Surprise! Who's not paying federal income tax?

WASHINGTON -- Amid complaints that nearly half of tax filers in the U.S. won't pay federal income taxes this year, this has been lost: Those making $75,000-$100,000 a year are the fastest-growing share of people who don't pay federal income taxes.

Not working poor people — but those who are firmly middle class.

They still make up less than 1% of the total number of income tax filers who pay no tax at all, but their overall number has exploded, from fewer than 5,000 not paying taxes in 1996 to nearly 500,000 in 2009, the most recent year of available data.

The lowest-income Americans — those who make less than $25,000 a year — account for the largest number of those not paying any federal income tax: 76% as of 2009. But that share has been decreasing for years. Meanwhile, the percentage of nontaxable returns has been growing for people with higher incomes. As of 2009, more than 20,000 filers making more than $200,000 a year — 1,470 of whom had adjusted gross income of more than $1 million — owed no income tax, a Detroit Free Press analysis showed.

On Wednesday, Senate Democrats were talking up an added 5% tax on millionaires, a proposal Republicans almost certainly will block. But as the debate on tax revenue continues, the question of who pays — and who does not — is certain to keep coming up.

Tax breaks, credits ease tax burden

In recent years, the tax code has exploded with more ways for Americans to be forgiven part of their income tax burden, so much so that more Americans seem to avoid paying taxes at all.

Well, there are still those pesky Social Security and Medicare payroll taxes, as well as various state and local sales taxes that are harder to avoid. But more middle- and even upper-income taxpayers are avoiding federal income taxes.

In recent months, estimates that as many as half of all U.S. tax filers might owe no federal income tax at all this year have caused critics to argue the issue of fairness — especially as President Obama and Democratic members of Congress push for higher taxes on wealthier earners.

Here's a look at who doesn't pay, and why.

Question: So the reports that half the U.S. doesn't pay taxes are true?

Answer: No, they're not. According to the nonpartisan Tax Policy Center in Washington, D.C., 46% of tax filers will owe no federal income tax this year. But when you figure in payroll taxes — such as those for Social Security, Medicare and unemployment — more than 80% of tax filers pay some kind of federal tax. And that doesn't include sales taxes, state taxes, local taxes, gas taxes, etc., which catch just about everyone.

Q: But almost half the filers don't pay federal income tax. How come?

A: It's because of the way the tax code is written. In 2010, a married couple filing jointly didn't have to pay any income taxes if their income was less than $18,700; couples older than 65, if their income was $20,900 or less. And even if you make more than that, the standard deduction — which goes up each year — and a myriad of other deductions and tax breaks reduce income tax exposure. In 2009, the most recent year for which Internal Revenue Service data is available, filers with adjusted gross income of less than $30,000 made up 83% of all the nontaxable returns. According to the Tax Policy Center's calculator, a couple with two kids younger than 13 that makes $30,000 would get $5,000 back under current laws.

Q: Isn't it poor people who aren't paying?