Counterparties: Revenge of the lucky dukies
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Mitt Romney is defending his comments in an anonymously sourced video, taken surreptitiously at a Florida fundraiser, that “there are 47 percent of the people who will vote for the president no matter what… These are people who pay no income tax”. Which is odd, because Romney’s take on “the 47%” was factually wrong and politically daft.
It is true, according to the Tax Policy Center, that 46% of American taxpayers pay no federal income taxes — the so-called lucky duckies. They do, however, pay taxes like “federal payroll and excise taxes as well as state and local income, sales, and property taxes”. A combination of poverty and tax breaks for children, the elderly and the working poor account for 87.2% of cases where zero federal income taxes are paid, something Ronald Reagan bragged about. Awkwardly for Romney, there’s also a small slice of high-earning taxpayers who pay no federal income tax due to the treatment of capital gains and dividends. NPR’s Planet Money has a great graph that simplifies the breakdown. The reality is that America’s tax system is barely progressive and in effect approaches a flat tax.
Politically, the Atlantic‘s David Graham shows the non-federal taxpayers live largely in Southern and Western states Romney must win. And Graham’s colleague Derek Thompson notes that Obama won a huge share of low-income voters in those states, the president was less successful with elderly Southerners. Romney will need their support in November.
Dismissing nearly half of Americans as unreachable and unworthy struck Jonathan Chait as exactly what we’d been waiting to see: the real Mitt Romney. He turned out to be a “sneering plutocrat” who thinks of the “lowest-earning half of the population as implacably hostile parasites”. As the Huffington Post’s Ryan Grim and Matt Sledge put it in cataloging the wide-ranging negative reaction to Romney’s comments — which also disgusted David Brooks — that’s a stance that “offends liberals and conservatives alike”. — Ben Walsh
On to today’s links:
Europe’s too-big-to-fail banks now even too-big-to-fail-ier – Bloomberg
Berlin’s 168 billion euro problem with the EU bailout fund – Der Spiegel
The head of Germany’s central bank says the ECB kinda reminds him of the devil in Faust – Telegraph