Mitt Romney’s 47%
Mitt Romney is a terrible candidate. If elected, he may make a fantastic President, but as far as campaigns go, he fits in about a well as a figure skater on a football field. This week another political gaff has come to light: in May, Mitt Romney went on a rant about the 46.4% of Americans that do not pay federal income tax. This was videotaped in secret and released in the liberally biased blog Mother Jones. The Statistic that 46.4% of people do not pay income tax is the conservative response to President Obama’s proposition that the richest people in America “pay their fair share“. It has been the right wing rallying cry for the policy battle both sides have sides have escalated with ludicrous labels like “class warfare“. 46.4% of people not paying income tax is not an exaggeration, it is a fact; however, it is very misleading, and Patriotslog is sick of hearing it.
My issue is not as much with Mitt Romney as it is with the number in general. Though Mitt Romney classifying half the nation as welfare dependents that “rely on the government” is distasteful, the bigger problem is that people–apparently Mitt Romney included–do not understand the number. People see that nearly half the nation does not pay income tax and they get worked up into an ideological rage without actually understanding what it is that is spiking their blood pressure.
It is true that 46.4% of people do not pay income taxes, but this does not tell the whole story. Many of the 46.4% (as much as 1/5) are retired. Retirees have paid taxes for decades and now have no earned income with which to pay taxes. Also, active duty military members are given special tax credits for their service to our nation; these credits often result in them being net non-income tax payers. These two groups contribute to a significant portion of those who pay no income tax. The other elephant in the room that is not discussed when people talk about 46.4% of the nation not paying income taxes is the fact that income taxes do not tell the whole story. Most of these people still pay taxes, just not income taxes. Consider this tax breakdown: a family with one or two children that has an income under $30,000 per year. Can you live off this income? Yes, it is possible, but money will be very tight. This is why they do not pay income taxes, but they do pay taxes. For a family that is living on $30,000 per year, odds are they will have to spend the bulk of that to live; maybe even upwards of 90%. Depending on where they live, sales taxes can be between 6%-10%. For those of you not following along with a calculator at home that means they are already paying as much as 8% or more of their income in taxes. Moreover, they also have to pay payroll taxes–FICA, unemployment, etc.–on each paycheck, and state income taxes. The point is, added all together these families which pay no income tax often pay between 9%-12% of their total income in taxes. For a man like Mitt Romney who has the bulk of his income generated by investments and capital gains, he will not pay the payroll taxes that most Americans pay. Where is the public outrage that the richest people in our nation pay no Social Security and Medicare taxes! The rest of the country is letting these privileged few become dependent on the government! This is class warfare! Everyone should pay taxes! How can we let them get away with this!
In all seriousness, the math is quite simple. Mitt Romney does not pay payroll taxes, and logic tells us that because of the size of his income he does not need to spend even close to 90% of it to survive. This means Mitt Romney’s total tax rate is not much higher than the 13% he says he pays. Factor in sales taxes and it is unlikely he pays more than 15-16% in taxes. In fact we can take him at his word when he says his effective tax rate was around 15%. To break that down for those of you still do not have a calculator (who knew politics could be a math lesson?) this means Mitt Romney, for all the fuss, hardly pays any more in taxes than the “dependents” that do not pay income taxes. So the best question to ask Mitt Romney is why this is a big deal? Is it right for these people to have their income taxed at 8%-10%, therefore making them pay more in taxes than Mitt Romney would?
There are two more aspects of the 46.4% number that I find comical, if not downright hypocritical. Republicans who fuss about some not paying income taxes seem to have forgotten; it was their party that demanded tax cuts. If the political right did not have an anti-tax religious conviction many of these people would be paying income taxes. They wanted to play in the mud, then cry when they have to clean up their mess. This is the anti-tax party, isn’t it? Why is the anti-tax party crying foul over people not paying taxes? This is the kind of thing that makes liberals believe the Republicans only care about the rich. Moreover, the income tax is only responsible for about 43% of the government’s revenue anyway. The second aspect is the Republican assertion that “we do not have a revenue problem, we have a spending problem“. Despite the fact that government spending is down, Patriotslog agrees that we have a spending problem; but Republicans need to see that we do have a revenue problem as well. We are well below the historical average for revenue, but that is beside the point. If Republicans insist that we do not have a revenue problem, why are they fussing about people not paying income tax? The standard answer is going to be “because that is fare”, but we need to remember. Those not retired or in active military service pay nearly as much in taxes as Mitt Romney, so fairness is not the issue. Moreover, the same fairness argument can be made the opposite way, and in fact it has. Warren Buffett revealed that his secretary pays more in taxes than he does. Is that fair? So if fairness is not the issue, revenue is. If Republicans believe we do not have a revenue problem, why does it matter that people are not paying taxes?
There is one more thing that I think most people who get angry about 46.4% of people not paying income tax do not understand. Many of them, Mitt Romney included, think that those not paying taxes “depend on the government” for much of their needs. This may be true, welfare spending has exploded; more on that later. However the assumption is that most of those who pay no income tax depend on the government and will vote for Obama.This may not be true. Dean Lacy, Professor of Government at Dartmouth, measured the amount of government money going into states and counties compared to the amount of money paid out in taxes. He found that states and counties that vote heavily Republican actually receive much more federal money as compared to the taxes they pay than do counties or states that vote heavily Democratic. So it would appear that the spending problem is not dependency of Democratic voters, rather, it is Republicans mooching off the Government.
Now there is no measurement for sheer welfare spending in that study, and there are many more aspects which go into that research, so Republicans may still be right, it just does not appear so. However, Mitt Romney is right when he talks about welfare spending. It has grown exponentially–up 724% since 1960. Taking into account inflation and population growth and that number is not quite so extreme, but the point remains: welfare spending continues to grow, and if it keeps the current pace this nation will have to be a nation that takes from the rich to give to the poor. The more welfare there is the more taxes there must be in order to keep a balanced budget. This means those with money have to provide for those without–that system is not fair and can lead to major problems. We currently have more people on food stamps than any other time in history. Now, welfare is not bad, but welfare abuse is. Government welfare should only be available as a last option. The tax payers can and should support those truly in need, but the government owes it to the tax payers to ensure there are not scammers and free-loaders abusing the generosity of the American people. Welfare is growing, and that can lead to dependency, but Mitt Romney should not assume that people are dependent because they are in need. For conservatives to be upset that 46.4% of people do not pay income tax is not only hypocritical, it is misleading, and the general attitude is derogatory.
19 September, 2012
Posted on September 23, 2012, in Patriotslog Articles, Politics, Poverty and Welfare, Taxes and tagged 47% dont pay income tax, business, dependents, earned income tax credit, economy, election 2012, entitlements, federal income tax, government, payroll tax, politics. 47%, tax returns, unemployment, welfare. Bookmark the permalink. 1 Comment.