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Where the 47 Percent Live

Was Mitt Romney correct in a recently surfaced videothat 47 percent of the voting public pay no federal income tax? The figure that he cited originates from a 2011 study conducted by the Tax Policy Center.Although the figure in the study is actually 46.4 percent, the basic claim is true — there is a large swath of U.S. citizens who pay no federal income tax whatsoever.

Who are these people, and why are they exempt?

“They’re either paying payroll taxes or they’re the elderly,” Heather Boushey, senior economist at the Center for American Progress, said in an e-mail. “Only 7.9% of households do not pay any federal taxes, but that’s because they’re either students, on disability, or unemployed.”

These groups may not pay federal income tax, but that's different from paying no taxes whatsoever. “Everyone pays taxes of some sort,” Boushey said. “If you have a job, you pay payroll taxes. If you buy things, you pay sales taxes. And people pay taxes to their state and local governments.”

Other groups who pay no federal income tax include retirees and people earning $20,000 a year or less. “The elderly don’t have to pay income tax on their Social Security benefits, while low income workers qualify for the Earned Income Tax Credit or the Child Tax Credit,” Boushey said.

Read ahead to see the 10 states with the highest number of people who pay no federal income tax. The rankings are from the Tax Foundationand are from 2010, the nonpartisan tax research group’s most recent list.

Eight of the states are considered red, one is leaning toward President Barack Obama and one is a swing state.

By Daniel Bukszpan
Posted 20 September 2012

Wesley Hitt | Getty Images