27 Comments

sd
September 17th, 2012 | 5:54 pm

In general I agree very much with this post. The “47%” meme is deceptive and uncharitable for the reasons you cite.

That said, the meme as such does hint at a couple of points that I do think are fair game for debate:

1) The income tax system is already highly progressive. The much discussed “1%” does make a disproportionate share of national income, but they also pay an even more disproportionate share of national income taxes. It is perfectly reasonable to argue that the tax system should be even more progressive than it is now, but lefty rhetoric about the need to make the rich pay their “fair share” masks the fact that the rich already pay an overwhelming share of total taxes.

2) It is generally not healthy to have a system where the taxes paid by lower income households (mainly payroll, sales and property taxes) exist in a different “system” from the taxes paid by higher income households (mainly income taxes). Reason being – it makes it difficult to either lower taxes in a way that benefits everyone or raise taxes in a way that spreads the sacrifice.

On those line, the “47″ meme does get at something important – to the extent that nearly half of the population doesn’t pay income taxes, then nearly half of the population doesn’t face any dis-incentive to see income tax rates raised. That’s not healthy. All voters should face a tradeoff between low taxes and high government spending. You can still accomplish that goal within a highly progressive system.

Bernard Gasper, CPA
September 17th, 2012 | 6:48 pm

As a Certified Public Accountant, I find this sentence disconcerting:

“There are a few problems with this idea, but the most obvious is that Americans who pay no income taxes do pay a battery of other taxes, including sales tax, property tax, and payroll tax.”

There is no federal sales tax, or property tax levied against individual taxpayers. Prior to dismissing a sentence as “dangerously misleading”, one should have their facts in order.

The danger in having large percentages of people (where it’s 37, 47 or 57 percent) exempted from paying taxes, is that they experience no costs of government and no thought of the difficulties their demands make on others. This is especially true when politicians can dispense benefits and results in a government that grows without limit-which is the root cause of such things as the HHS mandate.

As an aside the “dangerously misleading” part of the statistic is that it fails to mention that a significant number of individuals, not only do not pay federal income tax, but are net recipients-which further sets some citizens against others.

Jack Perry
September 17th, 2012 | 7:39 pm

sd On those line, the “47″ meme does get at something important – to the extent that nearly half of the population doesn’t pay income taxes, then nearly half of the population doesn’t face any dis-incentive to see income tax rates raised.

Not true.

One of the big causes is the child tax credit. That is a flat, $1000/per child, refundable credit. If you have three children, and your tax liability is less than $3000, you pay no taxes. In fact, you stand a good chance of getting a partial refund of your payroll tax.

Scenario I: You get a partial refund of your payroll tax. In this case, raising income tax rates decreases your refund. That’s a disincentive to raising rates.

Scenario 2: You don’t get a partial refund of your payroll tax. We raise all tax rates in such a way that your tax liability rises above $3000. Suddenly, you’re paying income taxes. That’s a disincentive to raising rates.

Susan
September 17th, 2012 | 7:50 pm

Another reason for pointing out that 47% do not pay any federal income tax is to help people see through the class warfare nonsense against the so-called !% who already bear the burden of paying most of the federal taxes. This is an important distinction.

David Nickol
September 17th, 2012 | 8:47 pm

“It’s shocking that a candidate for president of the United States would go behind closed doors and declare to a group of wealthy donors that half the American people view themselves as ‘victims,’ entitled to handouts, and are unwilling to take ‘personal responsibility’ for their lives. It’s hard to serve as president for all Americans when you’ve disdainfully written off half the nation,” [Barack Obama's 2012] campaign manager Jim Messina said in a Monday statement.

Why anyone who is in the alleged 47% would now vote for Romney, I don’t know.

Mary
September 17th, 2012 | 9:15 pm

One notes that if the payroll tax really is a tax, that means you are not paying into a system from which you are entitled to fixed returns. So SS and Medicare going away are not reneging on a deal.

