In recent years, it has been argued that the federal income tax system is flawed because a significant percentage of people do not have “skin in the game,” that is, they do not pay federal income taxes. It is true that a significant percentage of Americans do not pay federal income taxes, and that the percentage rose sharply, to slightly more than 50 percent, in 2008 and 2009 (but has fallen since). However, this does not necessarily reflect a flaw in the income tax system; instead, it can be seen as reflecting economic conditions, fundamental principles embedded in the income tax system, and a series of policy choices designed to help poor families improve their economic circumstances.