The released secret recording of Mitt Romney’s remarks to a small group of wealthy supporters provides a revealing look at the mindset of such people. They really do think of themselves as a morally superior class and that those who are poor or struggling as worthless. Matt Taibbi argues that having such delusions is the only way that they can justify to themselves the current state of affairs in which they are engaged in “massive fraud and theft” to benefit themselves at the expense of the rest of us.
In particular, Romney’s comments and their reception by his wealthy audience reveal an almost obsessive desire to denigrate the people in one particular category: those who do not pay any federal income tax. Why this particular tax has been singled out for special attention, while ignoring payroll taxes, state and local taxes, real estate taxes, and sales taxes is not clear, but it has been a long-standing complaint of the oligarchy that not paying this particular tax is the mark of the beast that identifies the real ‘moochers and looters’ in our society, the ones who ‘have no skin in the game’, the parasitic dregs that enjoy living off the work that the rest of us do. They are the ‘lucky duckies’, to use the memorable but disgusting phrase coined in a 2002 Wall Street Journal editorial, as if people are feverishly thinking of ways to get poor enough that they can enjoy the glorious benefits of (federal income) tax-free living.
The reason that 47% of people do not pay federal income taxes is a result of deliberate bipartisan policies that sought to avoid the pressure to raise poor people’s incomes by reducing their taxes instead, and also served as sweeteners to enable politicians to create huge tax cuts for the wealthy. The Earned Income Tax Credit and the Child Credit, which cancels out the tax liability for many wage earners, can be viewed as essentially a subsidy to employers because the government supplements people’s incomes. Ronald Reagan boasted about how his tax reform policies removed many people from the tax rolls. Kevin drum recounts the history of how it came to be that the working poor pay no federal income taxes.
I agree that it is good idea that as many people pay federal income taxes as possible. It gives a sense of solidarity to the population, that we are all in this together. But in order to avoid hardship to the poor, what that requires is a steeply graduated progressive income tax, with very low rates for the poor and rising sharply to very high rates for the wealthy. What we now have in reality is a barely progressive tax system and something that is closer to a flat tax one.
We now have a disgusting scapegoating by the oligarchy of poor wage earners, many of who juggle two or more jobs and yet are barely able to make ends meet. These are the ‘lucky duckies’ in the eyes of the people who can afford to pay $50,000 for lunch to listen to Romney’s drivel. What has caused Romney to stumble (again) is the purely random coincidence that the percentage of people who will likely vote for Obama (about 47%) is roughly the same as number who do not pay this particular tax. It thus allows for a simple (and wrong) narrative based on a lazy numerology to assume that the two groups overlap.
The graphic in this NPR report lays it out clearly. First of all, the actual number who do not pay federal income tax is 46.4%. The graphic in this report shows that making up the 46.4% are 28.3% who pay payroll taxes, 10.3% who are elderly whose income from Social Security is exempt from income tax, and 6.9% who are non-elderly who earn less than $20,000 per year. As this other report shows, of that 46.4%, 19.5% earned between $16,812 and $59,486 in 2001. Interestingly, over 100,000 families earning over $211,000 per year also paid no federal income taxes, making them the true ‘lucky duckies’.
For Romney, someone who refuses to reveal his own tax returns, to despise those who pay no federal income tax takes some brass. As Harry Reid says, “For all we know, Mitt Romney could be one of those who paid no federal income tax.”
Many of these ‘lucky duckies’ actually live in strongly Republican states in the south and west and are likely Romney voters. It is possible that Romney’s supporters do not realize that he is talking about them, that they instinctively exempt themselves from the critique. Maybe. But when I was watching the video, it seemed like the hidden camera was located at one of the tables that the wait staff was using to serve the guests. They are probably working more than one job trying to make ends meet and one wonders how they must feel at having to serve rich people who speak of them in such disparaging terms.
Could the taping have been an act of revenge by one of these ‘lucky duckies’? It would be poetic justice, no?
Remember the Fox “The poor have refrigerators?” report?
Coming soon: “The poor have video cameras? INCONCEIVABLE!”
He can’t even round correctly. 46.4% should be rounded down not up. Plus you left out soldiers on active duty. They don’t have to pay federal income tax either. So one has to wonder why does Mittens hate our troops?
I think the military exemption is for soldiers whose income is earned while serving in actual combat zones, not for everyone on active duty. So it is a smaller number, but one with important political symbolism.
Hi Mano,
Just a nitpick that I only bring up because I was confused (until I looked at the graphic you linked.) It is a pretty ambiguous when you say that
I think the normal way to read that is that the 28.3% is a subset of 46.4%, but really it is 28.3% of everyone (so ~61% of the 46.4%). Might be worth clarifying.
best,
Jared
I see your point. I have changed the wording to remove the ambiguity. Thanks.
