- Mitt Romney's campaign team is in damage-control mode, following these and other comments about people who don’t pay income taxes.
"There are 47 percent of the people who will vote for the president no matter what," Romney said. "All right -- there are 47 percent who are with him, who are dependent on government, who believe that, that they are victims, who believe that government has the responsibility to care for them. Who believe that they are entitled to health care, to food, to housing."
Is 47 percent accurate?
- According to the non-partisan Tax Policy Center, 46 percent of American tax filers, or about 76 million people, paid no federal income tax in 2011, but that figure has been misinterpreted by commentators who give the impression that nearly half of Americans pay no taxes at all.
Who is included?
- About half of people (in the 46 percent) who don’t owe income tax are not in that category because they take advantage of tax breaks but rather because they have low incomes, a Tax Policy Center study found.
Roberton Williams, senior policy fellow for the center, offers this example: A couple - with two children - earning less than $26,400 paid no income last year because of their $11,600 standard deduction and four exemptions of $3,700 each reduced their taxable income to zero.
The remainder of households (in the 46 percent) pay no income tax because of provisions that benefit seniors and low-income working families with children, according to the Tax Policy Center. Those provisions include: the exclusion of some Social Security benefits from taxable income, the tax credit and extra standard deduction for the elderly, and the child, earned income, and child care tax credits, Williams said.
Higher income earners
- The Tax Policy Center also found that itemized deductions and credits for children and education are a bigger factor for households with income between $50,000 and $100,000. Nontaxable households with income greater than $100,000 benefit most from above-the-line and itemized deductions and reduced tax rates on capital gains and dividends.
“It’s also important to recognize that while tax expenditures push many people off the income tax rolls, they provide much larger benefits to higher-income households than to others, measured both in dollar value and as a share of income. Rather than focusing on how relatively modest tax breaks make many of the elderly and low-income workers with children nontaxable, we should keep in mind that high-income households pay a lot less tax than they would without tax expenditures,” Williams wrote.
The Atlantic reports that in 2011 7,000 millionaires used investment income to reduce taxable income from $1 million to zero.
Romney campaign response
- Romney held a late-night press conference to address the video footage released by Mother Jones magazine.