Question

As of 2009, the percentage of U.S. households who did not pay any Federal income tax was roughly:

a. 74 percent
b. 30 percent
c. 47 percent
d. All U.S. houses pay some Federal income tax.

Answer 1

The correct answer is that roughly 47 percent of U.S. households did not pay any Federal income tax as of 2009, due to the progressive tax system and credits like the earned income tax credit.

Step-by-step explanation:

As of 2009, the percentage of U.S. households who did not pay any Federal income tax was roughly 47 percent. This statistic came about because the progressive tax system in the United States allows for certain provisions that can result in lower effective tax rates or even negative tax burdens for the lower income quintiles. For example, the earned income tax credit can result in refunds that exceed the taxes paid, leading to negative effective income taxes. While high-income individuals also have opportunities to lower their tax liabilities, the Congressional Budget Office reports that typically, those with higher incomes pay a higher average share of their income in federal income taxes.