Ezra Klein: "This Division of 'Makers' and 'Takers' Isn't True."
http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/09/17/romneys-theory-of-the-taker-class-and-why-it-matters/
Romneys theory of the taker class, and why it matters
Posted by Ezra Klein on September 17, 2012 at 7:49 pm
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In other words, Romney is arguing that about 47 percent of the country is a taker class that pays little or nothing into the federal government but wants to tax the productive classes for free health care, food, housing, etc.
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For what its worth, this division of makers and takers isnt true. Among the Americans who paid no federal income taxes in 2011, 61 percent paid payroll taxes which means they have jobs and, when you account for both sides of the payroll tax, they paid 15.3 percent of their income in taxes, which is higher than the 13.9 percent that Romney paid. Another 22 percent were elderly.
So 83 percent of those not paying federal income taxes are either working and paying payroll taxes or theyre elderly and Romney is promising to protect their benefits because theyve earned them. The remainder, by and large, arent paying federal income or payroll taxes because theyre unemployed. But thats a small fraction of the country.
Behind this argument, however, is a very clever policy two-step thats less about who pays taxes now and more about who is going to pay to reduce the deficit in the coming years. Heres how it works.
Part of the reason so many Americans dont pay federal income taxes is that Republicans have passed a series of very large tax cuts that wiped out the income-tax liability for many Americans. Thats why, when you look at graphs of the percent of Americans who dont pay income taxes, you see huge jumps after Ronald Reagans 1986 tax reform and George W. Bushs 2001 and 2003 tax cuts. So whenever you hear that half of Americans dont pay federal income taxes, remember: Ronald Reagan and George W. Bush helped build that. (You also see a jump after the financial crisis begins in 2008, but we can expect that to be mostly temporary.)
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