Charles
September 17th, 2012 | 9:29 pm

Disagreed. If you look at the effective rate of federal taxation (income and FICA), available from the IRS, you will notice that in recent years the lowest 40% in income pay less than a 6% effective tax rate. Again, this includes income and FICA taxes. But the employee contribution of FICA taxes should be 6.2% of income (to say nothing of ones taxable income after additional deductions). So for 40%, not only are they not paying any income taxes, their very contributions of Medicare and Social Security are being subsidized.

There are serious structural problems with our entitlements and future when the middle class votes its way into the poor’s programs.
Not only do the poor’s entitlements become bloated and ineffective, they become huge targets for fraud and exploitation for rent-seeking from various interests. The poor suffer as a result. Everyone dependent – sans the suppliers, fraudsters and public workers and their unions – on the entitlement realizes worse services.
And it doesn’t end there. The middle class loses its will to provide for itself and becomes addicted to the extra support. Many stupidly destroy utility by jumping through the various hoops just to claim the ‘gifts’. Some even pay thousands of dollars to experts in the bureaucracy and legal entanglements to collect a few hundred dollars. They begin to see politicians, their machines and the system as a necessary entities to be protected against reform, less it impact them or the collective them eligible or willing to vote.

Instead of the middle class protecting itself from inflation and socialized losses by expanding government and its protections for them, the middle class should challenge the growth of the government which pushes inflation and socializes losses. Otherwise we’ll merely build warring constituencies that are too greedy and too dependent to sustain a republic or even a civil society. We already seeing the riots in the streets of Europe as politicians are looked to for which of the constituencies they’re able to provide support for. That’s the future. It’s what the Marxists desire. The destruction from within that brings down with it the laws, traditions and virtues that currently restrain them.

Publius
September 17th, 2012 | 9:49 pm

Dependency is a disease. It saps the character of the recipient, and makes free citizens subservient to faceless government bureaucrats. Tocqueville’s soft despotism has come to pass. That’s the point.

David Nickol
September 18th, 2012 | 12:49 am

See The Right Is Wrong to Pin Obama’s Edge on Welfare State by Ramesh Ponnuru. An excerpt:

One major reason for the growth of the federal government in recent years has been that entitlement spending per beneficiary has increased, and so has the number of beneficiaries as people have retired. Yet senior citizens — who benefit from federal programs, on average, far more than younger people — have become more Republican over that same period. They actually voted for John McCain over Obama in 2008 by a slightly higher margin than they did for George W. Bush over John Kerry in 2004.

In 2010, their Republican margin increased even more, to a whopping 21 points. Pollster Scott Rasmussen told me that in his latest poll, Romney still leads among seniors by 19 points.

It’s true that Americans with low incomes — more and more of whom now receive food stamps and federally subsidized health insurance — have generally voted for Democrats over Republicans. But in 2010, these voters shifted toward Republicans even as food stamps, unemployment benefits and the like continued to increase.

Conservatives have even less reason for worrying about people who don’t pay federal income taxes. A major reason that the number of those people has grown is that a Republican-controlled Congress created, and the Bush administration expanded, a tax credit for parents. If there is any evidence that in recent years middle-class parents have become more Democratic, relative to the general electorate, I haven’t seen it.

Charles
September 18th, 2012 | 6:09 am

David, even Obama realizes his reelection is dependent on the welfare state. It’s why he’s targeting places like VA, NV and FL instead of sticking to the old blue and purple routine. Many businesses and people that live in those states are dependent upon federal government spending. They have a stake in whether the sacrifices on debt can be kicked down the road.

David Nickol
September 18th, 2012 | 6:55 am

What first ran through my mind when I saw the Romney video was, “Of course, he doesn’t really believe that. He’s pandering to a room full of rich donors.” If he believed it, he would be writing off many people who would be voting for him. (See the article by Ramesh Ponnuru I quoted above.) But after reading a lot of coverage, and particularly after watching Morning Joe this morning, I have tentatively concluded that Romney does really believe what he said, which in my opinion makes him unfit to be president. Nobody who trashes 47% of the country belongs in the White House. What could we expect from a president who seems to honestly believe that 47% of the American people are irredeemable freeloaders?

