If you remember anything from the 2012 presidential election, it might be the moment when Mitt Romney got caught talking trash about half the country.

In a surreptitiously recorded speech, Romney can be heard telling a ballroom full of fat cats that “47 percent” of the people are “dependent upon government”and “pay no income tax” making them immune to the Republican message. “I’ll never convince them that they should take personal responsibility and care for their lives.”

There’s a less famous line from that race that sticks with me. It came from a 21-year-old man in Lincoln County who was clocking 60 to 80 hours a week packing lobsters for $10 an hour.

He was interviewed for a story about the upcoming election and he said he might not vote. He was working too hard to think much about politics, but if he did make it to the polls, he would vote for the candidate most likely to lower his taxes. Every dime matters, he said.

Taken together, the two stories tell you what’s so messed up about the politics of taxes in America. This kid who was working around the clock did see a big bite taken out of his paycheck every week headed for the U.S. Treasury. But he’s also likely among the people Romney said was “dependent upon government” and “pay no income tax.”

How could that be? Because when Romney and other Republicans talk about taxes they almost always mean federal income tax, which is levied at higher rates the more income you report, making it a top issue for the kind of people rich enough to fund presidential campaigns.

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But my guy at the lobster dealer is paying federal payroll tax, which funds just two programs: Medicare and Social Security. If he’s looking for a presidential candidate who will cut his taxes, he might as well stay home on Election Day, because that’s nobody’s priority. Especially not Republicans, even though they love to talk about taxes.

This came up recently when Sen. Susan Collins wrote an op-ed column for us defending her vote for the Republican tax reform package, in which she presented the scenario of a single mother with an income of $35,000. With an increase in the standard deduction and a partly refundable child tax credit, Collins said, this woman would go from owing the government money on April 15 to receiving a $1,010 check, a swing of “4,000 percent.”

Collins’ online critics jumped on the figure because it seemed like it must be a mistake. But it’s really just a sign of how little that the hypothetical mother in the senator’s scenario would have owed before – in income tax, that is. She’d still be paying more of her income in taxes than some of the people in Romney’s audience.

Assuming that the woman was not self-employed, she and her boss would be paying about $5,300 a year for Medicare and Social Security, shelling out more than 15 percent of her income. That’s about $100 a week that she wouldn’t have for food and rent. One $1,000 check is nice, but it doesn’t erase her whole tax burden, especially when you consider that she pays in state income tax, state sales tax and maybe property tax if she owns a home.

About three-quarters of Americans pay more in payroll tax than they do in income tax, but it’s never brought up in tax reform talks, maybe because the people who finance campaigns have already gotten their break.

For one thing, only earned income is taxed. People who make their living collecting interest or dividends get a free ride. And whether you are a lobster packer or president of a bank, you pay the about the same rate on payroll tax – unless you take home more than $200,000 a year. Everything above that mark is exempt, so a $1 million a year CEO would be paying a lower percentage of his income in payroll tax than the janitor who cleans the office.

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The reality is that almost everyone is “dependent on government,” even though it’s not always obvious.

The most expensive federal housing program is the tax deduction for mortgage interest. Everyone who gets health insurance from work is also getting a tax break worth thousands of dollars – making it the most expensive tax expenditure in the whole budget. Social Security is our biggest welfare program, but most of the people who receive checks are not poor, and some of them are very rich. Meanwhile, many of the people paying payroll tax to keep the program running are living on the edge of poverty.

It took another election, but Republicans have passed a tax bill for Romney’s fat cats. Who’s got a plan for my lobster packer?

Greg Kesich is the editorial page editor. He can be contacted at:

gkesich@pressherald.com

Twitter: gregkesich


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