The 47%

As most of you know by now presidential candidate Mitt Romney told wealthy donors that 47% of the people pay no income tax, which is true, but of those that pay no income tax half of those are living below the poverty level. They are the working poor, some of them are working two jobs and still not making more than $26,400 a year the minimum for a couple with two kids. However, they are still paying taxes; they pay Social Security and Medicare taxes, they pay local property taxes and if they live in a state with a sales tax they pay that.

Another large part of the 47% is seniors who are collecting Social Security which they have already paid into over their working life. Also there are a small number of people who are disabled who are collecting Social Security disability benefits.

According to an article in the Huffington Post,

Romney's 47 percent figure lumped together separate groups that have little relation to one another. Most Americans do pay taxes: The poorest fifth of Americans paid an effective tax rate of 17 percent last year, and the second-poorest fifth paid an effective tax rate of 21 percent, when factoring in payroll taxes, sales taxes and property taxes, among others, according to Citizens for Tax Justice.

It is true that 46 percent of American households did not pay federal income taxes last year, according to the Tax Policy Center. But that number is unusually high, in part because of the recession -- and a majority of that 46 percent still paid payroll taxes. Only 18 percent of American households paid no income taxes and no payroll taxes last year. It is largely low-income seniors and very poor people that legally don't pay federal income taxes or payroll taxes, according to the Center on Budget and Policy Priorities and the Tax Policy Center.
Only 18% are paying no taxes whatsoever and a number of those are earning in the six figures from dividends and capital gains. They avoid paying taxes because dividends and capital gains are taxed at a lower rate and they have enough deductions of offset their income. They are also the ones who are more likely to vote Republican to avoid paying taxes. The Huffington Post article went on to say,
It was also inaccurate for Romney to claim that those who don't pay federal income taxes would vote for President Obama "no matter what." Nearly all states with a high percentage of Americans that don't pay federal income taxes vote Republican in presidential elections, according to the Washington Post.

And that was also pointed out in an article in USA Today…

In reality, the number of people who pay income tax dropped largely because of the recession and tax cuts approved during Republican administrations. And Republicans defend many of the $1 trillion in annual tax expenditures -- deductions, credits and loopholes -- that represent another form of entitlements.

USA Today also wrote about how Romney was playing on feeling of his wealthy donors that they are supporting a nation of free loaders,

In surreptitiously taped comments at a May fundraising event, leaked Monday by the liberal magazine Mother Jones, Romney plays to his donors' prejudices to sell a message that the Democratic Party is about dependency and the Republican Party is about free enterprise and limited government.

In a New York Times opinion piece, Annie Lowrey wrote,

Indeed, the recession and its aftermath have left tens of millions of workers out of a job or underemployed, removing more households from payment of federal income taxes. Moreover, the Bush tax cuts – the signature Republican economic policy of the 2000s, which doubled the child tax credit, increased a number of other deductions and exemptions, and lowered marginal tax rates – erased millions of families’ federal income tax liabilities.

People say that the Democrats are using class warfare, but so are the Republicans.