Today Is The Best Tax Day Of Your Life

Looking back, we may all remember April 15, 2010, as the day we got off cheaply. Why a growing deficit and increased spending on health care and Social Security nearly guarantee higher tax bills in our future.

Almost nobody likes tax day, but people may look back nostalgically on tax day 2010 and those of earlier years because, almost certainly, taxes are going up in the future, and they may go up a lot. With hindsight, tax day 2010 may seem almost dreamy.

Why? For starters, almost half of U.S. households aren't paying any income taxes on their 2009 earnings. The exact figure is 47 percent, says the Tax Policy Center of the Urban Institute and Brookings Institution, two think tanks. Among elderly households, 55 percent pay no income tax; among all households with children (including those headed by single parents), the nonpaying share is 54 percent. By contrast, only 38 percent of married couples filing jointly don't pay. (Of course, this doesn't mean people pay no federal taxes; about three quarters of households pay more in Social Security payroll taxes than in income taxes.)

The personal exemption and standard deduction, combined with the child tax credit and the Earned Income Tax Credit, shield many poor and middle-class families from the income tax. In 2009 they got extra protection from President Obama's Making Work Pay tax credit, which was $400 for single workers (phasing out at $75,000 of income) and $800 for a couple (phasing out at $150,000 of income). Without that credit, probably only 40 percent of households or less wouldn't have paid income taxes. President Obama has proposed that the credit be renewed for 2011. But given the massive federal budget deficits, there's a good chance that the credit will someday expire.

GO HERE to read more.