In 2012, then-Republican presidential nominee Mitt Romney was pilloried by the press for his comment that 47 percent of Americans pay no income taxes.
“Forty-seven percent of Americans pay no income tax,” Romney factually stated.
That was then. This is now.
According to a new report from the Urban Institute & Brookings Institution Tax Policy Center, “The COVID-19 pandemic and the policy response to it led to an extraordinary increase in the number of American households that owed no federal individual income tax in 2020.”
Specifically, in 2020, “nearly 107 million households, or about 61 percent, owed no income tax or even received tax credits from the government,” the report states.
What’s more, the percentage of Americans who did not pay a single penny in federal income taxes “increased by roughly 40 percent from the pre-pandemic year of 2019, due to a combination of a poor economy and multiple rounds of tax-based assistance to hard-pressed households,” the authors note.
To date, the federal government has allocated $4.6 trillion in COVID-19 relief funds.
This gargantuan amount of spending includes multiple rounds of stimulus checks, generous unemployment compensation, increased food stamp benefits, child tax credits and many more assistance programs.
Since 2020, the federal government has also suspended student loan repayments and instituted an eviction moratorium.
In other words, since 2020, the federal government has made it easier than ever for Americans to not have to work, let alone pay their debt and rent.
No wonder so many Americans didn’t owe a dime in federal income taxes last year. They were paid not to work.
But, back to Romney.
When he correctly observed that 47 percent of Americans don’t pay federal income taxes, he also correctly noted that many are “dependent upon government,” “believe that they are victims,” “believe the government has a responsibility to care for them” and “believe that they are entitled to health care, to food, to housing, to you-name-it.”
Romney’s observation was prescient in light of the surge in government dependence since the pandemic.
Interestingly, the surge in Americans’ not paying federal income taxes and taking more benefits coincides with a surge in support for socialism throughout the country.
Just a few weeks ago, Fox News released a poll showing that 59 percent of Democratic voters favor socialism over capitalism.
Yet, much more telling, one year ago – before the COVID-19 pandemic and the federal government’s $4.6 trillion COVID-19 relief spending spree – only 40 percent of Democratic voters said they had a favorable opinion of socialism.
Obviously, correlation does not necessarily imply causation. But it stands to reason that as the federal government (and many state governments) has expanded the welfare state in response to the pandemic, more Americans are growing comfortable with a political philosophy based on government control of the economy.
History shows that once entitlement programs are in place, it is almost impossible to curtail, let alone eliminate, them. History also shows that entitlement programs typically beget more entitlement programs.
In fact, we are seeing this phenomenon play out before us. This week, Congress will attempt to pass a $1.2 infrastructure bill and a $3.5 trillion budget reconciliation bill chock-full-of new entitlement programs.
We cannot afford this, especially when fewer Americans than ever are paying federal income taxes.
Chris Talgo (ctalgo@heartland.org) is senior editor at The Heartland Institute.