Syracuse (WSYR-TV) -- Reaction is still pouring in after a video of Mitt Romney was leaked to the media. In it, Romney says that 47 percent of Americans don’t pay income taxes and believe they are victims. He says those people will vote for President Obama.
The Obama camp has been pouncing on Romney with criticism, but is there truth behind Romney’s words?
“You really don’t know what to believe. Who is telling the truth? Who is giving you all the facts,” said a confused Durand Carrington.
It is true that 46.4 percent of Americans don't pay personal Federal income tax, according to the
latest numbers from the Tax Policy Center. SU Maxwell School Economics Professor Michael Wasylenko says the tax system was designed decades ago to exclude a lot of people, so they'd be encouraged to work.
"Most of the people we are talking about are working. They have money. They just, you have a standard deduction, you get an exemption for each child, and if you are working, you get the earned income tax credit,” Wasylenko said.
Those credits knock many American's below taxable income levels. The actual number of people who don't pay Federal income tax or payroll taxes is 18.1 percent and most of them are elderly.
“A large percentage of Americans don’t pay income tax, but we always forget that they always pay payroll tax, they are paying social security, they are paying Medicare…Medicaid,” said High School Government Teacher Michael Root.
"People who don't have a lot of income still have a lot of personal responsibility and are good decent hard working people who get up everyday and go to work and care for their families and get their kids to school,” said Sandra Ambrozy, who’s concerned about the narrative created for the working poor.
Wasylenko says the government hasn't had a major tax overhaul since the Reagan administration. He believes the discussion raises valid questions about spending and the list of tax deductions offered to all income levels. The bigger concern may involve jobs.
"The other way to look at this issue is...gee, if they made more money per hour, their income would go up and they'd get in the tax system,” Wasylenko said.
Of the people not paying taxes, the Tax Policy Center says 44 percent were moved off the rolls through benefits for the elderly. Another 30 percent moved off the tax rolls due to credits for children and the working poor.
