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Romney’s Entitlement Society



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Mother Jones has gleefully uncovered a video of Mitt Romney talking to a crowd at a fundraiser, in which he says the following:

There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what . . . he starts off with a huge number. These are people who pay no income tax. Forty-seven percent of Americans pay no income tax. . . . I mean that’s what they sell every four years. And so my job is not to worry about those people. I’ll never convince them they should take personal responsibility and care for their lives.

It is indeed true that roughly 47 percent of Americans have no net federal income-tax liability. This is essentially, however, a meaningless number, since most of these people still pay taxes: Dylan Matthews pointed to the simplest explanation of this, from the Tax Policy Center: Just 18 percent of households paid neither payroll taxes nor income taxes to the federal government (of them, 10.3 percent are elderly, and 6.9 percent are non-elderly and earn less than $20,000 a year). There are a variety of other reasons why this isn’t a good statistic for Republicans to rely upon, as Ramesh Ponnuru outlined in a piece for NR last fall. And, of course, the Reagan tax cuts and Bush’s expansion of the EITC have a lot to do with pushing that 47 percent number higher.

But there is nonetheless some truth to Romney’s lament that a huge share of Americans are now reliant on government benefits and transfers. Nicholas Eberstadt of AEI has a new book entitled “A Nation of Takers: America’s Entitlement Epidemic” (an excerpt from which was published in the Journal a couple weeks ago) which discusses the range of Americans who now benefit from federal benefits; 50 percent of Americans now live in a household that does.

Even more damning, after the CBO released its report in July about the distribution of federal tax payments and household income, Harvard economics professor (and Romney adviser) Gregory Mankiw did a little back-of-the-envelope math to look at how transfers received by various quintiles compared to the amount people pay in taxes. Below is their net income either received in transfers or paid in taxes, expressed as a percentage of market income earned by each quintile:

Bottom quintile: -301 percent
Second quintile: -42 percent
Middle quintile: -5 percent
Fourth quintile: 10 percent
Highest quintile: 22 percent

That is, looked at as a whole, even the middle quintile of Americans receive more in benefits than they pay in taxes to the federal government. Romney’s comments may still strike many Americans as ill-advised or offensive, but they’re not entirely detached from reality. A disturbingly large share of Americans do rely on government entitlements, and their protectiveness toward them is of immense political importance.



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