The issue of exactly who pays federal income taxes is once again hitting center stage on the presidential campaign trail.
A leaked video released by the progressive magazine Mother Jones shows GOP Presidential contender Mitt Romney at a GOP fundraiser in May making candid remarks about who pays federal income taxes in this country.
In the video, Romney discusses how it is difficult to convince an electorate that the U.S. economy needs lower federal income taxes in order to thrive when roughly half don’t pay them at all.
A reminder: The top 1% of this country shoulders 36.7% of the federal income tax burden, according to the National Taxpayers Union. The top 5% pays 58.7%. Top 10% pays 70.5%. The bottom half pays just 2.25%.
The dirty secret in D.C. is that the attack on tax cuts for the rich is a vacant, meaningless attack, because logically and naturally the upper brackets would get federal income tax cuts because they are the only ones paying federal income taxes.
And that also means the burden of government spending falls on the slimmest percentage of Americans – and they are the taxpayers who will have to pony up even more if spending goes unchecked.
The federal deficit has grown by $5.23 trillion under the Obama Administration, the equivalent of adding Germany and South Korea to the U.S. federal deficit, and is now at $16 trillion. Standard & Poor’s has already downgraded the U.S. from its triple-A rating, and now Moody’s Investors Service threatens it will downgrade the country next year as well if spending is not reined in. U.S. economic growth has slowed to an annualized 1.7%, which means the economy is growing at just around $270 billion a year.
For every $1 added to the economy since January 2009, the U.S. has added more than $3 in debt, FOX News reports, adding that, since then, the government has spent $5.23 trillion while the U.S. economy grew by just $1.68 trillion.
“The American Republic will endure, until politicians realize they can bribe the people with their own money,” the French philosopher and historian Alexis de Tocqueville once said.
According to the Census Bureau, 49% of Americans live in a household that receives a government entitlement, Medicaid, Medicare, food stamps, disability, Social Security, or housing assistance. Entitlement spending has risen along with the number of Americans who have retired. Ironically, voter polling indicates the elderly tend to vote for more Republican candidates.
According to the Tax Policy Center, 83% of Americans who pay no federal income tax have household income under $33,542. The 47% of households who pay no federal income tax receive government exemptions for subsistence level earnings as well as for dependents, for things like senior citizen tax benefits, child care credits, the earned income tax credit and education credits.
Here’s the quote from Governor Mitt Romney: “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 they are entitled to health care, to food, to housing, to you name it…These are people who pay no income tax, 47% of Americans pay no income tax. So our message of low taxes doesn’t connect. So he’ll (President Obama) be out there talking about tax cuts for the rich. I mean, that’s what they sell every four years. And so my job is not to worry about those people. I’ll never convince them that they should take personal responsibility and care for their lives. What I have to do is convince the five to ten percent in the center that are independents, that are thoughtful, that look at voting one or the other depending upon in some cases emotion, whether they like the guy or not.”
Governor Romney didn't back down from his remarks at a news conference last night. "It's not elegantly stated, let me put it that way," Mr. Romney said. "I'm speaking off the cuff in response to a question."
Mr. Romney, though, reiterated that he has been making these same remarks throughout his presidential campaign, central to his belief that a free market system works better than a government-centered system, which spends taxpayer money on political constituencies or pet projects.
Elizabeth MacDonald joined FOX Business Network (FBN) as stocks editor in September 2007.
Follow Elizabeth MacDonald on Twitter @LizMacDonaldFOX.