Frankly, my biggest reaction to Mitt Romney’s 47% blather is disgust that he’s so divorced from the 21st century that he’s apparently never heard of camera phones and YouTube.
But aside from that, the content of what he said was also appalling. First, because it was false on its face: the 47% of Obama’s base is hardly comprised entirely of people who don’t pay income taxes. But also because it keeps feeding the zombie virus to the hoary old Welfare Queen strawman that Reagan set up 30 years ago, and which has been gathering a cult of neocons around it like maggots to rotten meat ever since. (Truly, Ayn Rand deserves the credit for the original concept, but Reagan did popularize it with the masses.)
Fortunately for us, there are some smart people who looked into the actual numbers behind Romney’s reiteration of this tired old meme, and pointed out exactly how wrong he is, and they’ve illustrated these facts in some pretty graphs:
The latter, of course, proves the lie that the people receiving the most benefits are the ones voting for Obama. The former, however, is what I want to address here: namely, the idea that simply because someone doesn’t owe anything to the IRS at the end of the year, that necessarily means they’re mooching off of people who do.
This is wrong for three reasons:
1. Not paying income taxes doesn’t mean people aren’t paying other payroll taxes, usually SSI and Medicare.
2. Getting government benefits doesn’t mean you never paid into them.
3. Even if you’re getting benefits you didn’t pay into via paycheck-collected taxes, that doesn’t mean you pay no taxes at all.
Let’s examine these things one by one.
1. As illustrated by the last chart in the first link above, 28% of the population pays no income tax while still paying other payroll taxes. This means they ARE working. They’re just not making enough to owe the IRS. That takes our 47% down to about 18%
2. About 10% of the non-income-tax-paying group is elderly, i.e., people getting social security retirement benefits, and another couple percent (allowing for overlap with other segments) are getting SSI disability.
Both of these things are available only to people who have paid into the system, or to their dependents when they pass (survivor benefits.) Along with unemployment, these things are called “insurance” for a reason: as with private insurance of other kinds, we pay premiums for the purpose of getting benefits when we need them. That these premiums come from tax dollars instead of writing a check to an insurance company doesn’t change their essential nature. Whether these programs should be government-administered or private is a topic for another post, but the fact of what they are–insurance available only to those who have bought a policy–remains.
3. This leaves us with about 5-6% (roughly) who pay no income or payroll taxes. Some of these people may be independently wealthy in a way that doesn’t give them a tax bill at the end of the year (see: trust fund kids.) Some may also have managed to game the system well enough to use deductions to erase their tax bill. See: people living off of capital gains (which aren’t subject to payroll taxes) that are offset by things like mortgage interest and charity deductions. But there aren’t hard numbers to represent these two populations (that I know of), so for our purposes here, let’s assume the worst about this 5%, and decide that they’re people who have never worked a day in their lives who are living off of benefits that don’t require a payroll-deducted pay-in. AKA our friend the Zombie Welfare Queen.
Five percent. Five. Not 47.
But … here’s the other problem. Just because these people aren’t paying income or payroll taxes doesn’t mean they pay no taxes at all. On the contrary, virtually every last one of them pays sales taxes in some form or other. Many drive and therefore pay gas taxes and car-registration fees. Some may even have homes on which they pay property taxes (seems unlikely, but not actually all that much: many people live in inherited family homes that aren’t mortgaged, but for which they still must pay property taxes.) And that doesn’t count the hundreds of other little taxes factored into the retail cost of many goods, especially things like tobacco and liquor.
So, bearing that in mind, the number of people living in the U.S. who are paying no taxes whatsoever, and whose living comes solely from public benefits they never paid into is effectively zero. Absolutely no-one in this country can get by in modern life without ever buying something that has a tax built into its price, so yes, everyone is contributing in some way or other. Even “illegal” immigrants (many of whom actually DO pay payroll taxes, via spoofed SSNs–meaning they can’t file 1040s and get back anything, nor can they get any other SSN-linked benefits.)
Now, let’s turn this around. We’ve established that everyone, however poor, pays into the system. Now let’s establish that everyone, however rich, benefits from it.
That part, of course, is simple: Roads. Police and fire protection. Federal security agencies such as the FBI, CIA and NSA, not to mention the military. Libraries. Public schools. Hundreds of different agencies that ensure the safety of the things we consume, and the competency of the people who perform critical services for us. Not a single person who even sets foot in this country can say that they’ve never benefited from government services of any kind. Even people who exclusively send their kids to private schools still benefit from public schools: those schools provide educated workers for companies and free up parents to work as well, by minding their children most of the day.
The bottom line: there is no such thing as a self-made man, and no such thing as a total leech. All of us need help, and all of us do help. The only question is how that help gets collected and delivered, and how much gets collected from each person.
But that’s a subject for a different post.
ETA: if you want more hot chart action, WaPo has some good ones here about exactly who gets what benefits.