Everyone who is not living in solitary confinement is now aware of Mitt Romney’s secretly recorded comment that 47% of Americans pay no federal taxes and feel that they are victims and have an entitlement mentality. Most people are also aware of the onslaught of negative publicity that Romney’s comments engendered in the press, the kind of coverage that Obama might receive from the mainstream press had they caught him red-handed stealing food from an orphan. Note that I said “might.”
Romney Should Have Known Nothing Is Private
Romney made the comments to a small group of supporters as a way of pointing out the political difficulties that he faced as a candidate who is campaigning on lower taxes and free-market ideas. It is hardly earth-shattering to point out that people who don’t pay income taxes are not particularly concerned about tax rates if they are not paying them. There is not a candidate alive who would not be chagrined if all of his private comments were publicized. Candidates speak in short hand to their friends with less than normal concern about how their words can be interpreted. It’s tempting to speak in generalities in unguarded moments. Of course Romney should have known better. Nothing is private anymore; that’s probably why the Obama campaign practically strip searches for mobile phones or other recording devices when folks go to his fundraising events.
The Revelation Of Romney’s 47% Comment Was Unfortunate For A Couple Of Reasons:
He wrapped together free loaders and people who don’t want to work with people who can’t work. As his critics were quick to point out, the 47% includes those on Social Security, those who receive disability payments, and those who work but don’t make enough to reach the requirement to pay taxes. And some of these folks are Romney supporters. Incidentally, Republicans have been very supportive of taking more and more people off the tax roles, a misguided policy in my book. (A person should have to pay at least one dollar just to remind them that we are “all in this together” when it comes to things like defending our country.)
Romney critics also point out that folks that pay no income tax do pay other taxes, such as payroll taxes, state and local taxes, gasoline taxes, etc. All true. Mitt opened himself up to all of this “rich guy vs. poor people” stuff.
Social Security Is An Obligation
However, before his critics get too far into the stratosphere of indignation, a couple of things should be remembered. About 62% of those who pay no federal income tax pay payroll taxes, which, of course, fund Social Security. However, generally speaking, we get those taxes back in benefits, unlike the income tax. Social Security is a discrete obligation of the government to us. The exact amount of that obligation can legally be changed in the future but it’s an obligation none the less.
In fact, most families will get more back in Social Security benefits than they paid in. A retiree in 1960 received about seven-times more in benefits than he paid in. The differential is rapidly shrinking now (fewer workers, more retirees), but it’s still there for low-income workers and for married couples with one wage earner.
The point is that, although there is no “trust fund,” payroll taxes, at the end of the day, do not fund our national defense or other governmental functions. That is in no way to cast aspersion on Social Security recipients. They (we) are entitled to it. It’s just that folks who are paying income taxes are carrying the load, including any increased taxes necessary to shore up Social Security, which will run dry in 2033. Which brings us to a more important point.
Spending Ourselves Into Oblivion
Mitt missed an opportunity in this conversation to point out that goes to the heart of the most important problem our nation faces: We are going broke because we are spending ourselves into oblivion. Governments that have better debt to GDP ratios than the U.S. are failing all around us. European countries are trying to cut back, as is Canada. The U.S. almost stands alone in refusing to tighten its belt before disaster hits. Everyone else has acknowledged that a government can’t just increase taxes on the wealthy and save themselves. (Remember, for Obama, “wealthy” is a married couple making $125,000 each). If half the people are paying no income tax, and in many cases are receiving benefits from the government, politically, how can we ever reduce the spending or otherwise work our way out of this mess?
It simply makes it more difficult. And time is running out. Even our Federal Reserve can’t print enough money to avoid the inevitable.
This is the point I wish Mitt had made.
- Fred Thompson