Mitt Romney’s recent remarks, secretly recorded and obtained by Mother Jones, in which he refers to 47% of the American population as self-victimizing moochers, has led to a chorus of criticism for his ineptitude as a campaigner. But what about his perception of reality? Is it true that 47% of Americans pay no federal taxes? Is it true that these non-contributing victims form the base of President Obama’s support? The following chart from the Tax Policy Center helps answer these questions.
While it’s true that almost half of Americans technically pay no federal income tax, more than 28% pay federal payroll taxes, which are basically federal income taxes that are collected separately for social security and medicare. It should be noted that payroll taxes are highly regressive and are almost always ignored in the national conversation about tax burdens. So suddenly the 47% shrinks to 18% who don’t pay taxes.
The next biggest group in the 47% are retirees who have exemptions because of their fixed (and often low) incomes. It should be noted that retirement income is still taxable – the 10.3% who pay no taxes represent the poorest of our elderly – hardly a demographic to target for being lazy moochers. Excluding the payroll tax payers and the elderly poor, the 47% collapses to 8%.
This 8% of Americans who pay no federal income tax are mostly the poorest of the poor and the unemployed. It’s all well and good to discuss ways of increasing their income so that they can enter higher tax brackets, but to say that they are not paying their fair share is a moot point. It would add very little to federal revenues and would only stifle what little spending power the poor currently have – a net drain on the economy even by Republican standards!
It should be noted that the 47% is still subject to state taxes, local taxes, sales tax and Obamacare, which is essentially another tax. Furthermore these taxes are highly regressive. When taking into account all taxes paid in the US, we essentially have a flat tax system – something libertarians have been clamoring for for decades. Pop the champagne Ron and Rand!
The other main factual problem with Romney’s remarks was the suggestion that the 47% are all Obama supporters. This caused a lot of Republicans to cringe because they know that the states with the greatest number of members of the 47% are overwhelmingly Republican states.
Granted, in the solid Republican states, Obama wins a disproportionate amount of votes among the poor, but they hardly add up to half the country. In truth, the 47% are spread throughout all 50 states and vote for both Democrats and Republicans.
Mitt Romney seems to be confused, or at least he was pretending to be confused to impress his rich friends. Either way, it was a bad idea for Mitt to denigrate half the country – many of those people are (were?) his supporters.