Tuesday, September 18, 2012

A Closer Look at Romney’s Theory of the “Taker Class” and Why It's False

Not to beat a dead horse, but it is important to understand Mitt Romney's contempt for average Americans - most of whom are working and paying taxes - because it is the foundation for his (and the larger GOP's) reverse Robin Hood policies that would transfer tax burdens from the wealthy like Romney himself and shift the burden to the middle class and the less fortunate.  It's an approach that Paul Ryan - another individual born to family wealth - totally subscribes to.   It's also an approach that ought to be anathema to anyone who actually subscribes to the Gospel message as opposed to using feigned religious belief to dupe the ignorant and gullible in the GOP base. Ezra Klein has a column in the Washington Post that looks at the untruthfulness of Romney's claims and also the danger he poses to working Americans.  Here are highlights:

Romney is arguing that about 47 percent of the country is a “taker class” that pays little or nothing into the federal government but wants to tax the productive classes for free health care, food, housing, etc.

Romney is not alone in this concern. “We’re dismayed at the injustice that nearly half of all Americans don’t even pay any income tax,” Texas Gov. Rick Perry said when he began his presidential campaign.

For what it’s worth, this division of “makers” and “takers” isn’t true. Among the Americans who paid no federal income taxes in 2011, 61 percent paid payroll taxes — which means they have jobs and, when you account for both sides of the payroll tax, they paid 15.3 percent of their income in taxes, which is higher than the 13.9 percent that Romney paid. Another 22 percent were elderly.

So 83 percent of those not paying federal income taxes are either working and paying payroll taxes or they’re elderly .   .   .   .   The remainder, by and large, aren’t paying federal income or payroll taxes because they’re unemployed. But that’s a small fraction of the country.

Behind this argument, however, is a very clever policy two-step that’s less about who pays taxes now and more about who is going to pay to reduce the deficit in the coming years. Here’s how it works.

Part of the reason so many Americans don’t pay federal income taxes is that Republicans have passed a series of very large tax cuts that wiped out the income-tax liability for many Americans. 

But now that those tax cuts have passed and many fewer Americans are paying federal income taxes and the rich are paying a much higher percentage of federal income taxes, Republicans are arguing that these Americans they have helped free from income taxes have become a dependent and destabilizing “taker” class who want to hike taxes on the rich in order to purchase more social services for themselves. The antidote, as you can see in both Paul Ryan and Mitt Romney’s policy platforms, is to further cut taxes on “job creators” while cutting the social services that these takers depend on. That way, you roll the takers out of what Ryan calls “the hammock” of government and you unleash the makers to create jobs and opportunities.

Republicans have become outraged over the predictable effect of tax cuts they passed and are using that outrage as the justification for an agenda that further cuts taxes on the rich and pays for it by cutting social services for the non-rich.  That’s why Romney’s theory here is more than merely impolitic. It’s actually core to his economic agenda.

I continue to sincerely hope Romney is defeated in November along with many others in the GOP - a political party that has become a haven for the greedy, the wealthy, racists, hate group members, religious extremists and the selfish and uncaring.

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