It is interesting that some of the most devastating criticism of Romney is coming from conservatives. See, for example, Makers, Takers, Taxpayers, Etc.
by Reihan Salam in National Review Online. He notes, quoting Ezra Klein, that many of the people who pay no income taxes do so because of the Reagan and Bush tax cuts and because of expanded credits for families raising children.

Steve
September 18th, 2012 | 8:02 am

Here is a nice breakdown of the demographics of the 47% by Derek Thompson of The Atlantic:

http://www.theatlantic.com/business/archive/2012/09/the-47-who-they-are-where-they-live-how-they-vote-and-why-they-matter/262506/#

Mike Melendez
September 18th, 2012 | 8:50 am

It’s a meme, ladies and gentlemen. It’s meant to make the listeners feel good. It is very similar to “those clinging to their guns and religion,” which I suspect is also about half of the population. Both are silly. However, the 47% is stated flatly. The later directly expresses an opinion. So what do I take from this? More “gotcha” politics and journalism instead of substantive policy debate. I shrug it off as one more piece of debris hiding what matters.

arty
September 18th, 2012 | 9:50 am

Allow me to provide a personal example. I have 4 small children. My family’s take-home is somewhere in the neighborhood of $40,000, which is above the median income for where I live. Last year, I got a $6,000 tax refund, which is pretty typical for the last few years. While I see some points of merit in both Romney and his critics’ positions, there is something really wrong with me getting a refund that is worth close to 1/7 of my yearly salary. Contra David, I’ll be voting for Romney (while holding my nose a bit). If Obama gets re-elected, I may consider subtracting my social security contribution from my refund next year (since I’m never, ever getting that back), and donating the difference to some worthy pro-life organization. I’ve gotta sleep at night.

David Nickol
September 18th, 2012 | 9:50 am

Mike Melendez,

Here’s a more complete version of the “guns and religion” quote from Obama.

But the truth is that our challenge is to get people persuaded that we can make progress when there’s no evidence of that in their daily lives. You go into some of these small towns in Pennsylvania, Ohio—like a lot of small towns in the Midwest, the jobs have been gone now for 25 years, and nothing’s replaced them. And they fell through the Clinton administration and the Bush administration. And each successive administration has said that somehow these communities are going to regenerate. And they have not. So it’s not surprising then that they get bitter, and they cling to guns or religion, or antipathy toward people who aren’t like them, or anti-immigrant sentiment, or, you know, anti-trade sentiment [as] a way to explain their frustrations.

Now, these are in some communities. You know, I think what you’ll find is that people of every background—there are going to be a mix of people. You can go in the toughest neighborhood, you know, working-class lunch-pail folks, and you’ll find Obama enthusiasts. And you can go into places where you’d think that I’d be very strong, and people will just be skeptical. The important thing is that you show up and you’re doing what you’re doing.

Compare to Romeny’s attitude toward the 47%:

My job is not to worry about those people. I’ll never convince them they should take personal responsibility and care for their lives.

Obama was saying he was reaching out to everyone regardless of whether he thought they would support him or not. Romney is writing off approximately half of the electorate.

People have argued that Romney is talking about campaigning, not governing. But if his attitude as a candidate is that 47% of the population are freeloaders who won’t take responsibility for their own lives, what what would his attitude as president be?

Plus as one conservative after another has pointed out, he’s just factually incorrect. Many of the people he is writing off are Republican voters, and many who don’t pay income tax moved off the tax rolls as the result of Reagan and Bush tax cuts and other tax breaks that were deliberately enacted by both liberals and conservatives to help the poor—especially the poor with children.

I had said a number of times in the past that I really wasn’t all that worried about Romney becoming president, because I didn’t believe a word he said. I assumed he was essentially a centrist and a pragmatist who, once he got into power, would put all the pandering to the right wing behind him. I still find it hard to believe he actually meant what he said, but a number of commentators have pointed out that he seems in the video to speaking with the kind of fluency and conviction he generally lacks. Maybe what we saw on the video was the real Romney.

