Another week, another distraction for the Romney campaign. This latest flap, though, is instructive. The revelation that Romney told donors that nearly half all Americans are basically freeloaders offers insights into the core ideas — or myths, as it turns out — that animate modern conservative thinking.
Of the Americans who don’t pay federal income taxes, 37% are not in the labor force either because they’re students, elderly, or unemployed. (University of Denver)
The conservative framework that pits hardworking Americans against a growing hoard of freeloaders rests on four claims, none of which stand up to scrutiny.
Myth One: Nearly half of all Americans don’t pay taxes. We have knocked this down before, but we’ll do it again — because, apparently, even people with Harvard MBAs believe this myth. While it is true that nearly half of all Americans don’t pay income taxes, some 86 percent pay taxes in the form of payroll taxes — which now account for almost of half of all revenues coming into the federal government. As anyone who looks at their pay stubs know, payroll taxes aren’t nothing: they can take a big bite, especially for lower income workers. Meanwhile, those Americans who don’t pay income taxes have good reasons for not doing so. For starters, 37 percent of Americans are not in the labor force for one reason or another: because they are retired or are students or are unemployed. Nobody expects these folks to be paying taxes. Then there are those workers who simply don’t make enough money to pay income taxes. A disturbingly large slice of the labor force makes under $25,000 a year. Once these filers take their basic exemptions, and other deductions — like for the Earned Income Tax Credit, which is designed to encourage work — they don’t owe anything. This fact is a commentary on the low compensation for hard work in America, not the laziness of workers.