What Americans know that Obama and Romney do not

Mitt Romney's off the record remarks are potentially a very serious problem for him. By dividing the country into those who pay taxes and those who don't pay taxes, the former Massachusetts governor has made both a substantive error and a political error, and one that will serve as a distraction at the very least.

The governor is wrong to say that the 47% don't pay income taxes.  Sixty-one percent of those people are paying payroll taxes at a rate of 15% or more, which is higher than the 13.5% rate that the governor himself has paid. These are people who almost certainly would like to pay income taxes.  They are typically under employed, or are earning less than a family of four needs to support itself.  They are just as hardworking and committed as people making a lot more money.  So, the governor is simply wrong.

Another 22% of people in this category are those receiving senior citizen benefits like Medicare and Medicaid, and presumably a large percentage of them have been in the work force previously.

To think that the country is divided into “Haves” and “Have-nots,” with the Have-nots being victims, is a profound misreading of America, it represents bad political thinking, and it represents the worst form of paternalism.

It will hurt Mitt Romney in the polls, as it should.

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But it would be wrong to just focus on Governor Romney, without taking look at President Obama. President Obama's class-based politics represent a similar view. He sees a world made up of rich people and working class people, with a middle class made up of the hardworking, decent and pure. Rich people are venal and arrogant, and aren't paying their fair share.

President Obama has been intellectually dishonest, seeking to divide people on the basis of income, and arguing, somehow, that we can solve our fiscal problems by just taxing the rich. It doesn't work that way, it won't work that way, and it won't achieve the desired result.

Moreover, such a class-based view of politics misses the point that most of the middle class, rather than resenting the rich, would like to be rich themselves, and aspire to achieve what rich people have achieved through their own success.

Furthermore, President Obama, while professing to want to make people pay their fair share, has been noticeably silent on the campaign trail about one of the principal breaks that the rich get, one which Governor Romney and his colleagues in private equity have taken advantage of, which is carried interest--those in private equity, without risking capital, are able to take advantage of the low capital gains rate, rather than having to pay the full federal income tax rate of 35 percent.

Put another way, the Obama campaign is, in its own way, as intellectually dishonest when  talking about taxes and wealth as Governor Romney was when he was caught on tape.The difference is that Governor Romney is more maladroit, he spoke impertinently and inappropriately, and will be held accountable for that.

It should be noted also that the vast majority of the American people reject both the Obama and Romney formulations, they believe in hope, growth, and opportunity; they believe in the American dream. They remain optimistic, according to the polls, in the face of the economic downturn. They are hoping against hope that they will have the opportunity to grow their incomes, to pay taxes, and to be part of an expanding American economy, where they don't need transfer payments, and where they don't need entitlements.

This is not a country that is divided, and it is wrong for both candidates to do so on the basis of class, or level of taxation paid.

Both candidates would do well to remember the words of Bill Clinton, who has spoken repeatedly during his presidency, and afterwards, of the need for opportunity, and responsibility, as well as the fact that we only prosper as one nation united, working for the interests of all Americans.