During the 2008 election campaign, President Obama
proposed to create or expand a variety of refundable tax
credits, most notably his Making Work Pay credit. Refundability
was key for Obama — that’s the only way to
make credits available to people who pay little or no tax.
Critics decried the proposals, asking how you can cut
taxes for people who pay no tax. The Tax Policy Center
(TPC) estimated that, under then current law, 38 percent
of all nondependent tax units would pay no income tax
in 2009.
Earlier this year, Obama signed into law the American
Recovery and Reinvestment Tax Act of 2009 (P.L. 111-5),
which, among other things, temporarily put into place
some of the refundable credits proposed during the
campaign. TPC estimates that under the new law, 47
percent of tax units will owe no income tax in 2009

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