Do You Pay More Taxes Than Mitt Romney Does?
By Mona Gable on July 31, 2012
BlogHer Original Post
The year before I’d had to scrape together an extra $1,200 for the IRS because an editor hadn’t sent me a W-9 for a story I’d written, and I’d forgotten about it. It’s not that I didn’t want to pay, although it did bug me considering how small my check was. In our house $1,200 is a lot of money. But it also made me angry because of the people who don’t pay their fair share because of tax havens in the Cayman Islands, blind trusts, and other legal shenanigans.
Like Mitt Romney. As Vanity Fair reported:
“Romney’s personal tax rate is a particular point of interest. In 2010 and 2011, Mitt and Ann paid $6.2 million in federal tax on $42.5 million in income, for an average rate of just shy of 15 percent, substantially less than what most middle-income Americans pay. Romney manages this low rate because he takes his payments form Bain Capital as investment income, which is taxed at a maximum of 15 percent, instead of the 35 prcent he would pay on ordinary income (emphasis his).
Back at the dinner party, I asked Dick very sweetly, “What’s your federal tax rate? I bet it’s not as high as mine.”
He scoffed and said--I am not kidding--15 percent. What is it with 15 percent and rich people? I want to know. Is it some morally acceptable threshold, as in 20 percent is too much, but we can live with 15?
So I told Dick that my husband and I had paid 35 percent the previous year, and told him our income. "That couldn’t possibly be right!" he said dismissively. I had to be wrong. At which point we got into a discussion about taxes, with me calmly rebutting his points with facts, and Dick getting increasingly irate that I was winning the debate. (This is where the Stanford Business School mantra came in.) Was it really fair that someone in my income bracket was paying more taxes than a millionaire? I asked.
By now the rest of the dinner guests were fascinated, and most of them were siding with me, including Dick’s wife, an anesthesiologist. “Don’t pay any attention to him. He’s a bully,” she said. The man sitting next to me patted my thigh and whispered something about Dick’s “anger problem” and “arrogance.” My brother, as usual, was enjoying the fireworks.
When the evening was over I thanked my hosts and said I hoped I hadn’t ruined their dinner party. No! I hadn’t at all. They loved seeing Dick get his comeuppance. As I was leaving George handed me his business card and offered me a job. I guess he felt sorry for me. Which only goes to show you how weird Republicans are.
But the whole incident just confirmed for me how unfair our tax system is. And how thoroughly the system is rigged in favor of the rich. This is why I find Romney’s refusal to release his tax returns so outrageous. What is he trying to hide?
Here’s a clue from the New York Times:
The most serious risk outsiders have imagined is that some recent return, especially 2009’s, showed no tax liability, even though a campaign spokeswoman, Andrea Saul, insisted Romney had never paid zero income taxes. But paying “next to nothing,” resulting from capital losses and various legal deductions, normal and creative, is distinctly possible.
Lest you think I’m picking on Mitt, the Washington Post
extremely illuminating chart comparing Romney’s tax returns—the two, anyway, that we’ve seen--with those of five recent presidents. Guess who paid the least?
The results speak to why Romney wants to talk as little as possible about his tax returns (and, more broadly, his wealth) while President Obama’s campaign wants to bring it up as much as possible.
Romney’s earnings are by far the highest and his tax rate is the lowest of any of the individuals measured in the chart. As Sunlight’s Lee Drutman writes: “The reason is pretty straightforward. Romney’s income primarily comes from investments, and the resulting capital gains are taxed at a rate of 15 percent.”
Which reminds me. I need to go talk to my accountant about setting up some tax havens in Bermuda.
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