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Infamous '47 percent' not paying federal taxes, now 43 percent

The infamous “47 percent” of households that don’t pay federal income tax has dropped a few percentage points, according to the Tax Policy Center.

The center reports that 43 percent will avoid paying the tax this year.

The center, in fact, released the 47 percent finding in 2009, but it didn’t sink into the American consciousness until last year, when Republican presidential nominee Mitt Romney was secretly videotaped at a private fundraiser apparently referring to the estimate.

He said 47 percent of Americans depend on the government, think it has a responsibility to care for them and “will vote for this president no matter what."

The remark, made in May 2012 and reported about seven weeks before Election Day, alienated potential voters and was considered a turning point in the race.

The center -- a joint venture of Washington think thanks the Urban Institute and the Brookings Institution -- said the percentage drop was largely the result of the expiration of temporary tax cuts associated with the recent recession and the improving economy paying more tax-eligible salaries.

The center also said the 47 percent figure has been misinterpreted, with Americans presuming nearly half of U.S. households pay no taxes.

While they might not pay federal taxes, most still pay Social Security and Medicare payroll taxes, state and local sales taxes, excise taxes or some other levy, the center said.

In addition, the percentage of households with no federal income tax liability will continue to fall over the next decade – dropping to roughly 33 percent by 2024, according to the center.