"5 percent of earned income”
-- Value of the average tax subsidy paid to the bottom 20 percent of American earners according to an Urban Institute study. These workers pay no federal income tax.
About half of American workers pay no federal income taxes, and taxpayers in the top 40 percent of earners pay an average rate of something like 11 percent.
But this election is not about either of those groups. This election is about the folks in between: those middle-income households paying less than 3 percent of their annual income to the IRS.
The standard rule is that, except for the very rich, the more money you earn, the more likely you are to vote Republican.
Of the 38 percent of voters who reported household incomes less than the national median of $50,000 in 2008 exit polls – the folks who likely do not pay federal income taxes – President Obama won 60 percent. Obama and Republican nominee John McCain tied among voters with incomes of $50,000 and above, thanks in large part to Obama’s strong performance with suburban women.
The 2004 election was more typical of voting patterns of income groups: John Kerry won 55 percent of voters with incomes less than $50,000 and George W. Bush won 56 percent of the voters with incomes of $50,000 or more.
Given Obama’s declining fortunes among-upper income voters and the Republicans settling on a nominee who scores well with suburbanites, we can expect to see voter patterns return to something closer to the 2004 voter distribution.
The central battle in this year’s fight between President Obama and Republican Mitt Romney is for the folks just above the median income bubble. If you have a household income of $60,000 and live in the suburbs of a big city in Ohio, Florida, Virginia or Wisconsin, you can expect to be getting a good deal of attention in the coming 29 weeks. You are the deciders.
These are also the folks who get to decide most elections and they also happen to be the people who are most sensitive to shifts in the economy, wages, prices and tax rates.
President Obama has been aggressively courting these voters since 2007. Consider his ongoing payroll tax holiday. For the 20 percent of taxpayers in the middle, the Urban Institute found a federal income tax rate of 2.8 percent but a federal payroll tax rate – the money taken from your paycheck to support Social Security and Medicare – of 10.7 percent. While Tax Day may annoy these voters, they are losing far more of their income to entitlement taxes.
But these voters have also been hit the hardest by the increase in prices, particularly for energy, and weak income growth during the Obama era. Just as middle income families might appreciate an extra $20 a week from the Obama payroll tax holiday, they are also paying an average of $42.84 more for a tank of regular unleaded than they were on the day Obama took office.
Add together slow wage growth, employment insecurity and a shrinking disposable income, and these voters are unlikely to have felt much benefit from what is the weakest economic recovery in modern American history.
And though their federal income tax rate is low compared to the 40 percent above them, these 20 percent in the middle care very much about how their tax dollars are spent. That $60,000-a-year family outside of Columbus, Orlando, Richmond or Milwaukee may care more about what happens to their $1,680 in federal income taxes than the members of a $250,000-a-year family who fork over $40,750.
Those who can least afford the cost are most likely to be concerned about how the money is spent.
The FOX News poll last week found two revealing points on this subject. Fifty-three percent of registered voters said their tax dollars are being spent less carefully than they were five years ago, up from 49 percent before Tax Day last year, and 54 percent said their tax rates were too high.
The president’s preferred Tax Day message to these voters in the key $50,000 to $60,000 income range is that the very rich, like Romney only pay an effective tax rate of about five time higher than those just above the median. The president wants to set the minimum rate for those high-end earners at about ten times that of the median bracket.
Romney’s preferred message on Tax Day is that government is squandering the money those middle-income voters pay in taxes – that the $1,680 these families can ill-afford to pay is being flushed away on commemorative GSA coins, Solyndra subsidies and luxury vacations for the first family.
This is why Romney rails constantly on deficit spending under Obama and what he says is the un-affordability of the president’s 2010 health law. Romney and the Republicans are playing to a long-standing suspicion among middle-class voters that the government does too little with too much.
The Day in Quotes
“Well, start packing.”
-- Presumptive Republican presidential nominee Mitt Romney when asked by ABC’s Diane Sawyer what message he had for President Obama.
“I think we paid a terrible price for health care. I would not have pushed it as hard. As a matter of fact, after Scott Brown won, I suggested going back. I would have started with financial reform but certainly not health care.”
