Skip to main content
Part of complete coverage on
 

Americans are not moochers

By Teresa Ghilarducci and Rick McGahey, Special to CNN
updated 12:54 PM EDT, Thu September 20, 2012
STORY HIGHLIGHTS
  • Teresa Ghilarducci, Rick McGahey: It's true 47% of people don't pay income tax
  • Ghilarducci, McGahey: But Americans are not moochers, as Mitt Romney implies
  • They say nearly all Americans pay some tax: sales, payroll, state income, or property tax
  • Authors: Many of those who don't pay income tax are the elderly or unemployed

Editor's note: Teresa Ghilarducci and Rick McGahey are professors of economics at the Schwartz Center for Economic Policy Analysis and The New School in New York City.

(CNN) -- Americans are not a nation of moochers and helpless dependents. Those who are not paying federal income tax would gladly do so, because it would mean they have a decent-paying job.

GOP presidential candidate Mitt Romney is right that 47% of Americans don't pay federal income tax. But he is wrong to suggest almost half of Americans pay no tax at all and feel entitled to live off government handouts.

Romney said: "There are 47% of the people who will vote for the president no matter what. All right, there are 47% who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. But that's an entitlement. And the government should give it to them. And they will vote for this president no matter what. ... These are people who pay no income tax."

Teresa Ghilarducci
Teresa Ghilarducci

Opinion: Real conservatives can say they're sorry

Rick McGahey
Rick McGahey

It's true that some Americans don't pay federal income tax. But virtually all Americans pay some form of tax, whether it's sales, payroll, state income, or property tax.

Over 60% of those who don't pay income tax are working; they pay payroll tax, which goes to support Social Security and Medicare. Another 22% of those who don't pay income tax are the elderly; most of them don't work.

In fact, only about 8% of Americans pay neither federal income tax nor payroll tax, because they are unemployed, are students, or are disabled.

What is missing from all this talk about tax is the fact that although the rich pay higher taxes than the poor, middle-class people actually pay a higher percentage of their income in total taxes. True, federal income tax rates are progressive, with rates going to 35% for the top earners. But deductions and special treatment of capital gains reduce actual tax rates for the top earners. So what we end up with is upper-middle-class taxpayers paying the highest actual percentage of their income, over 31%, according to a 2010 study by the group Citizens for Tax Justice.

How did our tax system get so flat?

The payroll tax for Social Security is 12.4% (split between employer and employee). It's highly regressive, because only the first $110,100 of income is taxed. CEOs earning over $35 million per year have paid their entire annual Social Security tax bill before the end of their workday on January 2, while regular workers see this tax deducted from every check throughout the year.

Billionaire Warren Buffett points out that he pays a tax rate of only 17.8%, compared with his secretary's rate of 35.8%. Why? Because payroll taxes are capped and he gets a lower rate on his capital gains.

President Obama pushed to pass the "Buffett Rule" to help reduce this disparity, but Romney's vice-presidential running mate, Rep. Paul Ryan, opposed the rule, calling support for it "class warfare." As the Republicans use the term "class warfare," they also bring forth, pointedly, details on the wide gap in income and wealth distribution in our country.

Digging deeper into why 47% don't pay federal income tax, what we find are many former taxpayers: Twenty-two percent are the elderly, living mostly on Social Security, a benefit they got by working and paying payroll taxes. Others are unemployed or are paid close to the minimum wage, so they don't have enough income to file any taxes.

What about Romney's claim that these people believe they have a right to government assistance? Our research shows that over 50% of older people looking for work (but who are too young to collect Social Security) do not receive unemployment insurance or any other government assistance. They are living close to the poverty line with no help other than family.

Opinion: Election winner faces a dangerous world

Far fewer poor Americans get government assistance for low incomes. For the last 30 years, less than 4% of the U.S. population has received a full year's worth of payments, like food stamps, which are based on level of income.

Romney can choose whom he cares about, but he can't be allowed to choose his own facts and distort reality in service of divisive politics. Focusing exclusively on federal income taxes hides the fact that most Americans pay plenty of other taxes.

Finally, Romney says that the 47% can't be convinced to take "personal responsibility." Tell that to the single mother working the night shift to put her kids through school, or the 78-year-old widow living on Social Security, or the handicapped Iraqi war veteran who relies on government health care for his service to his country. Along with millions of working Americans, they are paragons of personal responsibility, not Romney's caricature of self-pitying victims seeking to live off government benefits.

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of Teresa Ghilarducci and Rick McGahey.

