Nearly half of American households did not pay a Federal income tax this year, according to the Tax Policy Center.
According to the report, the proliferation of tax credits has increased the number of Americans who paid no income taxes or received refunds from the government. In addition, the extension of the George W. Bush-era tax breaks allowed citizens of all income brackets to save money.
For example, a family that earns between $50,000 and $75,000 saved, on average, approximately $2,000, the report concluded. Many experts believe that these extra savings will help stimulate the economy and boost consumer confidence.
Last month, Senator Orrin Hatch (R-Utah) spoke out against the plethora of tax credits that have been approved by President Barack Obama's administration.
“As a matter of fairness, wouldn’t it make more sense if all citizens paid at least something in income taxes?” asked Orrin Hatch, the top Republican member of the Senate Finance Committee, quoted by Bloomberg. “I am convinced that it would help us in our fight against excessive federal spending."
Democratic lawmakers have lobbied for higher taxes on wealthy Americans, which they say will help reduce the national deficit. Economist Bruce Bartlett told the media outlet that, politically speaking, it is easier to ask for more money from people who are already paying taxes, rather than requesting it from Americans who owe nothing.