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Mitt Romney video and the 47 percent: Who doesn't pay income taxes?

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(Read caption) Monitor correspondent Liz Marlantes documents recent gaffes by politicians on the campaign trail.
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Which US households don’t pay income tax? That’s become a big issue Tuesday thanks to the leaked video of Mitt Romney dismissing them at a Florida fundraiser.

In the video GOP presidential nominee Mr. Romney talks about the difficulties of winning over people he says are “dependent” on government and see themselves as “victims.”

“Forty-seven percent of Americans pay no income tax. So our message of low taxes doesn’t connect,” he said.

Romney’s right about the non-income-taxed slice of Americans. It’s an issue that conservatives as a whole have been talking about for some time. About 46 percent of US households owed no income tax in 2011, according to an estimate from the Urban Institute-Brookings Tax Policy Center. In 2008 and 2009 – the epicenter of the Great Recession – that figure was even higher, at 51 percent.

That last figure hints at one aspect of this number – it’s been boosted quite a bit by recent hard economic times. In 2007, the figure was 40 percent, which is closer to its recent historic level.

Still, 47 percent is a lot of people. Who are they?

Well, about half of them don’t owe income tax for the simple reason that they don’t make enough money. A couple with two children with income of $26,400 had no income tax liability in 2011, due to an $11,600 standard deduction and four exemptions of $3,700 each, according to the Tax Policy Center (TPC).

“The basic structure of the income tax simply exempts subsistence levels of income from tax,” wrote TPC’s Roberton Williams in an analysis of these figures last year.

The other half of the untaxed (that’s equal to about 23 percent of total US households, just to confuse you with more figures) claims their status due to particular tax breaks.

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