Examining economic inequality and the 47%
“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 […]. I’ll never convince them they should take personal responsibility and care for their lives,” said Mitt Romney in leaked footage from a fundraiser. Mitt Romney was referring to the 47% of Americans that do not pay federal income tax.
On Monday January 24th, The Villanova Law School held its annual Dr. Martin Luther King, Jr. lecture. This year’s lecture was titled “Skin in the Game: Invisible Taxpayers, Invisible Citizens?” given by Professor Mildred Robinson of University of Virginia School of Law. In his leaked comments, Mitt Romney was essentially criticizing these Americans for expecting political gains and government protection without having any “skin in the game,” or money committed to a project. Professor Robinson explained that to have skin in the game means to have something at risk for one’s own interests. In politics, this is usually a personal financial risk. Professor Robinson argued that although 47% of Americans do not pay a federal income tax, these Americans do still have skin in the game. The fact that they do not pay a federal income tax is the result of deliberate political measures. They also still pay payroll, gas, state and local taxes in addition to other federal taxes. The 47% may in fact pay more than their fair share in taxes because of the inherently regressive nature of many flat state income taxes. While it is not the intent of flat taxes to be regressive, they result in creating greater costs for those who have less to pay. Pennsylvania is one of these states with such an income tax. Pennsylvania is also one of the few states without an earned income tax credit.
Professor Robinson also noted that Pennsylvania has the highest sales tax at 6%. She argues that the 47% are often hit harder by such retail sales taxes, property, sin and prepared food taxes. For example, many that do not qualify for the federal income tax live in a “food desert,” or an area where fresh foods and groceries are not readily available. They are also less likely to have the time or means to prepare these raw foods and must rely on prepared foods for their nutrition. They therefore are more likely to pay the prepared food tax than those that pay a federal income tax.
The 47% are also more likely to pay “sin” taxes, or taxes on cigarettes, alcohol and gambling. Pennsylvania received 5.4 billion dollars from casinos between 2009 and 2013. This money went to property tax relief. As Professor Robinson explained, these sin taxes clearly hold weight in state funding and are borne disproportionately by the poor. Their payment of these taxes still does not seem to give them “skin in the game.” This is in part because these activities are deemed undesirable, and those who pay them are therefore burdened with low visibility. Little attention is paid to these taxes, regardless of the weight that they hold.
Increased reliance on these kinds of low visibility taxes creates opacity instead of transparency in the system. People whose skin in the game comes from these low visibility taxes do not get the political credence they deserve. This is not because they do not have skin in the game, but because their investment is in places society has deemed undesirable.
These views compromise society’s ability to deem fairness. Professor Robinson argues that ignoring the political voice of the 47% only increases the wealth gap which itself results in part from the long term consequences of racial discrimination. The view of the 47% as a group of citizens who only rely on government without taking any responsibility themselves is one that ignores reality.
Martin Luther King, Jr. himself was a strong voice for economic justice, believing it to be tied to racial inequality. He believed that economic justice could only be reached with an Economic Bill of Rights for all citizens. These rights would include that to a job, education, housing and a living income. Professor Robinson noted that his original Economic Bill of Rights did not mention taxes. She argues that if Dr. King were alive today, he too would argue for “fair allocation of the burden of financing government.” As Professor Robinson argued, the 47% who often lack political voice do not lack skin in the game.
By Elena Giannella ’15