Forbes: Memo To Mitt Romney: The 47% Pay Taxes Too

Political suicide? I’ll leave it to the pundits to analyze the impact Romney’s comments will have on his election prospects. (It should be noted, however, that while Romney does have an edge among high-income voters, billionaire Warren Buffett is hardly the only rich guy supporting the Democratic incumbent. See Millionaire Towns For Obama.)

But since I write about tax and budget issues, let me make a few serious points about the 46.4% of American households who paid no federal income taxes for 2011. First of all, according to the Tax Policy Center, more than 60% of those non-income tax paying households did pay federal payroll taxes—meaning Social Security and Medicare taxes. (Considering all Americans households, including those that owed income tax, 62% paid more in payroll taxes than in federal income taxes.)

What of the 18.1% of U.S. households that paid neither income nor payroll taxes? More than half of them were headed by a senior–in other words, by someone who paid payroll taxes and likely some income taxes too, in the past. (No, the amount the elderly have paid in does not cover the cost of the Medicare benefits they are now getting. And that is true despite the fact that in a Romney TV ad attacking Obamacare’s cuts to the growth in Medicare spending, an announcer seems to suggest otherwise, intoning: “You paid into Medicare for years, every paycheck…. So now the money you paid for your guaranteed healthcare Is going to a massive new government program that’s not for you.”)

Of course, it goes without saying, that those folks who aren’t paying federal taxes are almost all paying state and local taxes—state sales taxes, real estate taxes (either on their homes or built into their rents) and possibly state income taxes too, which tend to kick in at a lower income level. If they buy gasoline, liquor or tobacco, or have telephones, they’re also feeding the federal purse.

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Of course not all of those escaping income taxes have modest incomes. In 2009, according to Internal Revenue Service studies, six of the 400 U.S. tax filers with the highest adjusted gross income (meaning AGI of at least $77 million) paid no U.S. income tax, while 19,551 U.S. households with income above $200,000 owed no U.S. or foreign income tax.

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