Study: Federal Tax Rates Dipped Due to Stimulus Tax Cuts
If you noticed your 2009 federal income tax bill was a bit lighter than normal, then you weren’t alone.
The Great Recession brought many families tough economic times, and Uncle Sam sought to help out by reducing federal income tax rates to spark economic recovery.
A recent study by the Congressional Budget Office showed that the tax reductions, coupled with a drop in household income, lead to the lowest tax rates paid by American taxpayers in 30 years. While families may have appreciated sending the IRS the smallest portion of their income since 1979, the 12 percent decline in average household income probably wasn’t anything to cheer.
Also, 2009 saw the loss of millions of jobs, so while most were able to pay their taxes to the IRS, others surely skipped out on paying their tax bills.
But not paying taxes leads to bigger debts down the line, with penalties and interest accumulating and making a bad situation worse.
After 2009, which had an average tax rate of 7.2 percent, tax rates remained at historically low levels during the next two years, according to the CBO study. That may have made it easier for some people to pay their taxes, but for those who either couldn’t afford to pay or just chose not to, they may have faced a bank levy or wage garnishment.
Working with a tax professional can help you become current with your IRS tax debts and stop the penalties and interest from choking your finances. And with the help of a tax attorney or tax professional, you may be able to lighten your tax load so it always feels like 2009.
Sign up for our newsletter and be the first to find out when exciting IRS news happens. Yes, exciting. We're really into taxes.