The 47% who don't pay federal income tax include middle class, poor, retirees

Mitt Romney wasn't wrong when he said almost half of Americans don't pay federal income taxes. Some of those people are retired, some are poor. Another big reason why some don't pay? Tax cuts.

Republican presidential nominee Mitt Romney is making waves over comments he made at a fundraiser. Specifically, when he said, "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..."

Romney was referring to the nearly half of Americans who don't pay federal income taxes.

In his reporting for the New York Times, Washington bureau chief David Leonhardt has spent a lot of time looking at that 47% figure.

"For a lot of people [income tax] isn't the main tax they pay, it's not the main federal tax they pay," says Leonhardt.

The 47 percent are a relatively diverse bunch -- including retirees who no longer pay income taxes, the poor, and people who are not making enough money right now to bump up into a different tax bracket.

"There are two main reasons for the people who aren't making enough money," Leonhardt says. "One is that the last few presidents have all cut taxes... and the second is that we've had a really bad 10 or 12 years economically."

Many of the policies that have reduced the federal income tax rolls are favored by Republicans, namely tax cuts for middle income earners. The GOP has two competing strains on federal income taxes. Some want to cut as many taxes for as many people as possible. Others like to highlight the low participation rate, and want to encourage everyone to contribute a little bit. That's not always an easy political mix.

"You see these tensions within Mitt Romney's own presidential campaign. On one hand you have these remarks he said about the 47 percent. On the other hand, you have several promises from him not to raise taxes on people who don't make that much money," says Leonhardt.

And there's another, much larger tension at play. Most Americans want lots of government services like subsized health care, but also want low taxes. That's the crux of what drives up our deficit.

"Whether you really liked Mitt Romney's 47 percent answer, or you really don't like it," Leonhardt says, "Either way, we have a government that doesn't add up... and that can't continue forever."

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.

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