ADVERTISEMENT
Part of complete coverage on
updated 8:21 AM EDT, Mon September 1, 2014
Carlos Moreno says atheists, a sizable fraction of Americans, deserve representation in Congress.
updated 12:25 PM EDT, Sun August 31, 2014
Julian Zelizer says Democrats and unions have a long history of mutual support that's on the decline. But in a time of income inequality they need each other more than ever
updated 12:23 AM EDT, Sun August 31, 2014
William McRaven
Peter Bergen says Admiral William McRaven leaves the military with a legacy of strategic thinking about special operations
updated 12:11 PM EDT, Fri August 29, 2014
Leon Aron says the U.S. and Europe can help get Russia out of Ukraine by helping Ukraine win its just war, sharing defense technologies and intelligence
updated 1:24 PM EDT, Fri August 29, 2014
Timothy Stanley the report on widespread child abuse in a British town reveals an institutional betrayal by police, social services and politicians. Negligent officials must face justice
updated 9:06 PM EDT, Fri August 29, 2014
Peter Bergen and David Sterman say a new video of an American suicide bomber shows how Turkey's militant networks are key to jihadists' movement into Syria and Iraq. Turkey must stem the flow
updated 11:54 AM EDT, Mon September 1, 2014
Whitney Barkley says many for-profit colleges deceive students, charge exorbitant tuitions and make false promises
updated 10:34 AM EDT, Fri August 29, 2014
Mark O'Mara says the time has come to decide whether we really want police empowered to shoot those they believe are 'fleeing felons'
updated 10:32 AM EDT, Thu August 28, 2014
Bill Frelick says a tool of rights workers is 'naming and shaming,' ensuring accountability for human rights crimes in conflicts. But what if wrongdoers know no shame?
updated 10:43 PM EDT, Thu August 28, 2014
Jay Parini says, no, a little girl shouldn't fire an Uzi, but none of should have easy access to guns: The Second Amendment was not written to give us such a 'right,' no matter what the NRA says
updated 1:22 PM EDT, Sat August 30, 2014
Terra Ziporyn Snider says many adolescents suffer chronic sleep deprivation, which can indeed lead to safety problems. Would starting school an hour later be so wrong?
updated 9:30 AM EDT, Fri August 29, 2014
Peggy Drexler says after all the celebrity divorces, it's tempting to ask the question. But there are still considerable benefits to getting hitched
updated 2:49 PM EDT, Fri August 29, 2014
The death of Douglas McAuthur McCain, the first American killed fighting for ISIS, highlights the pull of Syria's war for Western jihadists, writes Peter Bergen.
updated 6:42 PM EDT, Tue August 26, 2014
Former ambassador to Syria Robert Ford says the West should be helping moderates in the Syrian armed opposition end the al-Assad regime and form a government to focus on driving ISIS out
updated 9:21 AM EDT, Wed August 27, 2014
Ruben Navarrette says a great country does not deport thousands of vulnerable, unaccompanied minors who fled in fear for their lives
updated 9:19 AM EDT, Wed August 27, 2014
Robert McIntyre says Congress is the culprit for letting Burger King pay lower taxes after merging with Tim Hortons.
updated 7:35 PM EDT, Tue August 26, 2014
Wesley Clark says the U.S. can offer support to its Islamic friends in the region most threatened by ISIS, but it can't fight their war
updated 4:53 PM EDT, Tue August 26, 2014
America's painful struggle with racism has often brought great satisfaction to the country's rivals, critics, and foes. The killing of Michael Brown and its tumultuous aftermath has been a bonanza.
updated 3:19 PM EDT, Tue August 26, 2014
Rick Martin says the death of Robin Williams brought back memories of his own battle facing down depression as a young man
updated 11:58 AM EDT, Tue August 26, 2014
David Perry asks: What's the best way for police officers to handle people with psychiatric disabilities?
updated 3:50 PM EDT, Mon August 25, 2014
Julian Zelizer says it's not crazy to think Mitt Romney would be able to end up at the top of the GOP ticket in 2016
updated 4:52 PM EDT, Mon August 25, 2014
Roxanne Jones and her girlfriends would cheer from the sidelines for the boys playing Little League. But they really wanted to play. Now Mo'ne Davis shows the world that girls really can throw.
updated 5:04 PM EDT, Mon August 25, 2014
Kimberly Norwood is a black mom who lives in an affluent neighborhood not far from Ferguson, but she has the same fears for her children as people in that troubled town do
updated 5:45 PM EDT, Fri August 22, 2014
It apparently has worked for France, say Peter Bergen and Emily Schneider, but carries uncomfortable risks. When it comes to kidnappings, nations face grim options.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT