Collection time for Romney's great tax gaffe

Mitt Romney's latest blunder on US taxpayer demographics is as likely to offend Republicans as Democrats, and has many commentators calling the end of his presidential campaign.

Republican presidential nominee Mitt Romney’s campaign might never recover from last night’s events.

The Bain Capital legend is struggling to explain to American voters why he thinks almost half of them are self-pitying "victims” who need to harden-up and take care of themselves.

Footage has emerged showing Romney saying just that as he spoke candidly to a group of wealthy campaign donors at a fundraiser hosted by private equity tycoon Marc Leder on May 17.

The candidate was unaware he was being recorded.

US politics buffs might remember that then presidential candidate Barack Obama went through something similar in 2008.

Obama was pretty much forgiven for his suggestion, also to fundraisers, that Americans from small towns "cling to guns or religion” when in doubt.

But as Slate columnist Willam Saletan points out, that recording shows Obama displayed much more humility than Romney in his private address.

More importantly, Obama’s unsuspecting broadcast was revealed more than six months before the election, when voters weren’t listening. Romney’s isn’t much more than six weeks away from polling day and voters are all ears.

This correspondent highly recommends you look at the full footage on Mother Jones, the publisher that broke the story, but here’s the crucial part:

"There are 47 per cent of the people who will vote for the president no matter what. All right, there are 47 per cent who are with him, who are dependent upon government, who believe that they are victims, who believe the 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. That that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what…These are people who pay no income tax.”

Romney went on to say: "[My] job is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives.”

After the footage hit the cable news channels, Romney went before a hastily organised press conference to say the comments were "not elegantly stated,” but that his desire to see more Americans working should override a poor choice of words.

It’s been largely lost on the US media that Romney was trying to raise money from his wealthy audience, so appealing to some of their presumed prejudices is to some extent called for.

But even then the display was unnecessary; certainly not the words of a statesman. It’s hard to conclude this is anything but a disaster for chances come November 6.

Indeed, the fact that Romney appears more relaxed speaking to a private group of wealth donors than a crowd of Republican mums and dads will help the Democrats reinforce the perception that he’s out of touch with the electorate.

Tellingly, the White House is taking a soft approach on the revelations, knowing that the story needs no further comment, particularly when Obama is riding a wave of positive coverage on the back of Michael Lewis' piece in the latest Vanity Fair (which makes for fantastic reading).

Mother Jones also released footage of Romney at the same event effectively rubbishing a two-state solution between Israel and Palestine just days after botching an attack on Obama for the US government’s handling of the unrest in the Middle East.

Worse still, Mother Jones says there’s more footage to come, ensuring that Romney will find it hard to get on the front foot over the next two weeks before the presidential debates begin – and the former Massachusetts governor has never been a terrific debater.

The ‘47 per cent’ stat is hardly new; conservatives in particular use it frequently throughout US media. But Romney’s portrayal of the people behind the data and their political allegiance is misleading.

Firstly, it’s the 47 per cent of "tax units” which don’t incur federal income tax that Romney is referring to. This definition includes married couples filing joint tax statements and households with children.

Research from the non-partisan Tax Policy Centre, a joint venture of the Urban Institute and the Brookings Institute, investigates why it is that 38 million households don’t pay federal income tax.

Their report, released in July 2011, identifies eight categories/reasons that these households escape paying federal income tax, but elderly tax benefits and credits for children and poor people account for the bulk of it – 74.4 per cent in fact.

These groups make up three-quarters of the "47 per cent” that Romney is referring to – although the TPC claims it’s actually 46 per cent.

But as the footage explodes across US media, two conclusions are being drawn.

The vast majority of journalists and commentators claim that this news effectively ends Romney’s campaign, or at least makes a victory highly unlikely.

There is a small minority of mostly conservative supporters who point out most people won’t be personally offended because few of us ever think of ourselves as freeloaders. Even if they do take offence, the argument goes, Romney’s offended the very people that don’t vote for him. Ergo, it’s not that big a deal.

A quick glance at the demographics of the last election raises serious questions for the cynics.

Firstly, the majority of people over 65, the group that chiefly benefits from income tax concessions, voted for Republican candidate John McCain in 2008, not Obama.

While it’s true that Americans with lower incomes favoured the Democrats four years ago, people with incomes below $50,000 only make up a third of the electorate – and even then, a third of them voted Republican.

Are we meant to believe that it’s really only old and poor Americans who are independent enough to decline tax benefits that vote conservative?

Granted, Romney’s claim could prove somewhat accurate if lower-income tax beneficiaries were a mobilised group with high participation rates – only about 50 per cent of voting-age people cast a ballot in the US. But research consistently shows the America’s poor are the most disenfranchised voter group.

In reality, Romney wasn’t speaking to political scientists but campaign donors. Rich ones.

Perhaps the most damaging element of the footage is it undermines the claim from Republicans that the Democrats have been waging class warfare against the successful. It will appear to the electorate that Romney is perfectly capable of returning fire in a terribly nasty way.

Alexander Liddington-Cox is Business Spectator's North America correspondent.