At the Univision forum today – Obama makes the case against the notion that 47% of Americans want a government handout…
I travel around the country all the time and the American people are the hardest working people there. Their problem is not that they’re not working hard enough or they don’t want to work or they’re being taxed too little or they just want to loaf around and gather government checks. We’ve gone through a challenging time. People want a hand up, not a handout. Are there people who abuse the system? Yes. Both at the bottom and at the top. Because their are whole bunch of millionaires who aren’t paying taxes at all either.
Romney has tried very hard to paint President Obama as a man building the Great Welfare Society whereas he himself … he would have us believe he came up through humble means and pulled himself up by his own bootstraps and then worked his whole life to get where he is today. Obama did a great job of explaining exactly WHO is among the 47% of Americans that do not pay income taxes …. students, seniors, military men and women, etc. You can see more on the actual #’s HERE. But this approach to pushing back on Romney’s potential fatal statements is consistent with what he said on Letterman HERE … and a preview of what we will see in the future from the Obama campaign. His bringing up the fact that there are a whole bunch of millionaires who aren’t paying taxes dovetails perfectly with his campaign narrative … not all of the 1% is paying their fair share.
So Romney is going to have to explain at some point whether or not he feels these millionaires … this part of the 47% who aren’t paying any income taxes …. should be paying income taxes. He may say no because they pay other taxes but that’s exactly the same argument for even the poorest person. Poor people pay payroll, sales, real estate, and gas taxes; do those not count as well? Romney is about to find himself in a corner that he can’t get himself out of. He will either have to back away from demonizing the half of the country who don’t pay income taxes or he’s going to have to support raising taxes on the rich; his third option is to try to explain why the poor people who don’t pay income taxes should be but the rich people not paying income taxes shouldn’t be …. and that will be political suicide. My schadenfreude.
The Atlantic explains more about the 7,000 millionaires who don’t pay income taxes HERE:
But among families making more than $100,000, there were also half a million tax units — enough to replace the population of Tucson, Arizona — that also paid no income tax. Even more surprising,7,000 millionaires also paid no individual income tax.
Let’s focus on these 7,000 tax payers. I think they help to show why, even if the Buffett Rule is a sensible principle, it wouldn’t be a commonsense law.
As Roberton Williams of the Tax Policy Center explained to me, there are three buckets of factors that can bring taxable income down from $1 million to zero. One is tax tricks. The IRS should crack down more. Two is relying heavily on investments. The administration can try to level taxes for earned income and investment income. Third is great misfortunes. When investments lose significant income, a house or business is destroyed (i.e. a casualty loss), or a family member gets sick and incurs high medical costs for the self-insured, all these things chop away at taxable income and eventually bring a millionaire’s income taxes to zero.
“You can attribute some of those 7,000 non-tax payers to investment choices they made, like tax exempt bonds,” Williams told me, “but a lot of this might be unfortunate happenstance. A tornado tore through your home, you got a very expensive form of cancer, you lost hundreds of thousands of dollars in an investment. Those aren’t choices people made, they’re just legal deductions under the law.”
Obama is going to smile, be presidential and he’s going to stick the knife in ever so slightly just to remind you that Romney is a complete douche. Later he said his biggest failure was not passing immigration reform. He said this:
“What I confess I did not expect, and so I’m happy to take responsibility for being naive here, is that Republicans who had previously supported comprehensive immigration reform, my opponent in 2008 who had been a champion of it and who attended these meetings, suddenly would walk away. That’s what I did not anticipate.”
That’s because Republicans chose party over country. Republicans who previously supported immigration reform like John McCain and Lindsey Graham walked away from a deal because they wanted to see Obama fail. That’s it – end of story.
