After last year, I expected that the percentage that we would be talking about in this election was going to be either the 99% or the 1%. Turns out, I was wrong. I assume you've seen the video where Mitt Romney is talking about the 47%. If not, I'm sure you can watch it. Here's the transcript of what he said, that is responsible for most of the firestorm.
"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. That that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what. And I mean, the president starts off with 48, 49, he starts off with a huge number.
These are people who pay no income tax. Forty-seven percent of Americans pay no income tax. So our message of low taxes doesn’t connect. So he’ll be out there talking about tax cuts for the rich. I mean, that’s what they sell every four years. And so my job is not to worry about those people.
I’ll never convince them they should take personal responsibility and care for their lives. What I have to do is convince the 5 to 10 percent in the center that are independents, that are thoughtful, that look at voting one way or the other depending upon in some cases emotion, whether they like the guy or not."
Alright. So we have to ask ourselves, is it true that 47% of Americans do noy pay income tax? Well, sure. Technically, it's 46.4% in 2011. But sure, 47% or 46.4%, not a very big difference. But that number is expected to be 45.6% in 2012. In fact, it's set to decline each year that they have it projected. Of course, Romney is only talking about federal income taxes. The problem is that when we talk about federal income taxes, we are not talking about every tax. The assumption people make when they hear that 47% do not pay federal income tax, is that these people do not pay tax, at all. This is simply not true. We can look at the handy chart that FactCheck provided via the Tax Policy Center. FactCheck gives a better example of how these people still pay taxes, payroll taxes are " those taxes taken out of a paycheck by an employer to fund programs such as Social Security and Medicare. They also pay federal excise taxes, such as those on gasoline, and they may also pay state and local income taxes or property taxes." 28.3% of people who do not pay federal income taxes do actually pay payroll tax. So, we still have 18.1% of people who are not paying federal income tax or payroll tax. So, who are these 18.1% of people? Well, thanks to the handy chart from the Tax Policy Center, we see that 10.3% are the elderly and 6.9% are individuals making less than $20,000. So, less than 1% are the rest.
That's one way of looking at it. FactCheck looks at it another way. FactCheck starts at the same place, saying that 28.3% of people are paying payroll taxes and not federal income taxes. Instead, they look at the 18.1% of people who are not paying federal income taxes or payroll taxes. So, let's look at them. 22% of the people who do not pay federal income taxes receive senior tax benefits which is "the extra standard deduction for seniors, the exclusion of a portion of Social Security benefits, and the credit for seniors. Most of them are older people on Social Security whose adjusted gross income is less than $25,000." 15.2% receive tax credits for children and the working poor. That includes the child tax credit and earned income tax credit. The child tax credit was started under Bill Clinton but doubled under George W. Bush. The earned income tax credit was passed under Gerald Ford. Ronald Reagan said that the earned income tax credit was "one of the best antipoverty programs this country’s ever seen.” 2/3 of households with children who earned between $40,000 and $50,000 owed no federal income taxes. "The rest ended up owing no federal income tax due to various tax expenditures such as education credits, itemized deductions or reduced rates on capital gains and dividends. " Most of those, are in the middle to upper income bracket. The Tax Policy Center, in fact, estimates that 7,000 families making $1 million or more pay nothing for federal income taxes. It's important to note that of those paying no federal income taxes, 61% are earning between $10,000 and $50,000. 42 percent of those people do have a negative liability with the government, meaning "they got a check from the federal government due to eligibility of some form of tax expenditure." The majority of them, did not.
So, are these people going to vote for Mitt Romney, no matter what? Probably not. FactCheck works under the assumption that most of the people who do not pay federal income taxes are in the lower tax bracket. Among registered voters making less than $36,000, 37% of people indicate that they would vote for Romney. Polls say the same thing. The Rasmussen Reports show that among people making less than $30,000 per year, Romney will receive 32% of the vote. Among those who make $30,000-$50,000, he has 44% of the vote. Since we should probably look at families making between $30,000-50,000, too, for a reason stated above, Romney has 32% for families making less than $30,000 and 44% for families making $30,000-$75,000. PolitiFact rated Romney's statement as false. The Tax Foundation put out a map based on 2008 data where they looked at who is not paying the federal income tax. The top 10 states for not paying federal income taxes were: Mississippi, Georgia, Arkansas, New Mexico, Alabama, South Carolina, Louisiana, Texas, Florida, and Idaho. Predominantly, these states lean Republican.
Finally, the problem with even insisting that these people believe that they are entitled to these things is that a lot of this data that is being used to disparage Barack Obama as a welfare president is data that is easily explainable because of the recession and other factors. For instance, we've mentioned here that George W. Bush's administration actually made it easier to qualify people for food stamps.
Important to note: The Tax Policy Center spokesperson said that the data being presented is just a snapshot of a recession year. The number was high. Some of the temporary tax credits enacted by Barack Obama will be gone, soon. This is part of the reason why the Tax Policy Center projects lower amounts of people not paying federal income tax.