Presidential Debate Round 2: Taxes

During the second Presidential Town Hall debate, specifically at 21:25 minutes into the session, a question was asked by Mary Polano towards governor Mitt Romney. The question asked was "You have stated that if your elected president you would plan to reduce the tax rates for all the tax brackets and that you would work with the congress to eliminate some deductions in order to make up the lost in revenue, concerning these various deductions, the mortgage deduction, the charitable deduction, the child's hacks credit, and education credits, what would be your position on those things which are important to the middle class?" Mitt Romney replied that he wishes to bring rates down, simplify the tax code, and have middle income tax payers to have lower taxes. Barack Obama respond to the question by stating that he wishes to giver lower and middle income tax payers relief and he has done that by 3,600, and 18 tax cuts towards small businesses. He says he is going to continue doing so and make upper class citizens pay more in taxes. The reason why he this hasn't gone through yet is because republicans wish to have tax breaks for upper class citizens and basically not cooperating with him.


Click Links Below To View Summarized Views On Each Candidates Tax Reform
Mitt Romney on Tax Reform
Barack Obama on Tax Reform         

The "47 Percent"

Going back a couple of weeks to September 17, a leaked video showed Mitt Romney stating,

"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 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...These are people who pay no income tax...my job is not to worry about those people.  I'll never convince them they should take personal responsibility and care for their lives."


When you first hear that you wonder, ‘what 47 percent didn't paying taxes’? 

According to a study done by the Tax Policy Center in 2011, about 47 percent of Americans did not pay individual income tax.  The fact that they did not pay any income tax does not mean they were excused from all other forms of tax (federal payroll, excise, state and local income, sales, and property taxes).    Here are two pie charts presented by the TPC:

From the first pie chart, we can see that yes, as Romney stated, there are 47 percent that did not pay income tax.  But again, income tax is only one form of tax.  The second pie chart further presents that from those 47 percent, only 18 percent do not pay payroll taxes (which includes withholding of income tax through wages, Social Security, Medicare, and unemployment taxes).  So about 28 percent who do not pay income tax do pay payroll tax.

This third pie chart, also provided by the TPC, gives us the reasoning behind the 18 percent that did not participate in paying federal income or payroll taxes.  The 18 percent included the elderly and the poor.  The elderly receive most, if not all, of their income from the Social Security checks.  These checks are non taxable therefore making it clear that their taxable income simply does not exist, so they are exempt from paying either form of tax.  The poor, that made less than 20,000, were exempt from paying either forms of taxes too as a result of the tax credit and the deductions.

Romney said that the 47 percent will vote for Obama "no matter what".  There is no proof between the 47 percent of people and the votes.  So Romney  focused on the 47 percent, without actually providing all information of who is included in that group (the elderly and the poor) and without providing proof that there is a relationship of that group and the number of votes that it goes towards his opponent, Obama.

Romney stuck by his statement until the time around the first presidential debate because he realized that it has taken a negative effect on his chances of winning.  During the first presidential debate we see that Romney never talked about the 47 percent comment and Obama didn't even call him out on his statement.  Two days after the first presidential debate, Romney decides to apologize and say that he was "completely wrong".

Sources:
Why Do People Pay No Federal Income Tax?
Payroll Tax
Romney's 47% That Don't Pay Taxes
Fast Checking Romney's '47 percent' Comment
Five Myths about the 47 Percent

On October 3, President Obama and Governor Romney had their first presidential debate. During the debate both parties told our nation what their plans and ideas were on taxes. President Obama had pointed out that Romney’s plan has been to cut taxes for the rich. Romney’s response to this was that he does not want to cut taxes for the rich, he however had made the comment that "We're going to cut taxes on everyone across the country by 20 percent, including, the top 1 percent" in a debate earlier this year. In the article below you can read a bit more about what Romney has been stating about taxes.

What Romney has to say about Taxes

In the link below you can see the entire video of the first presidential debate that took place this Wednesday, October 03, 2012. You may also see what Obama had to say about his ideas on taxes if you scroll down to the twelfth minute in the debate. 

Obama believes the economy is doing best when the middle class is doing well financially which is the reason why he has been cutting back taxes on the middle class for the past few years.

What President Obama said during the debate on Wednesday about Taxes

Study: Romney Tax Plan Would Most Benefit Wealthy Americans

This video is a study by the Non Partisan Tax Policy Center showing Romney's proposal on taxes claiming that it would benefit middle class citizens but does not. Instead, this negatively effects middle/lower class citizens because he is increasing taxes and giving large tax cuts to upper class citizens. The PBSNewsHour further discuss how these tax plans will affect the United States and its economy.