The 47%
by Benjamin Studebaker
Recently, Mother Jones leaked a video of Mitt Romney talking to some potential donors, in which he says the following:
The video (ironically discovered by a grandson of Jimmy Carter) shows Romney claiming that 47% of Americans pay no income tax, that this 47% is dependent and has a mentality of dependency, and that he has no hope of gaining their votes. Since this amounts to almost half the electorate, he argues, it will take quite a bit of money from these donors to help him win the election. But who are the 47%? Are they really dependent welfare scroungers? That is today’s topic.
Now, it is true that 47% of Americans do not pay income taxes. The wonderful folks at the Tax Policy Centre can confirm that:
However, what Romney doesn’t mention is that most of that 47% is in employment and pays payroll taxes, the chunk of money that is withheld from workers’ wage checks to go into American programmes like Social Security and Medicare. People who are in employment, working jobs that do not pay enough to qualify for federal income tax but who do pay payroll taxes are certainly not dependent welfare scroungers. If we take them into consideration, the Tax Policy Centre shows we get this:
This leaves us with 18.1% paying no federal taxes whatsoever. Now, it would be enough to show that more than half of the people Romney accused of being dependent on government are the working poor, but we can go even further, because thanks to the Tax Policy Centre, we know that more than half of that remaining 18% are the elderly and retired:
Some of that remaining 8% is jobless college students. However, it gets even worse for Romney, because not only do most people who don’t pay income tax pay payroll tax, not only are most of the people who pay neither elderly or retired, but the people who pay no income tax are not, for the most part, Obama supporters. How do we know this? The Tax Foundation knows where they live:
Overwhelmingly, the red states in the deep south are where the highest percentage of non-income tax paying people live. Of the 10 states with the highest incidence of non-payment, only one, New Mexico, went blue in the 2008 election. Of the 10 states with the lowest incidence, 7 were blue (Wyoming, Alaska, and North Dakota were exceptions, but they are also the three least populated states in the country).
The moral of the story? Romney is not merely lacking in empathy, he either is completely ignorant of the federal tax structure or he is a deeply manipulative human being for whom facts hold little or no meaning whatsoever. In either case, we are all best off steering clear.
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Benjamin Studebaker 
I think it’s fair to say that Romney, speaking to raise funds at a dinner of like-minded fellows where he thought he had the privacy to speak like a jerk, used some statistical chicanery to illustrate his rhetorical point. This hardly makes him unique among politicians. But I think that Brookings is behaving similarly when it portrays the 28.3% who pay payroll tax as evidence that Romney is overstating his “Freeloader” claim. What is not reported in the simple pie chart is the percentage of those payroll taxes that are refunded to those who work within a comfortable stone’s throw of the poverty line. Many people who earn little, through the Earned Income credit and other vagaries of the tax code, have much or most of their payroll tax returned. Students who work summer or part-time jobs are familiar with this if they file their own tax returns and see a substantial portion of their withholding returned to them. While the working poor do pay the tax, it more or less takes the form of an interest-free loan to the government that is partially or mostly returned to them when they file.
I think Romney could silence two major complaints against his campaign by sharing his tax returns and making this argument: That the US tax code is far too complex and full of loopholes designed to support an entire industry of helping the wealthy to legally dodge much of their tax burden. He could point out that the portion of his taxes that he does pay is likely substantially above the mean, but that the code makes it possible for him to legally keep a higher portion than most would agree is fair. Call for a progressive income tax that is fair, with a minimum of legal deductions (I’d suggest allowing people deductions for donations to churches and legally established non-profits, for example) Get an Economist rather than an English teacher to establish what fair is, and keep it simple and transparent.
A strong counterpoint I’ve read to the 47% is from those who point out that The Reagan-Bush Tax cuts have greatly increased the percentage of those who pay little. Yet this is being touted as a reason that Republicans hate the poor rather than help the middle class, because the GOP seems completely inept at effectively countering the ridiculous charge that being Republican means you hate the poor and women.
When it comes down to it, I like neither candidate in this race, and I think they are more similar than different as examples of what is wrong with the american political machine in general. It’s probably moving me more towards sophicharism (sp)
Very interesting response, here are the thoughts provoked:
I think the point made there by the TPC is not so much that people who payroll tax pay a lot of taxes or carry a heavy tax burden, but that they are in employment doing jobs that our society needs done, and are not dependent on the government for handouts.
I agree that a release of the tax returns and calling for a progressive income tax with fewer loopholes would be helpful to Romney (and the country as a whole), but unfortunately Romney’s tax plan as constructed calls for a flatter, less progressive, more regressive tax system.
The left’s criticism of the R/B Tax cuts I think has more to do with the distribution of the cuts (some of the cut goes to the poor and middle classes, but larger parts of the cuts go to people in higher brackets) and with the desire on the part of the right to cut taxes further while simultaneously calling for broad spending cuts. Romney’s tax plan, as currently constructed, would lower taxes on the top 5% and raise them on the bottom 95%.
I agree that painting the right as anti-women and anti-poor is a misrepresentation–especially with regard to women. Social conservatives have strong ethical positions on that happen to impact women, but the source for those positions is their values, not misogyny. With the poor the right seem to believe in a set of policies that do not directly do anything for the poor, but genuinely maintain that the poor will eventually benefit. I don’t think the poor generally benefit, at least not in comparison with the policies offered by the left, but the sentiment seems genuine.
You’re quite right that the similarities between the two grossly outweigh the differences (despite efforts by the media to draw distinctions), and sophiarchism gets more attractive by the day.
[…] the immigrants, the Muslims). When Mitt Romney said that his party is going up against “the 47%” who do not pay income tax, the implication is that politics is a class war between the […]