Mary
September 18th, 2012 | 10:12 am

It’s a counter meme. Why is the fact that people move out of the 47% discredit it when the fact that people move out of the 1% doesn’t discredit the whole 99% meme thing?

bedefan
September 18th, 2012 | 10:39 am

Well, I was sitting on the fence — whether to vote Romney or some nutty 3rd party protest candidate — and this clinches it. 3rd party it is.

The quote just confirms what I’ve long suspected — that Romney is not really a conservative, but rather an Ayn Rand devotee (spiritually if not consciously) who sees non-rich people as weak and morally inferior.

I’d rather have four more years of Obama, who will at least keep social conservatives united, and who now appears to actually care about the economic well-being of families, than four years of Romney. I don’t want a president who would inject this Randian poison into the American mainstream.

pentamom
September 18th, 2012 | 10:45 am

Publius, a vast proportion of that 47% is not “dependent” in any way, shape or form. We are self-supporting income earners who, because of a combination of lower income and/or number of children fall below the set rates for marginal income tax.

That a Republican candidate now thinks it’s a problem that the lower middle class is exempt from confiscatory taxes is almost enough to make me hit the bottle.

Joe DeVet
September 18th, 2012 | 10:50 am

The whole point of reminding people about the 47% not paying income taxes is to provide some truth against the liberal fiction, flogged daily by Obama, that the rich are not paying their fair share.

It’s also worth pointing out, as other commenters have, that when something like half the voters can vote for higher taxes for others, we are in danger of killing the golden goose.

Obama gets praised in the press for his “concern” about the “middle class”, despite his mendacious charges about lack of “fairness”, and despite the fact that his “compassion” is accomplished with others’ money. Romney, by contrast, gets clobbered simply for pointing out the truth of the matter. The truth, which we have on good authority will set us free, is always the first casualty of political correctness.

If this is our culture as it has now evolved, then we will get (continue with) the leadership we deserve. Lying, corrupt and immoral.

Mrs. Jackson
September 18th, 2012 | 10:59 am

Ok, now that David Nikol has stated his reason of the day for why he thinks Mitt Romney is unfit to be president can we move on to a far more interesting revelation in Jimmy Carter’s unemployed grandson’s secret tapes? For the record, Mitt wasn’t berating the 47% – Mitt is from Detroit. Detroit is a Example A of government and Democrat party failure on people and a city in terms of creating a dependency class, failing schools, inhospitable tax rates as well as an overall decent standard of living, yet come November the voters of Detroit who outnumber the actual residents of Detroit by the 10 of thousands if not 100s of thousands, will vote 99% Democrat.

Happily for everyone, Jimmy Carter’s unemployed grandson -the guy behind the tapes – has burped up a new “secret tape” that has theological implications as well as is a completely honest and refreshing remark from a serious politician in years as well as a complete contrast to the absolute failure of the current administration’s failed middle east policy:

“I look at the Palestinians not wanting to see peace anyway, for political purposes, committed to the destruction and elimination of Israel, and these thorny issues, and I say, ‘There’s just no way.’” — Mitt Romney

To add more to the conversation, here’s Israeli PM Benjamin Netanyahu taking on CNN’s Candy Crowley this past Sunday:

“There are legitimate, peaceful purposes for enriching this uranium,” said host Candy Crowley, speaking to why Iran’s activities are allowed under international agreements.
“You think so? You think so, Candy?” Netanyahu said. “That’s like Timothy McVeigh walking into a shop in Oklahoma City and saying, ‘I’d like to tend my garden. I’d like to buy some fertilizer.’ ‘How much do you want?’ ‘Oh, I don’t know, 20,000 pounds.’ Come on, we know that they’re working toward a weapon.”

David Nickol
September 18th, 2012 | 11:39 am

It’s also worth pointing out, as other commenters have, that when something like half the voters can vote for higher taxes for others, we are in danger of killing the golden goose.

