Exactly who are the real moochers among us?
Employers match this amount, so when you calculate the FICA tax -- the Federal Insurance Contributions Act tax -- it totals 15.3 percent, topping Mr. Romney's federal tax payment of 14.1 percent on income. And Romney did not pay a penny in FICA taxes, because none of his income was earned as a salary or wage. It was all interest, dividends, capital gains, royalties, trusts, business income, and refunds! So who's mooching?
Here in Washington, the less you make, the greater proportion of taxes you pay. Why? Because we don't have a progressive state income tax, so we rely on the sales tax. If you earn under $20,000, you pay about 17 percent of your income in state and local taxes; at $50,000, 11 percent; at $100,000, 7 percent. If you make over half a million dollars, you pay just 2.5 percent. And that goes down further as your income goes up from there.
Add it all up -- federal, state, and local taxes -- and Washington families with incomes of $18,000 pay just over 20 percent of their income in taxes; at $50,000, just under 25 percent; at $100,000 the effective rate is 23 percent, as it is for many families in the top 1 percent. But Mr. Romney, with an annual income somewhere out there in the stratosphere, pays less than 19 percent for all taxes combined. And who knows what he paid or didn't pay in 2009, 2008, 2007, 2006, 2005... .
Mr. Romney wants to pretend there is a divide running down the middle of America. There is a divide, but it is more like 99.5 percent of Americans are on one side, and .5 percent are on the other. And the vast majority pay more in taxes, as a proportion of income, than Mr. Romney and his wealthy donors do.
There's one other thing missing from this debate -- and that's recognizing the value of working together. Take those payroll taxes, for example. That's how we make sure Social Security and Medicare are there for everyone. Given the stock market's gyrations, and companies stepping away from pensions, we all need Social Security now more than ever. As for Medicare -- good luck getting health coverage in the private market when you are over 65.
We earned these health insurance and income benefits. We paid for them. So when Mr. Romney and other politicians, both Republicans and Democrats, talk about Medicare and Social Security reform, don't be fooled by the "reform." It is code to take apart Medicare, whittle down Social Security, and use the money to make up for what Mr. Romney and his friends should have been paying in taxes.
Social Security and Medicare are powerful symbols of what citizens can do for themselves in a democracy. The only way to undermine them is to undermine people's faith in them. That's a lot easier to do this if the public believes that half of the country are moochers and the other half are the payers. After all, why should we pay for the moochers?
What must be galling about government to Mr. Romney and friends is that it does benefit regular people -- that is, middle class taxpayers. Think K-12 education, Everett Community College, and the University of Washington. Think public health, making sure the food in our restaurants is safe to eat, and the water we drink is clean. Think of the Snohomish Public Utility District and the power we depend on every day, every hour, and every second. Think of the parks we enjoy, the roads we drive on to get to those parks, and the assumption of our own personal security and freedom.
These services are for all citizens. They are not a perk for the very wealthy, but a public right in this democracy. We pay for these services with taxes ... all of us, poor, middle class, and the well-off chip in. We are not a house divided against each other. We are our neighbors' keepers.
John Burbank is the Executive Director of the Economic Opportunity Institute (www.eoionline.org). He can be reached via email at firstname.lastname@example.org.
Our new comment system is not supported in IE 7. Please upgrade your browser here.