Wednesday, September 19, 2012

I Am the 47%

I haven't been on Facebook yet today, but I can only imagine that the subject line of this blog post has become cliched even moments after I thought of it. Alas, there's nothing new under the sun.

And that includes Mitt Romney sticking his foot in it, which seems to be a pretty regular event. The latest kerfuffle is over his comments back at a spring fundraiser with wealthy donors, where he was caught on hidden camera saying:
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 that 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. 
[M]y job is is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives.
So let's do a little personal case study of someone who falls in this 47%, voted for Obama and, according to Romney, cannot be convinced to "take personal responsibility."

My 47% Street Cred

To be honest, it would be more appropriate to say "I was the 47%" because in 2011 I actually did pay 1.12% in federal income taxes, on top of the state income taxes (4.37%) and federal payroll taxes. However, for several years before that, I was not paying income taxes:
  • 2010: 0.00%
  • 2009: -0.85%
  • 2008: (can't find, but it was 0% or very near 0%)
  • 2007: 10.37%
So, what happened in 2008 that caused my taxes to drop so much? My income from my day job has increased every year. Well, there were actually several different factors that figured into the low tax rate, all of which can be traced back to 2008:
  • I got married.
  • I became a stepfather.
  • I began donating 10% of my income to charity and local churches (and itemizing deductions accordingly).
  • I became a landlord. (My wife's previous home became a rental property.)
  • I learned about the pro-business tax code and began intensely keeping records and making use of deductions to legitimately reduce my taxable business income from freelance writing.
  • My wife returned to college.
Oh, yes, a couple of other things happened in 2008 that should have raised my total income tax:
  • I started writing String Theory For Dummies, which resulted in a net income increase, so actually raised my gross business income for 2008 and 2009 both.
  • I received an greater-than-10% raise, due to restructuring at work and them realizing that they were seriously underpaying me.
Ah, yes, and I finished my Master's Degree, paid for by reimbursement from my company (so I couldn't deduct any significant amount of it). No real bearing on my tax situation ... although it might have some bearing on that whole "personal responsibility" line.

Who Made Me Dependent Upon the State?

So the driving forces behind my sudden drop in income tax liability were primarily the following (in no particular order, since I don't feel like looking through old tax forms to figure which benefited me most):
  • Small business tax deductions and credits
  • Married filing jointly status
  • Kid-related deductions and credits
  • Rental property depreciation deduction
  • Itemized deductions: Charitable (and church) donation and mortgage
  • Education deductions for my wife
A quick look at this list really makes one wonder which of these deductions Mitt Romney is planning to revoke or reduce in order to wean me off of my "entitlement" mentality.

In fact, aren't these precisely the sorts of things that Republicans typically argue should reduce your tax liability even more? Isn't it really the Republicans who have decreased taxability so severely that it took me 3 years of raises and working on my writing career to work my way up to 1% income tax? Does anyone else recall Mitt Romney re-affirming his right to reduce his tax liability to the legal limits, when it was released that he way paying 15% in taxes?

Note to the IRS:
I said "legal limits."
I am very careful with my deductions and record-keeping.
If a deduction is questionable, I don't take it.
So, really, it would be a waste of time to audit me.
A waste of my time and yours.
Keep up the good work, guys!

According to Mitt Romney, this places me in a very unenviable position. I am now counted among those "who are dependent upon government, who believe that 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."

I will concede that I am probably at the top of the 47% of which Mitt Romney speaks. While he doesn't care about most of them, he maybe cares a little bit about what I think. See, I'm one of these moderates who voted for Obama in 2008 and wishes his policies had done better. And I am giving Mitt Romney the chance to convince me that his policies will do better, so that I can vote for him today.

However, we've seen the results of his policies. His policies removed my tax liability. His policies have, apparently, turned me into a entitlement-seeking person, unable to take care of my own life, let alone the lives of the two children tragically entrusted to my care by the vagaries of fortune and chance! Those poor children! How will they suffer, to be raised by a father with so little self worth?

I dare ask, is there any solution?

Yes, I believe there is ...

I Need to Be Taxed More ... and So Do the 53% Above Me

It's totally absurd, with the amount of income I bring in, that I am paying only 1% income tax. I'm not wealthy, by any stretch of the imagination. (Well, unless you compare me to the 95% or so of the world that makes less income than I do ... in which case I'm doing alright.) I have to crimp and save just like anyone else, and there's never quite enough to do everything I want.

However, I also have two kids. I'm a member of a community and a nation. And we're overspending. To fix that, we need to do what any businessman in that room with Mitt Romney would do if faced with a tough personal or corporate budget. They would figure out how to:
  • Increase revenue
  • Cut expenses
We've let taxes drop too low and they need to go up a bit on the middle class. Not a lot, but at least a bit. Cap some deductions, such as the charitable deduction. Either an absolute cap or as a percentage of income. There are a lot of options here.

But to set the country on a course to fix the deficit, taxes have got to go up. Mitt Romney has made a pledge not to raise taxes. I'm hoping that he's a good enough businessman to know that he was lying when he made that pledge, because there's no way he can be serious about the deficit while clinging to it.

Of course, there is a third option that the businessmen in that room may be familiar with, especially if Trump was there. It's an option I unfortunately had to exercise in 2006. It's one that isn't fun and, as a patriotic American, it's one I hope we can avoid:

Bankruptcy.

Update:
Sept. 26: I found out about the blog We Are the 47%, which shares open letters (ostensibly to Romney) about individual experiences within the 47%. Here's an overview of some of the people who have stepped forward through that website:
We have letters from a Pulitzer Prize-winner in fiction and a Pulitzer Prize-winning columnist, as well as an 82nd Airborne paratrooper, a recipient of a Purple Heart, the wife of a med student, a special education teacher, a union carpenter... We have letters from those who share Mitt Romney's faith, but disagree with his disregard for the 47 percent; and we have a letter from someone who, like Romney, graduated from Harvard Law School, but, unlike Romney, made the financial sacrifice to work as a public defender ...
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