Mitt Romney's Effective Tax Rate: 15%

[magickyleo101]

From the NYT:

FLORENCE, S.C. — Under new pressure to release his tax returns, Mitt Romney on Tuesday acknowledged that he pays an effective tax rate of about 15 percent because so much of his fortune comes from past investments.

“It’s probably closer to the 15 percent rate than anything,” Mr. Romney said. “Because my last 10 years, I’ve — my income comes overwhelmingly from investments made in the past, rather than ordinary income, or rather than earned annual income.”

***

The vast majority of the income Mr. Romney reported over 12 months in 2010 and ‘11 was dividends from investments, capital gains on mutual funds and his post-retirement share of profits and investment returns from Bain Capital, the firm he once led. And Mr. Romney also noted that he made hundreds of thousands of dollars from speaking engagements.

Financial disclosure forms that candidates are required to file annually shows that Mr. Romney earned $374,327.62 in speakers’ fees from February of 2010 to February of 2011, at an average of $41,592 per speech. President Obama paid an effective federal tax rate of just over 26 percent on his 2010 returns, the most recent available.

I think this basically illustrates the point Warren Buffet made over the summer about the fairly significant imbalance in the federal taxing system. I don't begrudge Mitt Romney his money, and I'm sure he's worked hard for it, but there's not really a terribly compelling reason that he should pay a far lower percent of his income as taxes than a middle class individual who earns a salary.

I also think the issue creates a fairly compelling political contrast between Romeny and Obama, since although both are fairly wealthy individuals, Obama pays a tax rate that looks far closer to the tax rate that most middle class voters pay. Romney already has a hard time identifying with the average American - I doubt it helps in that direction that he pays half of their tax rate.

EDIT: Here's a link to a website that allows you to determine how much less you would pay in taxes if you paid Mitt Romney's tax rate.

Thoughts?

[Kanaric]

The thing here is that regardless if we have Romney you have to trust he's not lying which is impossible for anything he says. He is a red democrat. He will compromise with them like Obama does with republicans leading to status quo on all issues.

[s.rwitt]

but there's not really a terribly compelling reason that he should pay a far lower percent of his income as taxes than a middle class individual who earns a salary.

If the fifty percent of American workers not paying any tax pitched in at least something I'm sure there'd be no problem bringing the middle class individiual's taxes down.

[Vanoi]

If the fifty percent of American workers not paying any tax pitched in at least something I'm sure there'd be no problem bringing the middle class individiual's taxes down.

They can't. They don't make enough money.

[Phier]

If the fifty percent of American workers not paying any tax pitched in at least something I'm sure there'd be no problem bringing the middle class individiual's taxes down.

Ding ding ding.

I'm going to guess my effective rate was less than that until this year. S corp with business depreciation.

[MathiasOfAthens]

Ding ding ding.

I'm going to guess my effective rate was less than that until this year. S corp with business depreciation.

You missed the post above yours because you were too happy to post how much you agree with SRwitt. Point is most Americans dont earn enough. Service sector jobs or at least most of them dont pay over min wage and with this recession its really hard to get a 14dollar/hr job at Costco.

[Phier]

You missed the post above yours because you were too happy to post how much you agree with SRwitt. Point is most Americans dont earn enough. Service sector jobs or at least most of them dont pay over min wage and with this recession its really hard to get a 14dollar/hr job at Costco.

Yes, they do. The line you draw for this is simply arbitrary and has been creeping up over the years for political, not economic reasons.

[Matthias]

Romney pays only 15% for his taxes!? Freaking hilarious.

What's even better is the conservatives scrambling and using logical fallacies. None of them are even addressing the subject.

Their first crutch? Deflect from the issue by attacking the poor. Sure, Romney pays less as a percentage than people in the middle class even though he makes many, many times more than they do. But let's concentrate on the 50% of Americans that don't pay federal income taxes. You know, the poor and the elderly primarily. Yeah, that's the ticket.

I mean, let's not address the actual issue. The issue is that we have a progressive tax system, but not really, where the middle class pays a higher percentage than even the super wealthy.

Their next logical fallacy is to say that this is just fine, since the wealthy pay most of our taxes. Well, no duh, they own most of the wealth. This one is always a funny one.

It's like they want everyone to contribute to federal income taxes, but don't see that by promoting policies that create giant wealth inequalities, that's not going to happen. Can't have your cake and eat it too.

I love the smell of hypocrisy and conservative sweat in the morning.

Vote for me, Mitt, I have 250 million dollars and pay less as a percentage than you middle income sucker....er, great Americans! And I want to make sure that not only that continues, but widen the wealth gap even more with my policies.

[MathiasOfAthens]

See the other problem here that is the root of this is that a "teachers salary" should not be low. They should be paid what people expect to get from having a degree and the fact that they subsidize peoples lives prevents this.

Teachers Subsidize peoples lives? What`do you mean?

