Note: This essay was written in January, 2013. It is being re-published here because it still has revevance on contemporary politics. Also by looking at this essay in retrospect can give us and interesting perspective of today’s political discussions.
In the 2012 election, Romney was severely criticized for saying the lower 47% of the taxpayers pay no federal taxes. Then he said they lacked personal responsibility. OK, that’s a slur against 47% of the taxpayers (around 56 million people).
However, politicians on all sides of the left-right political spectrum have some degree of truth. Otherwise they would have no following at all. So let’s try to squeeze out some truth from both Romney’s and Obama’s statements concerning the 47%.
Here is the reality of federal spending, federal taxes, and federal debt:
The top 10% of income earners pay around 90% of all federal taxes. The next 43% income earners pay almost all of the rest of the 10% of federal tax. The lowest 47% of earners pay virtually no federal tax and even get money back from federal taxes.
Thus it isn’t rocket science to understand why the top 10% of Americans feel strongly about keeping down taxes and keeping down the debt: they pay 90% of it.
It also isn’t difficult to understand why the top 53% to 90% of the income earners don’t care too much about federal spending: they only pay 10% of the taxes.
Finally, it is easy to understand that the lower 47% of wage earners generally don’t care at all about federal spending, federal tax rates, the budget deficit, or the debt: they don’t pay any of it.
In the 2012 election, when Romney and Ryan drew a line in the sand about reducing the federal budget, we can now understand how 10% of the voters strongly supported this policy, 43% of the voters didn’t care too much about it one way or the other, and 47% of the voters opposed reduced government spending. And it is easy to see who is going to win votes on this issue. President Johnson once said that the art of politics was the ability to count.
However, Romney was factually wrong when he implied that the lower 47% don’t pay any taxes. They just don’t pay any federal taxes. Incredibly, the lower 47% of income earners pay the same rate of taxes as the rich!! They all pay around 30% of their income in total taxes!!
This is because the lower 47% pay around the same rates of state and local taxes as the rich. And they pay exactly the same rates of sales tax. When all is said and done, everyone pays around the same rates of their combined taxes: 30%.
As far as the average Joe is concerned, he doesn’t care whether the taxes are state, local, or federal; he is only concerned about how much cash he has left to put in his pocket after he cashes his paycheck.
The phrase that put the final nail in Romney’s coffin was when he said that the lower 47% of the income owners didn’t take personal responsibility for themselves. As if the rich were more personally responsible?
Virtually no group of voters is exhibiting much personal responsibility. Virtually all voters simply look the other way, as we watch the country go over an economic cliff because of continuing $500 billion deficits and climbing national debt. Most of us casually shrug our shoulders as we watch the earth heating up, California going up in flames, the earth being drained of its natural resources, and the earth’s air and water being polluted.
He (man) worships at an alter
of a stagnant pool
and when he sees his reflection
he is fulfilled
man is opposed to fair play
he wants it all and he wants it his way
– Bob Dylan, License to Kill