deductions. Another 14 million pay zero because they don’t even have to file. Adding in dependents, children, and so on, 122 million Americans pay zero tax.

The numbers are a little misleading because these are income tax numbers. Lots of folks pay payroll tax. But the political economy of large numbers of people paying little or no tax is a bit frightening for the long-run growth of government. When you pay little or nothing for something, you tend to want a lot more of it.


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