This is all 100% the employers not the government that should be responsible for these things. I should be paying for someones healthcare by buying a companies product sales tax aside.

There could be a system that allowed employees of any company to contribute how much they wanted to a unemployment system so if they lost their job they could survive off the "welfare" until they got a job again... but your need some sort of statewide or federal involvement to plan this system and get every company involved... right? A lot of Republicans would be simply against govt involvement despite the fact that this is nothing more than a govt insurance program. Insurance.

When my dad was my age most companies had benefits. That is how it should be. If you don't work you should not get anything if you have a job you should get less so you will want to improve yourself. Still everyone who worked should get something better than what they get now.

Anyway what the hell do you mean job workers should continue to work like because their job is ? Are you referring to garbage workers or min wage service sector jobs? Someone has to do both of those.

But to the point Costco can afford to pay new employees 14 dollars an hour. Well over the 9 dollars an hour Wal Mart pays to new workers. Well over the 8-9 dollars an hour most companies pay. Why cant these other companies that often do better than Costco in sales cant increase the amount they pay to people?

Yes, they do. The line you draw for this is simply arbitrary and has been creeping up over the years for political, not economic reasons.

I said service sector jobs dont pay over min wage. I know I was wrong with that. Most service sector jobs start off employees around 1 or 2 dollars over min wage. Most movie theaters begin employees at or around min wage... You have the opportunity to rise but wages dont come for at least 6 months to a year and they come in small amounts. Thats why I mentioned Costco. Not only do employees begin with a high wage but they rise faster compared to Wal-mart.

[bushbush]

If the fifty percent of American workers not paying any tax pitched in at least something I'm sure there'd be no problem bringing the middle class individiual's taxes down.

50% of American workers don't pay any tax? are you sure? Not even wage tax, sale tax, SS tax etc?

[alhoon]

If the fifty percent of American workers not paying any tax pitched in at least something I'm sure there'd be no problem bringing the middle class individiual's taxes down.

Federal income tax, not "not any tax". There are other taxes... that I would like to know about.

[Aetius]

Yeah that is capital gains tax, which is lower than income tax. Although before people get angry about that, I have invested before and the thing is with investing you can also lose money so if the capital gains tax were as high as income tax that would make investing look a lot less desirable.

As for Romney, he is a slick liar who will do anything to get ahead and is laughing at the American people all the way to the bank and presidency (which he will never get).

[bushbush]

Yeah that is capital gains tax, which is lower than income tax. Although before people get angry about that, I have invested before and the thing is with investing you can also lose money so if the capital gains tax were as high as income tax that would make investing look a lot less desirable.
.

you can deduct your capital losses. Also, you are only taxed when you realize your gains (i.e. sell your stocks into cash).

As for Romney, he is a slick liar who will do anything to get ahead and is laughing at the American people all the way to the bank and presidency (which he will never get).

Well he has a good accountant and executive compensation lawyer. His people help him structure his income in a way that maximizes tax savings. For example, he took in a lot of money through stock options, not salary. He is not going to pay taxes on stock options as long as he doesn't sell them (and he only pays taxes if the value is more than the fair market value at the time he got the stocks).

[s.rwitt]

They can't. They don't make enough money.

If that were the case we'd have a %50 poverty rate.

[Vanoi]

If that were the case we'd have a %50 poverty rate.

No, they really just don't make enough money due to wealth and income inequality in the US. When the top 10% of the population owns about 80% of the financial wealth in the US, that only leaves 20% for the 90% that is left. How do you expect them to pay taxes with that kind of wealth inequality?

[MathiasOfAthens]

If that were the case we'd have a %50 poverty rate.

Our poverty rate is 15.2% I believe which is about 46 million Americans. A lot.

Now someone who is incredibly smart somehow determined your living in poverty with only an annual income of 10,000 for a family of 1. Thats honestly laughable because its plainly tough to survive with 20,000 much less 10,000 a year.

http://en.wikipedia.org/wiki/Poverty...and_guidelines

Seriously? 8 People can survive on an income of 37k? Perhaps survive sure... but honestly live? Say you want to bus the 6 kids around or 7 if its one parent?

[s.rwitt]

Income tax. I meant to specify that.

[Kanaric]

I still don't believe that. Seems absurd

[bushbush]

I still don't believe that. Seems absurd

It is true. That's because there are many forms of deductions and tax credits available for low income individuals. At the end, they get more money back from the government than they send in through paycheck deductions throughout the year. However, they still have to pay other forms of taxes other than income tax.

[s.rwitt]

No, they really just don't make enough money due to wealth and inceom inequality in the US. When the top 10% of the population owns about 80% of the financial wealth in the US, that only leaves 20% for the 90% that is left. How do you expect them to pay taxes with that kind of wealth inequality?

Perhaps they could use the 21,000 to 48,000 dollars they make every year.