The Mathematics of Class Warfare

Mitt Romney’s campaign trail was rocky terrain this week, prompting a news cycle or two devoted to how bad a few news cycles he’s been enduring. And his troubles took a turn for the surreal: in a fit of self-opaqueness that should all by itself disqualify him for a second term, President Obama has accused Mitt Romney of cynically resorting to the divisive rhetoric of class warfare. New records are being set this campaign season for many things, now including bald-faced hypocrisy.

Still, Romney’s flippant remarks on the now infamous 47%, reported with such intense scrutiny one would think they amounted to declaration of principle as momentous as Luther’s 95 theses, were awkwardly worded at best, and sloppy pandering at worst. First of all, he presents the oft-repeated number, a familiar meme in conservative-libertarian discourse, too indiscriminately to count as a legitimate economic insight. While it’s simply true that approximately 47% of tax filers don’t pay any income tax, they do pay taxes, and at the very least, get hit by payroll collections. So only a paltry 18% actually elude both the payroll tax and federal income tax. One could reasonably argue that the current tax system is excessively progressive and surely places an undue burden at the top of the earning scale, but it’s simply wrong to declare that half the country is exempt from any and all taxation.

More significantly, Romney’s electoral math is shaky, collapsing several distinct demographic groups into one homogenous gang of freeloaders. That 47% is largely made up of individuals who fall below the poverty line, senior citizens, and low income families with children. While it is, of course, true that the US struggles with an enervating culture of dependance and entitlement, that number in itself, wrenched from a more precisely articulated context, overstates the issue. And Romney alienates some potential voters since it is flat wrong that the entirety of that 47% is in the bag for Obama: he owns the poor, much to their detriment, but seniors constitute a much more politically complex group, and families with children are a natural constituency for Republicans. Besides insulting a portion of his base, Romney put himself in the awkward position of advocating tax increases of any kind, let alone on lower income parents.

Nevertheless, Romney’s gaffe was hyperbole intended for a select audience, opportunistically (and dishonestly) seized by one constituency genuinely in the tank for Obama, the main stream media. It is no less polarizing, and more economically defensible, than Obama’s pathological preoccupation with the top 1% of earners. For the sake of his “soak the rich” approach to taxation, otherwise known in accounting circles as the “cripple the most productive capital” plan, what he means by the top 1% (those households pulling in $250,000 per year) is really the top 4%, about 3.8 million households, some 6 million individuals, many of them small business owners, who pay close to 60% of all federal income taxes. Obama’s macroeconomic sorcery, squeezing a solution to what ails us from an already well-pillaged hamlet of earners, should be an abiding magnet of media attention.

In trying to better understand this ersatz breaking news, it’s helpful to consider another moment in media hyperventilation, the imbroglio over Romney’s tax returns. Hammered in the press and hounded by his partisan adversaries to release even more of his tax returns, the reaction when he finally does is the breathless amazement of collective discovery: Romney is rich! Democratic operative David Axelrod was predictably incensed:

“And at the end of the week, we saw him manipulating his own tax returns to try and plump up his portion of taxes to 14 percent … two months ago, on your own air, he said that anybody who didn’t take the deductions they were owed wasn’t qualified to be president. Well, I guess he’s not qualified because that’s exactly what he did last week to try and get his number up from 9 or 10 percent to 14 percent.”

Just to be maximally clear, Axelrod is bemoaning the fact that Romney paid too much in taxes because he didn’t claim all the charitable deductions to which he was entitled. And that turns out to be a substantial amount since the man is laudably generous: last year alone he gave $4,072,772 to various philanthropic causes, about 30% of his gross income. And over the last 20 years, Romney has averaged about 13.45% in charitable giving. A little mathematical extrapolation shows that, over the course of his lifetime, Romney has likely given somewhere in the neighborhood of $50 million to charity.That’s a lot of alms.

Compare that to Obama, who only gave 5.5% from 2005-2008. And those were years running up to his bid for the presidency, when his public recognition was rising with his political star. Prior to that, from 2000-2004, his giving averaged less than 1%.

In case anyone is wondering, the Bidens have averaged less than a quarter of one percent in annual giving.

Still, in response to the public release of Romney’s tax returns, Obama ignored his generosity and directed his comments at his tax burden:

‘I can afford to to pay a little more and Mitt Romney can sure afford to pay a little more”.

It is infinitely telling that Obama immediately identifies shouldering one’s fair share with the federal confiscation of taxes, as if the voluntary decision to make contributions doesn’t count as sufficiently philanthropic because it bypasses the government as middle man. Obama can, of course, pay as much as he likes, and by the looks of his tax returns, should reflect on redistributing some of his own considerable wealth to the less fortunate as a matter of personal decision, rather than bureaucratic compulsion.

This cleavage in worldview goes to the heart of what truly distinguishes liberals and conservatives when it comes to taxes and their proper function: liberals generally understand charitableness as a governmental responsibility as opposed to an individual one. Conversely, conservatives generally embrace generosity as a individual virtue whose authenticity presupposes free moral choice: it’s not an act of charity if essentially compelled by the state.

In his provocative work on charitable giving, Who Gives?, Arthur Brooks argues that individual generosity is a function of several variables:

“Strong families, church attendance, earned income (as opposed to state-subsidized income) and the belief that individuals, not government, offer the best solution to social ills — all of these factors determine how likely one is to give.”

As a consequence of liberals’ ideological statism, their tendency is to transform complex moral issues regarding poverty, equality, and economic opportunity into technical problems ultimately resolvable by technocratic solutions. As Pope Benedict XVI puts in his indispensable encyclical Caritas in Veritate, these are spiritual and moral problems, and so “not primarily of the material order”. Generally speaking, “institutions by themselves are not enough” partly because, like individuals, they are vulnerable to corruption and partly because any genuine moral progress “involves a free assumption of responsibility in solidarity by everyone” that is negated by excessive state coercion. More specifically, Caritas is devoted to the virtue of charity understood in light of the “commitment to the common good” which has “greater worth than a merely secular or political stand would have.” According to Benedict, true charity is an individual vocation that can only be properly practiced by a free and responsible person—its exercise surely has political implications but is not first and foremost a political virtue. While charity “demands justice” it also “transcends justice”—authentic charity is not reducible to some technocratic mechanism or easily encouraged by bureaucratic regulation. Rather than a duty of the state, it is an obligation of the soul.

According to Benedict, conservatives too, specifically market libertarians, also need to take into account the fact that “every economic decision has a moral consequence” and that the ultimate goal of any morally tenable economy is “fully human outcomes”. This means they need to navigate between the twin excesses of “social privatism” and “paternalistic social assistance”. Another way of putting it is that the “principle of solidarity”, our sense of community and shared obligation” has to be appropriately balanced against the “principle of subsidiarity”, or the special obligations we first have to our own, and the freedom from intrusion necessary to properly consummate these obligations.

Our country is starved for a genuine debate over the proper aims and limitations of government when it comes to social welfare, and by extension, a spirited exchange of competing ideas regarding the duties of citizenship. Obama has no interest in such a dispute and the media persistently shields him from it. Romney, however, should eschew hackneyed platitudes and well-trodden talking points and engage the public forthrightly on what it means to be an American, and what we owe to other Americans as a matter of moral and civic obligation. The turn to candor alone might shame his opponent, if the comparison between their philanthropic activity did not.

Category: Election 2012, Featured