Who are Romney's "47 per cent"?

UPDATE: and where are they?

Mitt Romney delivered a knock to his campaign last night after he said that Barack Obama's voters were the 47 per cent of Americans who are “dependent on government”, do not pay tax and “believe that they are victims”.

He has since described his comments as “not elegantly stated” and “off the cuff”, but hasn't retracted them: leaving untouched his picture of 47 per cent of America as tax-avoiding scroungers.

The most obvious spot-the-difference with this picture is that nearly every American in work pays many forms of tax - including social security tax, petrol tax and sales tax. The rest are mostly looking for work, falling back on part time jobs. The tax Romney is talking about is income tax: the "47 per cent " number comes from the Tax Policy Centre, which broke down the statistic to find that half the number fall below the poverty threshold required to pay the tax, and the other half are entitled to bypass it, because, for example, they are pensioners. The New York Times summarised the analysis:

It found that about half of the households that do not pay federal income tax do not pay it because they are simply too poor. The Tax Policy Center gives as an example a couple with two children earning less than $26,400 a year: The household would pay no federal income tax because its standard deduction and other exemptions would simply erase its liability.

The other half, the Tax Policy Center found, consists of households taking advantage of tax credits and other provisions, mostly support for senior citizens and low-income working families.

Romey's 47 per cent remark touches on a truth, but is not one. These are not people shirking their tax responsibilites, but people who are not and should not be required to pay income tax in the first place. 

UPDATE 18/09/12, 14.30:

The Tax Foundation have published a map showing where the 47 per cent live (via Business Insider) - and it's the red states. Most of them come from a Republican base: of the 10 states with the highest proportion of non-income tax payers, nine are Republican. 

Mitt Romney and wife. Photograph: Getty Images

Martha Gill writes the weekly Irrational Animals column. You can follow her on Twitter here: @Martha_Gill.

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The 5 things the Tories aren't telling you about their manifesto

Turns out the NHS is something you really have to pay for after all. 

When Theresa May launched the Conservative 2017 manifesto, she borrowed the most popular policies from across the political spectrum. Some anti-immigrant rhetoric? Some strong action on rip-off energy firms? The message is clear - you can have it all if you vote Tory.

But can you? The respected thinktank the Institute for Fiscal Studies has now been through the manifesto with a fine tooth comb, and it turns out there are some things the Tory manifesto just doesn't mention...

1. How budgeting works

They say: "a balanced budget by the middle of the next decade"

What they don't say: The Conservatives don't talk very much about new taxes or spending commitments in the manifesto. But the IFS argues that balancing the budget "would likely require more spending cuts or tax rises even beyond the end of the next parliament."

2. How this isn't the end of austerity

They say: "We will always be guided by what matters to the ordinary, working families of this nation."

What they don't say: The manifesto does not backtrack on existing planned cuts to working-age welfare benefits. According to the IFS, these cuts will "reduce the incomes of the lowest income working age households significantly – and by more than the cuts seen since 2010".

3. Why some policies don't make a difference

They say: "The Triple Lock has worked: it is now time to set pensions on an even course."

What they don't say: The argument behind scrapping the "triple lock" on pensions is that it provides an unneccessarily generous subsidy to pensioners (including superbly wealthy ones) at the expense of the taxpayer.

However, the IFS found that the Conservatives' proposed solution - a "double lock" which rises with earnings or inflation - will cost the taxpayer just as much over the coming Parliament. After all, Brexit has caused a drop in the value of sterling, which is now causing price inflation...

4. That healthcare can't be done cheap

They say: "The next Conservative government will give the NHS the resources it needs."

What they don't say: The £8bn more promised for the NHS over the next five years is a continuation of underinvestment in the NHS. The IFS says: "Conservative plans for NHS spending look very tight indeed and may well be undeliverable."

5. Cutting immigration costs us

They say: "We will therefore establish an immigration policy that allows us to reduce and control the number of people who come to Britain from the European Union, while still allowing us to attract the skilled workers our economy needs." 

What they don't say: The Office for Budget Responsibility has already calculated that lower immigration as a result of the Brexit vote could reduce tax revenues by £6bn a year in four years' time. The IFS calculates that getting net immigration down to the tens of thousands, as the Tories pledge, could double that loss.

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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