Joe DeVet,

It’s also worth pointing out that it is largely Republican policies (Reagan and Bush tax cuts), the EIC, and increased deductions for children that are responsible for people falling below the threshold for paying income taxes. And note that the wealthy got tax cuts as well. Also, tax rates are historically low right now:

Federal, state and local income taxes consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports. That rate is far below the historic average of 12% for the last half-century. The overall tax burden hit bottom in December at 8.8.% of income before rising slightly in the first three months of 2010.

It is also worth pointing out that since 1980, Americans, who seem to be so desperate to be dependent on the government, have elected Republican presidents for 20 out of the past 32 years. And with Obama the great redistributor of wealth being in office two years, the Republicans won back the House.

A few months ago the conventional wisdom was that this presidential election was the Republicans’ to lose, and if Romney keeps this up, he will lose. And if he does lose, it won’t be because greedy freeloaders were worried about losing their welfare checks.

publius
September 18th, 2012 | 12:52 pm

For those who think that we have not created a dependent class: the percentage of U.S. households receiving means tested public benefits has risen from 7 percent in 1979 to slightly more than 30 percent in 2009. This jump is not the result of an increase in unemployment, for on average the percentage of households receiving these benefits was four times greater than the unemployment rate.

The most important question of all for those defending the entitlement state: the national debt of the United States crossed the $16 trillion mark two weeks ago. How are we going to pay for this? Many of you defend this on the grounds of compassion — but is it compassionate to have our children and grandchildren pay for this crushing debt? Or will we stop the selfishness and admit that we cannot sustain this welfare state without dramatic changes. And by the way, taxing millionaires won’t dig us out of this entitlement hole.

Lynne
September 19th, 2012 | 1:48 am

Pentamom, it would seem to me that anyone in the middle-class, lower or not, should be paying at least some federal income taxes. The fact that you consider such taxes “confiscatory” seems to say a lot about your personal entitlement mentality. Why would you consider paying federal income taxes yourself “confiscatory”, but relying on those with either more income, or less children, than you to pay more in taxes so that you may pay none, not “confiscatory”?

When one has no skin in the game, the outcome of the game doesn’t matter. Given that you have children, and they and their children are the ones going to get stuck with the tab we’re running, it should matter to you. It should matter very much.

Liam
September 19th, 2012 | 8:10 am

The fastest rising segment for Medicaid assistance is…the very elderly, whose proportion of our population has increased dramatically over the past 3 decades. Lots more white-haired folks (mostly women) who have spent down their own resources (or, if better off, had lawyers transfer money to trusts before Medicare got to grab any of it; this is a trick poor and working class folks can’t afford to do . . . .), then capped out of Medicare and are now in various forms of community living on Medicaid. They are living a lot longer than actuaries would have predicted, because they took care of themselves; many now have degenerative diseases of very old age, which are expensive.

If one is saying these very elderly folks should get off their dependence on means-tested public assistance, I have a haunting two-word phrase that comes immediately to mind: death panels. The culture of life and the culture of bean-counting are not always in harmony, and sometimes are in deep dissonance. Our Lord had something to say about God’s bean-counting system being different than the one man prefers.

pentamom
September 19th, 2012 | 9:48 am

Lynne — it’s all confiscatory at current levels. I just don’t think it’s very “republican” to whine that people aren’t being overtaxed more than they are.

Who says I have no skin in the game? I simply don’t think that ensuring that more people pay more into the government black hole, rather than making EVERYONE pay less, is the path to economic health, fairness, or anything else worth having.

Publius, I never denied that there is an entitlement mentality or an entitlement problem. It’s lumping working people into the “entitlement” or “takers” pot simply because their income doesn’t rise high enough to owe taxes that I object to. Not paying income taxes is not necessarily “taking” anything, unless you’re of the leftist persuasion that dime one belongs to the government and every penny that you’re allowed to keep is by the grace of government and a “subsidy” of your family.

David Nickol
September 19th, 2012 | 4:48 pm

Lynne — it’s all confiscatory at current levels. I just don’t think it’s very “republican” to whine that people aren’t being overtaxed more than they are.

Taxes are at their lowest levels since the 1950s. It’s a fact.

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