Complaining that poor wage earners pay no federal income tax strikes me as about as dumb as complaining that they don’t pay taxes on purchasing yachts, hiring servants or the ownership of dancing horses. You don’t tax people for things they don’t have.
The other nonsense you get is that ‘the only fair tax is a flat tax.’ The problem with this are costs of living are regressive -- if you make minimum wage, you can barely afford housing. If you make 40,000 a year you have some options to choose from, you may be able to buy your own house. If you make 100,000, you don’t *need* to live more ostentatiously than a 40,000 a year person so the % of money you’re going to be spending on basic expenses is low. Mitt Romney can choose to meet with his club at the local bar and grill for about 15 on the outside per person, but he *chooses* to spend thousands for a meal. Costs are not flat percentages of incomes they are very steep for low income people and a triviality for high income people. Taxation ought to level some of this burden.
Another issue is that someone working for a wage is definitely being paid for work they do. A guy like Romney is making money by taking ownership of the work other people have done and the assets that other people’s labor created.
This argument by the Mittaneers is amazingly ahistorical. The income tax was VERY controversial when it was introduced. One of the biggest selling points at the time was that very few households would ever have to pay the tax. It was ALWAYS intended to be paid by a minority. The fact that more than half of households pay income tax would probably shock the creators of the tax.
@4, smrnda,
You probably know this already, but to an economist this is called the marginal value of the dollar and the marginal value of a dollar is a lot less to a rich person than for a poor person.
This simple little economic construct is beyond the ken of many conservatives or libertarians. I’ve had a number of conversations with tea-party republicans, using very similar examples as you provide, who agree with everything. At least until you say to them, “This is one reason why taxing the rich more is justified.” At which point they re-iterate their talking point of, “but the rich earned every dollar, so we can’t tax them more!”
Errg.
There is a sequence Hofsteder’s book; Godel, Escher, Bach where a series of propositions are made where the listener accepts that A and B are true, but that the result of the syllogism ,Z, is still not true. So an new proposition is formed, C, which says that if you accept A and B, Z must be true. But the listener, who accepts A, B, and C, still refuses to accept Z. So proposition D is formed…, ad infinitum.
It was a clever illustration at the time, but I never thought I would see an actual, real-world example of this. But that was way back in high school when I hadn’t developed my acute cynicism.
I don’t recall if I mentioned it on MS’s blog or elsewhere, but think back to 2003. Richard Perle was outed for telling the wealthy how to profit on the coming wars in Afghanistan. The person who did it was one of those Perle was talking to, who exposed Perle out of disgust.
That’s not to suggest that the “help” weren’t the ones who recorded Romney. I actually hope it was a working person, who took the opportunity to say “Up yours!” to the rich. But unless the person outs himself or herself, we’ll probably never know.
If it was a worker, the person is probably concerned about being fired, blacklisted and criminally charged. Who could blame the person for keeping quiet?
This article makes the same point in a different way.
http://krugman.blogs.nytimes.com/2012/09/18/taxes-over-the-life-cycle/
Romney is painting this as 47% of people don’t and will never pay income tax. In fact, most of the 47% will pay income tax soon, or have paid it for most of their lives and are now retired, as you point out.
Thanks -- I get a lot of economic concepts but I can’t recall all the terminology since I took those classes about 15 years ago. But yeah, the marginal value of a dollar to a low-wage person is pretty high, but Mittens could probably burn a few hundred thousand in a bonfire and it wouldn’t miss it, so a progressive tax is actually taxing the marginal utility of the person’s income. I’m glad I can say that now.
And yeah, I recall the dialog from GEB, and I’ve gone through similar conversations before when I explain ‘if you make minimum wage, it takes this many hours of work to buy food for a week. In one minute Mr X. of the 1% has made enough money to buy food for a year” but you hit a brick wall when you try to connect this with why rich people should pay more taxes.
If you think that’s bad, I once handed a conservative guy a copy of International Socialist Worker -- he found himself agreeing with an article but, upon realizing what he was reading, repudiated his former agreement and felt strangely violated.
Maybe this video is the new Occupy movement. Instead of many infiltrators mic checking someone who was speaking on public record anyway, you just need one infiltrator who can get to the 1% where they speak privately among themselves and let the damage be done.
So does Mittens think that all these companies that got tax refunds are mooching?
http://blogs.suntimes.com/sweet/2011/03/ten_giant_us_companies_avoidin.html