Griping about high taxes? Not so fast: Federal tax bills are at historic lows this year, and for the third consecutive year, families and businesses will pay less than they did under George W Bush. The government’s take—as a share of the national economy—is its lowest since 1950, the AP reports. And we have the weak economy and an increasing number of tax breaks to thank for the fact that income tax payments will be almost 13% lower than they were in 2008.
While income tax rates are unchanged, new deductions, credits, and exemptions are added to the tax code each year, and this year, that means families with two dependent children earning up to $50,000 can avoid paying federal income taxes entirely, while lower-income families can actually make money. That’s bad news for the federal budget deficit, which is expected to reach a record $1.5 trillion this year. However, the scenario will soon change: Tax increases are expected in the next few years, and state taxes are already on the rise.
(Read more federal taxes stories.)