This is an amazing campaign moment. Somehow, Mitt Romney found himself at a dinner of wealthy financiers with a video camera perched on a side table. The film is remarkable in the candid nature of Mitt Romney's comments. For example, he views Middle East peace as an impossible objective and he suggested that his objective would be just to "kick the can down the field and hope that ultimately, somehow, something will happen and resolve it."
But most remarkable comments is the utter disdain Mitt Romney's remarks show for the working poor in America. By now, many have read or heard the most widely disseminated quote, but it bears repeating here.
There are 47% of the people who will vote for the president no matter what. All right, there are 47% who are with him, who are dependent upon government, who believe that they are victims, who believe the government is responsible for them, who believe they are entitled to health care, to food, to housing, to you-name-it. That that's an entitlement. And the government should give it to them. And they will vote for this president no matter what... These are people who pay no income tax... my job is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives.
Romney's remarks conflate two very different data points. The first is the observation that 47% of the electorate have made up their mind to vote for Obama. Romney's figure of 47% is a bit higher than the number one can infer from the September 9th Washington Post-ABC poll. That poll suggests that 49% of Americans are leaning toward Obama, and 86% of that cohort have made up their mind. Therefore, according to that poll, 86% of 49%, or 43%,have made up their mind. 43% is a bit less than Romney's 47%, but the difference is, as they say, in the margin of error.
Second, Romney then conflates that 47% with the frequently cited figure from the Tax Policy Center that 47% of American households do not pay income taxes (the Tax Policy Center figure was actually 46%) and suggests that these are the same people.
The Tax Policy Center study that suggests that 46% of Americans do not pay federal income taxes has become the basis conservative outrage and demands for tax reform arguments for "broadening the tax base." The Tax Policy Center data, however, paints a somewhat different picture than the conclusions that have been reached in the public imagination and mirrored in Romney's remarks that somehow there is massive tax avoidance or inequity. Of the 46%, roughly half -- or 23% of households -- do not pay income taxes because their household income is below the minimum threshold -- approximately $26,400 for a couple with two children -- that would result in an income tax liability.
Based on Census data, the upper limit of the lowest quintile of household income distribution in the United States was $20,262 in 2011, so an income of $26,400 would place a family in the lower range of the second lowest quintile of family income distribution in the country. At that level, the Tax Policy Center research points out, standard deduction of $11,600 and four exemptions of $3,700 each eliminates their income tax liability. This half of the non-tax paying households, the Tax Policy Center research points out, pay no income because they do not earn enough money and would pay no taxes even if all tax expenditures were repealed.
The other half of the households that did not pay federal income tax -- comprising 23% of overall household units -- were recipients of tax expenditures that offset their income tax liabilities. Of that 23%, three quarters had their federal tax liabilities offset by tax credits for the elderly (44%) and tax credits for children and the working poor (30%), tax credits supported by Democrats and Republicans to ameliorate poverty in America.
Accordingly, based on the Tax Policy Center analysis, all but approximately 6% of households that pay no income taxes do so because they are working poor and elderly whose tax obligation is offset by standard deductions and targeted tax credits.
Setting aside the disdain for the poor and the elderly betrayed by Romney's remarks -- and the words in the video are actually harsher in tone than the words themselves -- the conflation of the 47% who support Obama and the 47% who don't pay taxes was noteworthy. Democrats have wondered for years about the share of the working poor who consistently vote Republican -- and who do not federal income taxes for the same reason as the working poor who vote Democrat. Yet in his remarks, Romney seems to suggest that the entire 47% who do not pay federal income taxes are lost to him.
But that is not the case. Gallup weekly tracking polls suggest that lower-income Americans have favored Obama by roughly 53% to 38% over the course of the campaign. That is to say that a large measure of those who have been written off by the Republican candidate are actually supporters. After all, as the Tax Foundation points out, the deep-red southern states have the highest percentage of "non-payers." The gap Romney faces among the working poor is notably smaller than the deficit that Romney faces among younger voters (56/34) or than the deficit Obama faces among highly religious voters (36/57).
Seeing Romney caught on camera at a fundraiser inevitably harkened back to Barack Obama's famously taped words regarding his difficulty reaching voters in economically depressed communities:
And they fell through the Clinton Administration, and the Bush Administration, and each successive administration has said that somehow these communities are gonna regenerate and they have not. And it's not surprising then they get bitter, they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustration.
Obama's remarks were notable in the paternalism demonstrated before an audience of wealthy Californians, and suggesting a sociologist's distance from the plight of the embittered masses. But on a substantive level, Obama's observation mirrored the analysis underpinning the political strategy designed by Grover Norquist, which has become the foundation of the modern Republican Party that Romney hopes to lead. What Obama saw as groups clinging to guns, to religion and to different forms of xenophobia, Norquist reframed as groups whose votes would be moved by one of those single issues -- pro-gun, pro-faith, anti-gay, anti-immigrant. From that insight, Norquist has built a dominant political force, and the working poor are an essential part of that coalition.
