Why you should care
We are a nation of makers and takers, and everyone thinks they’re a maker.
There he is again in a Sunday magazine, almost two years after defeat, still trying to smooth over those old Boca Raton comments. You remember:
… There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. … These are people who pay no income tax. Forty-seven percent of Americans pay no income tax. … And so my job is not to worry about those people. I’ll never convince them that they should take personal responsibility and care for their lives.
OK. Pause, knee-jerk liberals, and pause, too, cheering, conservative peanut gallery. What if these remarks had been made not by Mitt Romney, but by … Bill Clinton? Did we all drink haterade too soon?
Maybe. Because here goes: About the core, shocking claim that underlay Romney’s broadside, that 47 percent of Americans do not pay income tax, he was basically … correct. The nonpartisan Tax Policy Center explained as much before these comments were a political gaffe. In 2011, it reported, it expected 46 percent of Americans to pay no federal income tax. Who were these Americans? Half were below the income tax threshold, which, for a family of four, was $26,400. Some got refunds thanks to the earned income tax credit and the child tax credit. There were some disabled veterans. Most of the rest were elderly. Romney’s number was about right.
Perhaps this is why others in the Republican Party have gleefully picked up Romney’s shibboleth. Here is former Sen. Jim DeMint in 2013, on his first day leading the Heritage Foundation, calling out the 69.5 million Americans who depend on government benefits. And though Mitt’s running mate, Paul Ryan, now says the 47 percent remark was wrong and repudiates the “makers versus takers” rubric, Ryan’s still telling the story when he cautions against “slighting people who are dependent on government,” on Charlie Rose.
So why the outrage? It was easy to bash Romney for his silver-spoon infancy and odd woodenness, for speaking behind the nation’s back. Perhaps we had a muckraker thrill and missed the real point: There is — or should be — a generally agreed-upon notion that, as citizens, all of us should have some skin in the democracy game. And that means taxes. Uncle Sam should help those who help themselves.
Still, if you’re a stickler for numbers or just a tax nerd, it may always be hard to be in Romney’s camp on this. Turns out the vast majority of people who didn’t pay income tax (62 percent in 2011) actually did pay taxes on their wages: They’re called payroll taxes, and they bankroll Social Security and Medicare. “Everyone believes they’re in the 53 percent of people who are paying income taxes,” Elaine Maag, a veteran researcher at the Tax Policy Center, tells OZY. And that confusion is because of the payroll tax, but also because of … sales tax, gas tax, state income tax, sin tax, excise tax. We think, inevitably, of that other shibboleth. The one about death and taxes.
* This piece has been revised to reflect that disabled veterans are eligible for a federal income tax exemption.