Blogosphere is abuzz about Romney’s comments about the 47 percent of Americans who do not pay income taxes, and their unwavering support for President Obama. Many economists and pundits are already reacting to the, well, incompleteness of the statement, but let me offer my simple thoughts:
1. Even though 47% of individuals may not pay federal income taxes, almost all pay some other kind of tax. This includes additional payroll taxes like Social Security (28.3% from the 47% pay other forms of payroll taxes) and sales taxes (which are paid by nearly everyone who buys stuff). See Matt Yglesias for the data.
2. Of those who pay neither federal income nor payroll taxes, the majority are elderly. This has two implications on the current conservative narrative. First, these are not decidedly Obama supporters, as seniors typically vote Republican. But second, this goes counter to the notion that individuals who do not pay taxes are lazy. Seniors do not pay taxes because they are retired. [The same logic applies to full-time students who do not pay taxes because they are in school. I wouldn’t call full-time students lazy.]
3. Finally, it’s important to note that the policies which allow 47% of Americans to pay no federal income tax have been implemented by administrations from both parties. Various tax cuts and tax credits allow many of these individuals to pay so little – and why should we fault them for responding sensibly to an incentive to pay less? Particularly when those with high incomes are defensive of their often-low tax burden?
In sum, conservatives continue to attempt to paint a picture of this near-majority of Americans who are mooching off of government, not doing their share, and who are in the President’s corner. A closer look at the numbers reveals this isn’t the case. It’s one thing to spin a story about the makeup of the electorate, but as always, the devil is in the details.