A leaked video captured Mitt Romney at a fundraiser in May claiming that 47 percent of Americans don't pay income taxes and will vote for President Obama no matter what because they feel "entitled" to free support from the government. The Tax Policy Center explains that about 46 percent of Americans did not pay income taxes last year because they did not make enough money to qualify for the tax, but they still carry a significant tax burden. Lolita Lopez reports from Burbank for the NBC4 News at 5 p.m. on Sept. 18, 2012.
Presidential candidate Mitt Romney has come under fire over a secret video recorded during a May fundraiser that shows the former Massachusetts governor apparently saying 47 percent of Americans who do not pay income tax "are dependent upon government" and "believe that they are victims"
Leigh Ann Clark is among a portion of Americans who don't pay federal income tax, but says she’s far from a victim.
“I get $70 a month in food stamps right now and I get no cash assistance,” Clark said.
As she walked into the county social services office to apply for benefits, the 36-year-old college graduate said not paying income tax does not make her a victim. Nor, as Romney stated, does she feel "entitled" to government benefits. Right now, they are a means to an end.
“I'm out there looking for work. I'm looking for work back home In Michigan,” said Clark, who holds two bachelor degrees.
Clark lives out of her car and is among the working poor, a large portion of those who do not pay income tax, according to the Tax Policy Center which first reported the findings last year.
The center found that 46 percent of Americans would not be eligible to pay federal income tax in 2011, the most recent year for which data is available, because of their low income or specific tax breaks benefiting low-income households. In 2009, the center estimated about 47 percent of Americans would fall into that category – the figure Romney used in his private address to donors.
Nearly half of the people who do not pay income taxes do so because their incomes are low. For example, the study cites a young couple with two children earning less than $26,500 will pay no federal income tax because their $11,600 standard deduction and four exemptions of $3,700 each reduce their taxable income to zero.
“The basic structure of the income tax simply exempts subsistence levels of income from tax,” the study reported.
About three-fourths of the remaining group that pay no income tax is either senior citizens or low-income working families with children. These taxpayers get breaks excluding some Social Security benefits from being counted as taxable income, as well as tax credits that primarily help seniors and low-income workers with children.
Households with an income of less than $50,000 make up nearly 90 percent of those households that do not pay federal income tax.
Still, the study emphasized that though these Americans still pay taxes.
“Commentators have often misinterpreted that percentage as indicating that nearly half of Americans pay no taxes,” the study reported. “In fact, however, many of those who don’t pay income tax do pay other taxes—federal payroll and excise taxes as well as state and local income, sales, and property taxes.”
Clark said she made about $12,000 last year, and about half of that went to taxes.
Barbara Hymdman, 74, is part of the 46 percent of Americans who do not pay income tax.
“They take a little over $100 out of my social security for the Medicare,” Hymdman said.
She pays another $400 for supplemental insurance – all this out of her $1,400 monthly social security check. While she pays some income tax on retirement funds, without the assistance she says she could not survive.
“Seems like I’m putting out too much money for what I bring in. It makes it very difficult, I watch what I eat, what I buy and I am sure a lot of us aren't eating the way we should be either,” Hymdman said.
The Tax Policy Center goes on to define the 46 percent like this: Most people do not take advantage of tax breaks but rather have low incomes and families or are elderly and qualify for breaks.
Education credits are a big factor in households making $50,000 to $100,000, and some households with incomes above $100,000 also benefit from itemized deductions or reduced tax rates.
Despite Romney's claim that the “47 percent” will vote for President Obama, both Clark and Hymdman are still unsure of what will happen in November when they go to the ballot box.
“I bounce back and forth because it seems every day something is said by Obama and something is said by Romney. It's a very hard decision,” Hymdman said.