Where Norquist saw unique differences that matter, differences to which one can appeal regardless of income level, Romney seems to see only the undifferentiated poor, entitled masses yearning to be Democrats, and he has nothing but disdain for their plight. In Romney's self-proclaimed journey from moderate blue-state Republican to severe Republican, he seems to have lost sight of the rich complexity -- to say nothing of the fundamental decency--of the American electorate. Where are the words to inspire faith in upward mobility that is the core of the American dream and of political leaders? As with his comments on the challenge of Middle East peace, Romney appears to have written off the problem of poverty in America.
As he has pursued a campaign strategy that lacks a positive message beyond I am not Barack Obama, one of Romney's problems is that people still do not know who he is. This leaves him vulnerable to having this video define him. But the greatest problem this video presents for Romney is not with undecided voters, but within the Republican Party itself. Romney's words of disdain for working Americans -- particularly spoken with such contempt -- are so at odds with the inspiring optimism that for the party faithful was the hallmark of Ronald Reagan.
That optimism and faith in the American dream -- however more distant that dream may have become -- has been central to the success of the Republican Party, much to the chagrin of Democrats, in garnering broad support from Americans across income groups. In casting aside 47% of the country -- particularly in a room of fellow plutocrats -- Romney has realized the worst fears of many in the Republican Party. Weekly Standard senior writer Stephen Hayes said it best when he suggested that if Romney really believes "those people" to be so totally irredeemable, he should not be running for president.
Dave Johnson: The Real Question: WHY Don't People Make Enough to Pay Income Taxes?
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 |
|
| Obama | Romney | |
|---|---|---|
| Electoral Votes (270 to win) |
332 | 206 |
| Obama | Romney | |
|---|---|---|
| Total | 65,899,660 | 60,932,152 |
| Percent | 51.1% | 47.2% |
| Democrats* | Republicans | |
|---|---|---|
| Current Senate | 53 | 47 |
| Seats gained or lost | +2 | -2 |
| New Total | 55 | 45 |
| Democrats | Republicans | |
|---|---|---|
| Seats won | 201 | 234 |
How out of touch can you get, Mr. Romney, to just write off 47% of America!
obama is scamming you and making you believe you are a victim... and its so easy for you to believe it isnt it, sure beats earning your keep. Useless people.
You my friend are way out of touch with reality.
No one is buying your argument who has a shred of knowledge of demographics or is not already keen on the Romney plan to spread to wealth to the already wealthy.
Romney's very words make you lame attempt at apologetics bee ess.
Those words express disdain and you denying that fact only makes you less credible.
Solution: eliminate the payroll tax, and tax all income equally, including capital gains. Fund SS and Medicare from that. Right now trust fund kids don't pay into SS, but their fund may run dry by age 65. Tax their trust-fund income, then they'll get SS like everyone else.
And eliminate deductions for 401Ks and pensions, use the money to fund SS instead. Those with 401Ks or pensions don't need SS, and are willing to vote to eliminate it. 401Ks are a Trojan Horse, intended to destroy SS. Fortunately the market tanked, so nobody can retire on them. That will save SS.
People who live off their investment income and report large investment losses in a given year may be able to offset the taxes owed on their investment gains Or they may have gotten a lot of their income from tax-free investments, such as municipal bonds.
A wealthy tax filer may report a lot of dividend income from foreign stocks on which he already paid tax to a foreign government. He would get a foreign tax credit on his U.S. return, to avoid double taxation. And if his foreign tax bill tops his U.S. tax bill, he wouldn't owe anything to the IRS on that dividend income.
Add in some charitable contributions and other tax breaks to any of these scenarios, and a tax filer could whittle down his federal income tax bill to zip.
Now doesn’t that sound more like Romney and people in his income bracket are the real problem?
Median income for an individual is about $25,000 a year. For a family, about $50,000 a year. Before taxes.
If you have a job, you pay about 15% off the top for Social Security, Medicare, disability and unemployment insurance. Once you've taken your deductions and credits, below median income you pay little or nothing in income taxes, and that's just the way the Tax Code is set up.
47% of Americans don't pay income taxes because they don't earn enough money to owe income taxes.
There are plenty of people going hungry (Kauia) but despite many court decisions across the country holding that panhandling is a free-speech right, in most cities and towns the cops will run the panhandlers off, ticket them, or arrest them, on the theory that they can't afford a lawyer, they aren't going to do anything about it, and they're unsightly.
Millions of Americans depend on the "underground economy" for survival.
America has been running a trade deficit of about $600 billion. This means that "Romney's Americans" (the rich, the corporations) have de facto deported about 18 million American jobs to other countries, which is the No 1 reason why America has so many unemployed and underemployed Americans.