Recent media accounts confirm the findings of a report from the Joint Committee on Taxation (JCT): a majority of American households do not pay any federal income taxes.
Almost incomprehensibly, significant numbers of both higher and lower earners are paying zero income tax. A recent Bloomberg article highlighted the fact that the “number of people who reported incomes of at least $200,000 and paid no U.S. income taxes jumped 79.5 percent in 2008 from 2007, according to an Internal Revenue Service study.”
The case for comprehensive tax reform could not be clearer. When the only path to lowering your tax bill is determined by your ability to figure out how you might qualify for a credit, deduction or loophole, then Congress must act. Congress needs to simplify the tax code, eliminate certain loopholes to lower overall tax rates, and create an economic climate that allows individuals and businesses to succeed.