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Who are the 47% in Romney's remarks?

1:55 PM, Sep 18, 2012   |    comments
Mitt Romney
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Gregory Korte
USA Today

WASHINGTON -- A year ago, Occupy Wall Street put the 1% -- the top-earning Americans who control a third of the nation's wealth -- at the center of the political debate.

Now, the 47% are taking their turn.

Mitt Romney's remarks to campaign donors on a secretly taped video repeatedly referenced that precise percentage: He said 47% of people will vote for Barack Obama "no matter what." He said 47% were "dependent upon government," "believe that they are victims" and "believe the government has a responsibility to care for them."

And he said 47% "don't pay any income taxes."

On that last point, at least, Romney is correct.

A study by the Tax Policy Center found that 46.4% of Americans -- Romney rounded up -- either pay no federal income taxes or get more back from the government than they pay. That study, from July 2011, was frequently cited in the Republican primaries that led to Romney's nomination for president.

That 47% number applies only to federal income taxes, and does not include payroll taxes -- used to fund Social Security and Medicare -- or any state and local taxes. About 18% pay neither a federal income tax nor payroll taxes. But 45 states have a sales tax, so it's nearly impossible for even low-income Americans to avoid paying at least some taxes.

Who are the 47%? The Tax Policy Center's Donald Marron said they fall into three main groups:

The working poor.The earned income tax credit and the child credit can help families making $50,000 or more pay no taxes or get money back. About 60% of those not paying income taxes do contribute to payroll taxes -- which means they must have some source of earned income.

The elderly. An increased standard deduction for those over age 65, and an exemption on part of Social Security earnings, means that many older Americans pay no income taxes -- even though most of them paid into the system through a decades of paying taxes.

The low-income.A family of four claiming only the standard deduction and personal exemptions pays no federal income tax on its first $27,000 of income.

But not all non-taxpayers fit into those categories. Even the ultra-wealthy can avoid paying taxes -- for example, if their income comes from tax-exempt bonds. Tax Policy Center data show that perhaps 24,000 of the top 1% of earners pay no federal income taxes. "There are certainly people all through the income distributions who don't pay taxes," Marron said.

And Romney was wrong to suggest that those 47% support his opponent "no matter what." Gallup's daily tracking poll shows that a third of those with incomes less than $24,000 support Romney, and about half of retirement-age voters do. Add those two groups together, and Obama has a slight lead, 49% to 43%, Gallup pollster Frank Newport says.

USA Today

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