When people are poor (making minimum wage) or unemployed or students or retired or disabled, maybe they don’t pay very much in federal income taxes. But they pay the following other taxes:
Payroll taxes, including Social Security and Medicare (if they have a job).
State sales taxes (if they buy things in stores).
Local property taxes (either because they own a house or because they pay more in rent so the landlord can pay property taxes).
Excise taxes on things like gasoline.
Taxes and fees on drivers’ licenses, telephones (both land lines and cell phones), cable TV, permits for doing things, etc.
Almost all of those other taxes are regressive, meaning poor people pay a bigger percentage of their income on taxes than rich people do.
Let’s look at payroll taxes (social security and medicare). If you earn money, you pay social security a flat rate up until $110,000. Then you pay no more. So the poor and middle class pay 4.2 percent (plus the employer pays 6.2%). People who earn a lot of money pay nothing after 110K. People like Mitt Romney pay nothing to social security (because capital gains don’t count as ordinary income). If you have capital gains, you also pay about half the federal income tax rate.
I saw a graph recently that said recent U.S. government revenues include 41% from individual income taxes and 40% from payroll taxes. Let’s stipulate that 47% of poor people don’t pay income taxes. OK. What percentage of poor people pay payroll taxes? How much of his income from the last 10 years did Romney put into social security and medicare? Not very much. Probably close to zero. Plus he only paid 15% on his capital gains (minus his deductions for donating to the Mormons).
And what about sales taxes? Let’s say you earn about 20K and you spend all of your money. And the sales tax is 8%. That means 8% of your income goes to the state for sales tax. Let’s say you’re doing pretty well and you make 200K and you spend 100K in local stores (so you pay $800 in sales taxes (8%), but you made 200K). The rest you put in the bank or something. You pay only 4% of your income in sales taxes. That poor person who made a tenth as much as you paid 8%. You paid 4% because half your income was not subject to sales taxes. People like Bill Gates or Warren Buffett pay the same sales tax on a candy bar as anyone else, but if you look at the total amount they pay in sales tax, as a percentage of income, they pay much less than poor people.
Now let’s compare the 20K person to the 200K person. Suppose both of them use the same amount of gasoline to get to work and drive to stores and they both pay $200 in gas taxes per year (I’m just making up these numbers). To the poor person, that’s 1% of their income. To the rich person it’s 0.1% of their income.
Let’s look at retirees who paid income taxes their whole life and paid into social security and medicare. Is Romney saying they’re leeches? They’re collecting what was promised them.
And what about students studying at college, so they can get a decent job? Maybe they took out student loans and are working at a part time job. They’re planning to pay back every cent with interest. Is Romney calling them leeches, because they aren’t paying income taxes?
What about soldiers getting disability pay? Maybe they’re getting medical treatment at the VA. Does Romney call them leeches who only want a government handout?
Romney just called 47% of Americans leeches. I can’t tell you how pissed off I am.
One more thing. The State of Washington has a pretty high sales tax (about 10%) but there is no state income tax. A couple years ago, the state voted on instituting a state income tax (it failed). And by the way, Bill Gates's father was one of the spokesmen for a progressive income tax. Prior to the vote, one of the weekly tabloids in Seattle (either the Stranger or the Weekly) published this graph showing how regressive the taxes in WA are:
Right there in graphic terms, is the definition of regressive taxes.