September 21, 2012
by Irwin Stelzer
I know a gaffe when I see one, having made many myself, and Romney's 47% remark was no gaffe. It was an expression of a belief so deeply held, and so thoroughly validated in the circles in which Romney travels, that it required no fact-checking. Add to that the tin ear that allowed the Republican party's stalwart to be photographed at his vacation estate, and to claim that his support of the auto industry is demonstrated by the fact that his wife drives two Cadillacs, and you have a prescription for electoral disaster. Hence his claim, made to a group of supporters at a private meeting in affluent Boca Raton, that 47% of Americans pay no income taxes and 49% are "dependent on the government."
First, what the Obama-leaning media call the 47% gaffe. Romney is right that about half of Americans pay no income taxes (he put the figure at 47%, the precise figure is 46.4%), he was wrong to fail to mention that 28.3% are working and have highly regressive payroll taxes deducted from their pay checks, 10.3% pay no taxes because they are retired and living on social security benefits they paid for throughout their working lives, 6.9% earn less than $20,000 annually, and thousands of soldiers in combat zones are exempt from income taxes. That's virtually all of Romney's 47%. To say that these people refuse to "take personal responsibility" for their lives borders on calumny. Little wonder that leading conservative thinker and activist, our esteemed editor, Bill Kristol, called the remark "arrogant and stupid."
There is worse. Romney, who seeks the Reagan mantle, should have known -- or at least been told -- that it was past Republican presidents (Gerald Ford, Ronald Reagan, George W. Bush) who lopped low earners off the income tax rolls so that they would keep more of their wages and therefore have a greater incentive to find work. One device that accomplishes that objective, the earned-income tax credit, was called by President Reagan "one of the best anti-poverty programs the world has ever seen." This is an area where fairness meets efficiency, not one to be sloughed off as promoting dependency.
Now, to the 49% who are "dependent on government." This figure has some basis in fact, since 49% of Americans live in a household with at least one person receiving some government benefits. But it is a long jump from that to the Romney's assertion that these people won't "take personal responsibility and care for their lives." The 49% includes recipients of social security, Medicaid and Medicare, veterans' benefits and unemployment insurance. To treat the entire group as "takers" rather than "makers", as some Republicans are doing is, at the very least, nonsense.
It is not, as Mark Twain mistakenly believed Disraeli to have said, that there are lies, damned lies and statistics. It is not that the income and tax statistics that are false, but that politicians often attempt to torture them until they will say anything, or even if honest are blinded by ideology to the need for careful analysis and truthful presentation.
The media, overwhelmingly biased in Obama's favor, are convinced Romney's "gaffe" will have an enduring effect and be reflected in his vote tally. But with three Presidential debates coming up and the race tight that is far from certain. What is certain is that Romney has distracted attention from a serious debate that the country should be having between a Democratic candidate who believes in expanding the welfare state and the role of government in the lives of its citizens, and a Republican candidate who believes that increased dependency on government saps individual initiative and cannot be afforded by a nation already in debt.
In an attempt to calm the media storm, Romney admitted that he had "inelegantly" stated what he considers to be a correct distinction between himself and Obama. "I think a society based upon a government-centered nation where government plays a larger and larger role, redistributes money, that's the wrong course for America….The president's approach is attractive to people who are not paying taxes because frankly my discussion about lowering taxes isn't as attractive to them….And those that are dependent upon government and those that think government's job is to redistribute, I'm not going to get them."
Wrong: polls show that Romney is likely to get 35% of the half of Americans who don't pay income taxes. Perhaps Romney's message that lower taxes stimulate the growth necessary to provide the government with tax revenues to fund benefit programs has more supporters than he reckons. Or that the long-term unemployed have learned the hard way that four more years of Obama will mean a longer stay on the dole queue. Or the failure of the Obama foreign policy is as worrying to the non-income-tax-paying group as to those who do pay those taxes. Or the Republicans' position on the so-called social issues (opposed to gay marriage and abortion) resonates with many of the voters Romney is writing off. It might be a good idea for one of the candidate's advisors to remind him that man indeed does not live by bread alone, and that the half of the electorate that he has written off might well respond to a clear, positive, detailed, as yet undelivered message laying out how he plans to cut the deficit and grow the economy.
It is probably too much to hope for that Romney will reconnect with conservative principles, principles that leave ample room for policies that ease the plight of those who entered this world with fewer advantages than he did; that his oft-stated opposition to "redistribution" allows for continuation of a progressive income tax and includes opposition to use of the tax code to benefit recipients of carried interest, capital gains, dividend income and those who deduct interest paid on second-home mortgages. These are every bit as redistributional of after-tax income as the version Obama has in mind, a kind of "gotcha", indiscriminate taking from the rich to give to the poor.
Absent some recognition by Mitt Romney that he must spend less time in the agreeable company of funders who share his prejudices, and more explaining to voters in swing states just what he has in mind for America, it looks like four more years for the President.
Irwin Stelzer is a Senior Fellow and Director of Economic Policy Studies for the Hudson Institute. He is also the U.S. economist and political columnist for The Sunday Times (London) and The Courier Mail (Australia), a columnist for The New York Post, and an honorary fellow of the Centre for Socio-Legal Studies for Wolfson College at Oxford University. He is the founder and former president of National Economic Research Associates and a consultant to several U.S. and United Kingdom industries on a variety of commercial and policy issues. He has a doctorate in economics from Cornell University and has taught at institutions such as Cornell, the University of Connecticut, New York University, and Nuffield College, Oxford.
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