Romney Was Right

A “secret” video surfaced this week and if you believe the Leftist media, you can go ahead and call the elections off in November, Obama will crush Romney!  But I disagree and in my opinion, this video release will only serve to fire up Team Romney and bring out the Mitt we knew and loved during the Florida Primary.

Let’s first rehash the key points of the “47%” video (emphasis mine):

“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…”

“And I mean the president starts off with 48, 49 … he starts off with a huge number. These are people who pay no income tax. Forty-seven percent of Americans pay no income tax. So our message of low taxes doesn’t connect. So he’ll be out there talking about tax cuts for the rich. 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. What I have to convince the five to ten percent in the center that are independents that are thoughtful, that look at voting one way or the other depending upon in some cases emotion, whether they like the guy or not.”

Mitt was right – Around 47% of the eligible tax filers pay no federal income taxes and the rest of the federal income tax burden fall on the other 53% of eligible tax filers (These numbers are undisputed and can be verified here).  If someone told you that the ideal way to run a country was to tax roughly half the population and give that money to the other half you’d call them an idiot (or a Socialist) but that is exactly the situation we have in the US right now!

I’ve shown here where over 90% of all federal income tax revenues are equal to the outlays of Social Security, Medicare, Medicaid, Welfare, Food Stamps and Unemployment Insurance.    These programs started out as safety nets (a noble cause that I continue to support) but they have quickly ballooned to consume almost every income tax dollar the US takes in.  Having almost all the country’s federal income tax dollars going to pay for entitlement programs is silly and explains why we have to borrow over a trillion dollars each year to take care of our normal constitutional responsibilities.  That is no way to run a country.

Leftists like to say the wealthy aren’t paying their “fair share” (although they never define that term…) but we can see how wrong their argument is when we look at the 53% of the people who actually pay taxes and compare their share of overall income with their share of overall taxes.  In theory, a ‘fair share’ would mean that if a particular income demographic group makes X% of the total income then they should pay X% of the total income tax.

The graph below shows the relation between the total percentage of adjusted gross income (AGI) and total percentage of overall federal income tax for the various income demographic groups.  For example, individuals that accounted for just 25% of the total AGI (those making over $200,000 per year) paid 50% of the overall federal tax revenues.  A full analysis of this topic can be found here.

There are basically two ways to help those in the lower income groups provide a better life for themselves and this Election showcases these two radical philosophies in a way we haven’t seen since 1980.

Obama’s plan requires the 53% (which includes the middle class) to pay more taxes so that the government can funnel more money to the 47%.  This is the classic Leftist redistribution of wealth scheme (that Obama endorses) and a quick look at Welfare spending vs. Poverty rate in the US proves this philosophy doesn’t work (Welfare spending as percent of GDP is on the right Y-axis and Poverty Rate is on the left Y-axis).

Romney’s method is to return to smaller government, promote pro-business policies (like reducing the corporate income tax rate to keep jobs in the US) and support a Free Market that encourages entrepreneurship (which also creates jobs).  The more people we have working will translate into more people paying local, state and federal income taxes and this added revenue can be used to build bridges/roads, provide for our defense, reduce our debt, balance our budget and ensure we have safety net programs to help our less fortunate.  Not to mention the intangible benefits of having a larger percentage of our population engaged in a profession that lifts their self esteem and provides a positive example to our children.

Romney has no chance to win the votes for most in the 47% by November and he is right to not focus on those people right now.  He needs to shore up his base and convince those in the middle (who are in the 53% group that pay income taxes) that his agenda, and not Obama’s, will get our country back on sound economic and fiscal footing.

The majority of the 47% will not support Romney in November but after 4 years of showing them that their lives are better off under a leader that follows conservative economic and fiscal policies, he’ll then win their support in 2016.  The support of the 47% won’t be won by rhetoric but by actually lifting people out of their current state of government dependence.

It is my belief that a vast majority of the 47% would rather have a profession than government assistance and providing that to them is the most humane way to help our poor and less fortunate.

This entry was posted in economics, Entitlement Programs, politics. Bookmark the permalink.

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