Hey Baby, What’s Your Percentage?

7 views

Forget astrological signs. The current trend in popular economics is all about percentages. A year ago, it was all about the 99%. However, skinny is in—who cares about the 99%? It’s time to downsize. Now, thanks to Mitt Romney, 47% is the hottest percentage in American politics.

 

Mitt’s statement, now infamous, has been flying around the Internet. As ABC quotes him:

“There are 47 percent 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. That 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.”

 

Is this fact or fiction? An economy of numbers, or an economy of words?

 

Well, it’s not entirely wrong. In 2011, 46.4% of Americans paid no income tax. The statistic is from the Tax Policy Center, and it’s not hard to decipher. Romney had his number right.

 

However, the conclusions he draws about his number—the “victims…who believe that they are entitled to health care, to food, to housing—“ are a bit of a stretch.

See, about 2/3 not paying the income tax are paying the payroll tax. Ignoring sales and property taxes, it turns out about 82% of the country are paying taxes on the money they make. We’re left with 18% now—are these so called victims forced to vote Democratic for their entitlements?

 

Hardly. The Tax Policy Center breaks up the pie chart one more time.

Surprise! The elderly, people not working and not paying taxes on Social Security benefits, are not paying an income tax or a payroll tax. For the non elderly making under $20,000, consider a three person household. An income of $20,000 is just $10 over the poverty threshold for this hypothetical family. It turns out the extremely poor don’t pay income or payroll taxes either.

 

Now, we’re left with the 1%. In that 1%? According to CNN Money, about 4,000 millionaires. Something tells me these 4,000 aren’t banging on the government’s door for handouts.

 

Even beside the millionaires, not all of the non-income tax paying group belong to the Democratic demographic. Taking into account recent elections and current polls, the elderly are inclined to vote for Romney.

 

Romney had one number right. However, he had a lot of wrong conclusions. An economy of words can’t make up for the truth in an economy of numbers.

 

Alison Shanahan

Arts and Sciences 2015

About author

Alison Shanahan

Alison is an economics and psychology major from Saint Paul, Minnesota. She spent last summer working on a local campaign and interning with an activist nonprofit. Her main political interests are the economic analysis of public policy, particularly when it relates to poverty, education, and the environment.

Your email address will not be published. Required fields are marked *