-- Rep. Barney Frank, D-Mass., talking to National Journal about urging President to reconsider his 2010 health law in the face of broad public opposition.
“After being made aware of the existence of the investigation, I mentioned it to [Deputy White House Counsel Kimberly Harris] who I worked with on a regular basis.”
-- Testimony from General Services Administration Chief of Staff Michael Robertson telling House Oversight Committee Chairman Darrell Issa, R-Calif., that he had informed the White House nearly one year ago about concerns surrounding a lavish party for agency employees at a Las Vegas resort.
“For the President of the United States to look the American people in the eye and say, 'Well, we got a pay freeze in place,' when you're getting bonuses and going on trips is totally unacceptable.”
-- Rep. Jason Chaffetz, R-Utah, at a House hearing on waste and abuse at the General Services Administration.
“[There are] alternatives here that I can look at, that might possibly be able to save funds and, at the same time, be able to fulfill my responsibilities not only to my job but to my family.”
-- Defense Secretary Leon Panetta defending to reporters the cost to taxpayers – estimated by the Associated Press at $860,000 – of nearly weekly trips between Washington and his home in California on executive aircraft.
"The fact terrorists were able to enter Kabul and other provinces was an intelligence failure for us and especially for NATO.”
-- Statement from the office of Afghan President Hamid Karzai assigning blame for a deadly 18-hour surge of the nation’s capital.
"I do question, a little bit, the priority of doing this right now."
-- Virginia Democratic Senate candidate Tim Kaine, formerly the commonwealth’s governor and the chairman of the Democratic National Committee, on President Obama’s push for a Senate vote on his proposed millionaires tax. The comments, which the Wall Street Journal reports were made to a Charlottesville radio station, came ahead of the defeat of the measure in a mostly party-line vote on Monday.
“This law shouldn't be in place for any election. Yes, real acts of voter fraud should never be tolerated. But Scott Walker's voter ID bill is a voter disenfranchisement plan that has no place in an open and free democracy.”
-- Milwaukee Mayor Tom Barrett, the leading Democrat in the race to oppose Wisconsin Gov. Scott Walker in a June recall election, applauding that state’s Supreme Court for leaving in place a lower court decision blocking a new state law requiring voters to show identification.
“I haven't had a chance yet to talk to Governor Romney, but we'll be talking to [him and former House Speaker Newt Gingrich] and we’re going to go out and do what we believe is in the best interest of our country.”
-- Former Pennsylvania Sen. Rick Santorum on a conference call with supporters explaining that he was not ready to make an endorsement in the presidential race. Pennsylvania’s primary will be held next week.
-- Reported cost of a White House proposal to increase “federal supervision of oil markets.” The Associated Press says President Obama will call on Congress today to authorize the new spending to battle “market manipulation” in oil and gasoline sales.
“Let's at least give them pricing flexibility so [the U.S. Postal Service] can act like a business.”
-- Union negotiator and former Obama car czar Ron Bloom in a proposal on behalf of the nearly 300,000 members of the National Association of Letter Carriers calling on Congress to remove limits postage rate increases.
-- The amount, according to the Washington Post, of the additional payment sought by a Cartagena, Colombia prostitute from a Secret Service agent the morning after their liaison that led to the confrontation that led to the exposure of other agents and military personnel patronizing the city’s legal prostitutes.
And Now, A Word From Charles
“The [Democratic] base is loyal and cynical. It will not attack its own president in the run-up to an election no matter what. It stands on principle only if the Republicans are in office.”
-- Charles Krauthammer on “Special Report with Bret Baier” discussing the political effects of the deteriorating state of the U.S. war effort in Afghanistan.
Chris Stirewalt is digital politics editor for Fox News, and his POWER PLAY column appears Monday-Friday on FoxNews.com.
Chris Stirewalt joined Fox News Channel (FNC) in July of 2010 and serves as digital politics editor based in Washington, D.C. Additionally, he serves as the host of "Power Play" on FoxNews.com and makes daily appearances on the network including "America Live with Megyn Kelly," "Special Report with Bret Baier," and "Fox News Sunday with Chris Wallace." Most recently, Stirewalt provided expert political analysis during the 2012 presidential election.