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Government Dependency Rises As Number of Taxpayers Declines ( ** )


Government Dependency Rises As Number
of Taxpayers Declines

The leak of a video featuring former Governor Mitt Romney has sparked debate about
government dependency and the number of people in the United States
who do not pay federal income tax.

In the video, Romney refers to “47 percent” of Americans and says that they
are “dependent upon government” and “pay no income tax.” While these groups are
not necessarily one in the same, there is overlap between the two, and the
percentages on government dependency and non-tax-paying are very similar.

It is true that nearly half of all tax filers—those who are filing an income
form with the IRS—pay no federal income tax. It’s also true that millions of
Americans receive direct government support in a host of ways, including
income, food, housing, medical care, school lunches, and more.

In 2009, 47 percent of all tax filers paid no federal individual income
taxes, and in 2011 that figure was 46 percent. This raises a crucial question,
as Heritage’s Alison Fraser points out: “Should nearly 50 percent of Americans
really be exempt from funding the most basic constitutional functions of
government—along with education, food stamps, energy, welfare, foreign aid,
veterans’ benefits, housing, and so forth?”

It stands to reason that those who have skin in the game—who are helping to
pay for all of the government programs—will be more concerned about reining in
out-of-control government spending, because they see their taxes going up and
the country’s credit rating going down.

On the other hand, if you are on the receiving end of government benefits,
that is likely to color your perception of how taxpayers’ money should be
spent. According to the Heritage Foundation’s 2012 Index of Dependence on
Government, 63.7 million Americans, or about one in five, is receiving direct
government support from Social Security, welfare, or Pell Grants—and that is at
its highest level ever.

These individuals are very likely to be receiving additional benefits from
other government programs such as Medicare or Medicaid, food stamps, etc., and
the total share of Americans receiving benefits is likely to be even higher
when considering benefits available on everything from housing to school
lunches. The Wall Street Journal found that in 2011, 49 percent of Americans
lived in a household where at least one member of the family received a
government benefit.

The outlook for the future is grim: Government dependency is jumping for the
fourth year in a row, and the Index has risen more than 31 percent in that

This is bad news for three reasons. First, the economy is so weak that
people are going to the government for help. This is a stark repudiation of
President Obama’s big-spending, “spread the wealth around” approach,
because “giving everyone a shot” does not work unless the “shot”
comes at the expense of the taxpayers.

Second, the nation can’t afford to continue increasing spending on these
programs, as President Obama has proposed in each of his budgets. Federal
spending is exploding—and it is already an eye-popping reality that 70.5
percent of federal spending goes to dependency-creating programs. We are
spending more on dependency-creating programs while an ever-shrinking number of
taxpayers are paying for them.

But third, and most importantly, it’s bad for Americans. The American Dream
is about life, liberty, and the pursuit of happiness, through independence—not
dependence on government. Government dependency erodes human dignity and civil

These programs were originally designed to help those who fall on hard times
and need a safety net. Public policy should head back in that direction. The
welfare reform of 1996 helped lift recipients out of poverty and back into jobs
by requiring, among other things, that they work. President Obama has undone
that requirement. And there are dozens more anti-poverty programs that should
be revamped to help those who are able toward self-sufficiency.

At the same time, we must address the looming entitlements crisis: 78
million baby boomers are heading into retirement, and many of them will be
entirely dependent on Social Security and Medicare for their income and health
care. This dependency is a huge driver of future budget deficits.

We cannot continue on a course of unlimited government spending when fewer
and fewer taxpayers are paying for that spending. That is the financial fact.
But we also cannot sustain the American Dream on this course—and that is a fact
that is intensely personal for every American.

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