By now, we have all heard Mitt Romney’s statement that 47 percent don’t pay taxes (actually it is 46 percent and that only refers to federal income taxes). So who are these “freeloaders” who are “living off of the rest of us?”
It turns out the largest group, at 44 percent, are the elderly who are retired and not paying taxes on all or some of their Social Security. In addition, they receive an extra standard deduction and may have already paid federal income taxes on their investments.
The next group, at 30.4 percent, receives credits for children and the working poor. A family of four won’t pay federal income taxes if their annual income is $26,400 or less. They will, however, pay payroll taxes (Social Security and Medicare), local taxes, sales taxes, and possibly property taxes.
The remaining 25 percent have a variety of credits and deductions (capital gains, education itemized deductions, exclusions, etc.) reducing their tax burden to zero. In this group we have the super-rich who can hire expensive tax attorneys and move their money offshore to avoid their tax liabilities. It is possible that Mitt Romney was a part of this group during the 10 years he reportedly paid no federal income taxes.
Mitt Romney made his statement before having all of the facts. Or, maybe he had the facts but decided to distort them for his political gain. After all, he gave this speech to a room full of his wealthy supporters and never intended for the rest of us to hear it.