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 4:06 PM EDT, Tue October 21, 2014
Timothy Stanley says Lewinsky is shamelessly playing the victim in her affair with Bill Clinton, humiliating Hillary Clinton again and aiding her critics
updated 10:14 AM EDT, Thu October 23, 2014
Imagine being rescued from modern slavery, only to be charged with a crime, writes John Sutter
updated 12:00 PM EDT, Tue October 21, 2014
Tidal flooding used to be a relatively rare occurrence along the East Coast. Not anymore, write Melanie Fitzpatrick and Erika Spanger-Siegfried.
updated 7:35 AM EDT, Tue October 21, 2014
Carol Costello says activists, writers, politicians have begun discussing their abortions. But will that new approach make a difference on an old battleground?
updated 9:12 AM EDT, Tue October 21, 2014
Sigrid Fry-Revere says the National Organ Transplant Act has caused more Americans to die waiting for an organ than died in both World Wars, Korea, Vietnam, Afghanistan and Iraq
updated 2:51 PM EDT, Tue October 21, 2014
Crystal Wright says racist remarks like those made by black Republican actress Stacey Dash do nothing to get blacks to join the GOP
updated 6:07 PM EDT, Tue October 21, 2014
Mel Robbins says by telling her story, Monica Lewinsky offers a lesson in confronting humiliating mistakes while keeping her head held high
updated 9:29 AM EDT, Mon October 20, 2014
Cornell Belcher says the story of the "tea party wave" in 2010 was bogus; it was an election determined by ebbing Democratic turnout
updated 4:12 PM EDT, Mon October 20, 2014
Les Abend says pilots want protocols, preparation and checklists for all contingencies; at the moment, controlling a deadly disease is out of their comfort zone
updated 11:36 PM EDT, Sun October 19, 2014
David Weinberger says an online controversy that snowballed from a misogynist attack by gamers into a culture war is a preview of the way news is handled in a world of hashtag-fueled scandal
updated 8:23 AM EDT, Mon October 20, 2014
Julian Zelizer says Paul Krugman makes some good points in his defense of President Obama but is premature in calling him one of the most successful presidents.
updated 10:21 PM EDT, Sun October 19, 2014
Conservatives can't bash and slash government and then suddenly act surprised if government isn't there when we need it, writes Sally Kohn
updated 8:05 AM EDT, Wed October 22, 2014
ISIS is looking to take over a good chunk of the Middle East -- if not the entire Muslim world, write Peter Bergen and Emily Schneider.
updated 9:00 AM EDT, Mon October 20, 2014
The world's response to Ebola is its own sort of tragedy, writes John Sutter
updated 4:33 PM EDT, Fri October 17, 2014
Hidden away in Russian orphanages are thousands of children with disabilities who aren't orphans, whose harmful treatment has long been hidden from public view, writes Andrea Mazzarino
updated 1:22 PM EDT, Sat October 18, 2014
When you hear "trick or treat" this year, think "nudge," writes John Bare
updated 12:42 AM EDT, Sat October 18, 2014
The more than 200 kidnapped Nigerian schoolgirls have become pawns in a larger drama, writes Richard Joseph.
updated 9:45 AM EDT, Fri October 17, 2014
Peggy Drexler said Amal Alamuddin was accused of buying into the patriarchy when she changed her name to Clooney. But that was her choice.
updated 4:43 PM EDT, Thu October 16, 2014
Ford Vox says the CDC's Thomas Frieden is a good man with a stellar resume who has shown he lacks the unique talents and vision needed to confront the Ebola crisis
updated 4:58 AM EDT, Sat October 18, 2014
How can such a numerically small force as ISIS take control of vast swathes of Syria and Iraq?
updated 9:42 AM EDT, Fri October 17, 2014
How big a threat do foreign fighters in Syria and Iraq pose to the West? It's a question that has been much on the mind of policymakers and commentators.
updated 8:21 AM EDT, Fri October 17, 2014
More than a quarter-million American women served honorably in the Iraq and Afghanistan wars. Now they are home, we have an obligation to help them transition back to civilian life.
updated 4:27 PM EDT, Thu October 16, 2014
Paul Begala says Rick Scott's deeply weird refusal to begin a debate because rival Charlie Crist had a fan under his podium spells disaster for the Florida governor--delighting Crist
updated 12:07 AM EDT, Thu October 16, 2014
The longer we wait to engage on Ebola, the more limited our options will become, says Marco Rubio.
updated 7:53 AM EDT, Wed October 15, 2014
Democratic candidates who run from President Obama in red states where he is unpopular are making a big mistake, says Donna Brazile
updated 12:29 AM EDT, Thu October 16, 2014
At some 7 billion people, the world can sometimes seem like a crowded place. But if the latest estimates are to be believed, then in less than a century it is going to feel even more so -- about 50% more crowded, says Evan Fraser
updated 12:53 PM EDT, Mon October 20, 2014
Paul Callan says the Ebola situation is pointing up the need for better leadership
updated 6:45 PM EDT, Wed October 15, 2014
Nurses are the unsung heroes of the Ebola outbreak. Yet, there are troubling signs we're failing them, says John Sutter
updated 1:00 PM EDT, Wed October 15, 2014
Dean Obeidallah says it's a mistake to give up a business name you've invested energy in, just because of a new terrorist group
updated 7:01 PM EDT, Wed October 15, 2014
Fear of Ebola is contagious, writes Mel Robbins; but it's time to put the disease in perspective
updated 1:44 PM EDT, Tue October 14, 2014
Oliver Kershaw says that if Big Tobacco is given monopoly of e-cigarette products, public health will suffer.
updated 9:35 AM EDT, Sat October 18, 2014
Stop thinking your job will make you happy.
updated 10:08 PM EDT, Tue October 14, 2014
Ruben Navarrette says it's time to deal with another scandal involving the Secret Service — one that leads directly into the White House.
updated 7:25 AM EDT, Tue October 14, 2014
Americans who choose to fight for militant groups or support them are young and likely to be active in jihadist social media, says Peter Bergen
updated 9:03 AM EDT, Mon October 13, 2014
Stephanie Coontz says 11 years ago only one state allowed same sex marriage. Soon, some 60% of Americans will live where gays can marry. How did attitudes change so quickly?
updated 4:04 PM EDT, Tue October 14, 2014
Legalizing assisted suicide seems acceptable when focusing on individuals. But such laws would put many at risk of immense harm, writes Marilyn Golden.
updated 9:07 AM EDT, Mon October 13, 2014
Julian Zelizer says the issues are huge, but both parties are wrestling with problems that alienate voters
updated 6:50 PM EDT, Mon October 13, 2014
Mel Robbins says the town's school chief was right to cancel the season, but that's just the beginning of what needs to be done
updated 11:43 AM EDT, Sat October 11, 2014
He didn't discover that the world was round, David Perry writes. So what did he do?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT