Before saying that 47% of Americans don’t pay income taxes in his now familiar comments, Mitt Romney said this: “. . . there are 47% who are with him, who are dependent upon government, who believe that they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it.”
The taxation portion of the statement was not a standard part of the Republican message (Romney has since clarified that he just meant we need a stronger economy). But the discussion of dependence on government is at the heart of the Republican case against Democrats and is fully consistent with the “maker vs. taker” theme that often shows up in Republican campaign rhetoric. On this point, Romney was not off-message, likely making this part of the argument more central to the ongoing dynamics of the campaign. The Republican line is that there is a large group of takers in American society – Romney’s initial estimate was 47%. Here, I attempt to gain some empirical leverage on this question using information about work experience, receipt of government benefits, and demographics from 2011 Current Population Survey March Supplement microdata.
Creating a working definition of takers is tricky. A core conceptual problem is that making versus taking is a matter of degree. As John and Suzanne Mettler have pointed out, nearly all of us are takers to some extent. And nearly everyone contributes to government through taxes of some sort at the national, state, or local level. The balance between benefits and taxes might be the best indicator of making versus taking, but accurate data on tax payments at all levels of government are not readily available. In addition, when politicians talk about makers and takers, they speak in dichotomous terms. It’s not a sliding scale. Either you’re a maker or you’re a taker. Since the rhetoric is dichotomous, my strategy for identifying takers will be dichotomous as well.
So who should we count as a pure taker? As a starting point I think it’s fair to eliminate workers and those not receiving government benefits. Workers are not purely takers because they pay payroll and other taxes. In addition, workers are MAKING, earning income through their labor and therefore taking some responsibility for their own well-being. Non-beneficiaries are not taking from the government because they don’t receive benefits. So here’s an initial estimate, in which I’ve divided the 15-and-over population into three groups: workers, non-workers with no government benefits, and non-workers receiving benefits. Only the last group would fall under this definition of taker.
So we have an initial possibility of 24.7% takers. That’s a pretty big number. It’s not 47% but it’s an appreciable group of Americans. Are all these people really takers? Let’s drill down into that 24.7%. Why are those not working and receiving benefits not working? Why are they not makers?
Of the 24.7% of Americans who did not work and received government benefits in 2010, more than 70% are either disabled or retired. 7.7% are not working in order to care for home or family – not a group that family values conservatives typically malign. 12.8% are going to school, which likely indicates at least a degree of taking responsibility for oneself. So a large portion of those not working and receiving benefits – the potential takers under the broadest definition – would likely not be considered takers even by some of those promulgating the makers vs. takers argument.
However, some of the people who we are tempted to let off the hook might actually be more culpable than they appear at first blush. Some retirees may still be young and able to work. Some people caring for home or family might be part of a household in which nobody works, not a traditional stay at home mom or a child caring for an aging parent. So let’s re-create the initial chart and divide the non-working government beneficiaries into three categories: those who are non-working age, disabled, or attending school; those who are non-students, able-bodied, and working-age in households with no other earners; and everybody else. We’ll define working age as 18-65 in order to maximize our ability to find takers (prime working age is usually defined as 25-55). Excluding those living in households with other earners eliminates people who are at least part of a maker household. This last excluding factor is probably the most controversial, so I separate it from the others in order to see what difference it makes.
The bottom line here is that there aren’t that many takers in America. The most restrictive definition pegs the percentage of takers at 2.4%. If we’re willing to include people in households with at least one earner, that number increases to 5.2%. Lots of people, even quite rich people, receive government benefits in the United States, and that is a reasonable thing for true fiscal conservatives to be frustrated about. But these numbers simply don’t line up with the rhetoric of a massive class of lazy people taking advantage of the rest of us while eating solely at the trough of government.
Finally, it’s worth pointing out that these are really upper-bound estimates. Being a taker involves motives as well as work and benefit status. Takers, so the argument goes, feel no responsibility for themselves and believe that they are entitled “to you name it.” The CPS data don’t allow us to examine motives, but if we could, we would likely find even fewer takers.