Romney Admits His Tax Rate Is About 15 Percent, Lower Than Many Middle Class Families

[one...two...tree 2,762]

Citizens for Tax Justice a few months ago estimated that Mitt Romney, due to most of his income coming from investments, pays a tax rate of around 14 percent, a far cry from the 35 percent top income tax rate. Romney then confirmed that the bulk of his income does, indeed, come from investments (and is thus subject to the top capital gains tax rate of 15 percent), but he has refused to release his tax returns in order to reveal the definitive tax rate that he pays. However, during a press conference on the campaign trail today, Romney did give a glimpse into his finances, confirming that he pays “closer to the 15 percent rate”:

Q: What’s the effective rate you’ve been paying?

ROMNEY:

What’s the effective rate I’ve been paying? It’s probably closer to the 15 percent rate than anything

, because my last ten years, I’ve, my income comes overwhelmingly from investments made in the past, rather than ordinary income, rather than earned annual income.

As Center for American Progress Director of Fiscal Reform Seth Hanlon has explained, the latest data shows that “

many middle-class families paid much more

[in taxes] than the 17.5 percent average paid by the very rich.” When President Obama suggested the “Buffett rule,” aimed at ensuring that millionaires can’t pay lower taxes than middle class families, Romney derided it as “

class warfare

,” and “the wrong way to go.”

One of the reasons Romney is able to drive his tax rate down so low is that he is still earning money from his private equity firm, Bain Capital, that is likely subject

to a pernicious tax loophole

. This loophole lets wealthy money mangers like Romney pay the capital gains tax rate on profits they make investing

other people’s money

, turning the justification for having a lower capital gains tax rate completely on its head.

During the same press conference, Romney said that he only makes some income from speaker’s fees, “but not very much,” which is money that would be taxed at normal income tax rates. From Feb. 2010 to Feb. 2011, Romney

earned $362,000 in speaker’s fees

.

http://thinkprogress.org/economy/2012/01/17/405183/romney-admits-tax-rate-15/

[I AM NOT THAT GUY 5,715]

So, Romney is the 1%.

[dalegg 143]

As Center for American Progress Director of Fiscal Reform Seth Hanlon has explained, the latest data shows that “many middle-class families paid much more [in taxes] than the 17.5 percent average paid by the very rich.”

I'd like to see how many "many" is, and also what their incomes are.

[Obama 2012 1,714]

oh the HORROR!!!!! someone not paying more than 15% of income tax!!!!!

People like Steven just don't understand what TOO MUCH Government means.

Yeah the idiot Romney might be the "1%" but that's not his fault, it's the fault of GOVERNMENT in which people like Steven want more of!!!!!!

[I AM NOT THAT GUY 5,715]

I'd like to see how many "many" is, and also what their incomes are.

Well, there is the 48% that pay nothing, the 51% that pay something, and the 1% that Romney belongs to. I am part of the 51%, and we pay around 5% of our AGI in Federal Income Taxes.

Now if they are talking about net taxable income, that is a different story.

[lostinblue 1,989]

Zero capital gains taxes for some

On Jan. 1, 2008, the best of all possible tax rates -- zero percent -- took effect for investors in the 10 percent and 15 percent income tax brackets.

Previously these taxpayers had to pay Uncle Sam 5 percent of their long-term capital gains. Now any long-term assets they sell will be exempt from capital gains taxes.

To qualify for the zero rate, a married couple could make in 2008 no more than $65,100 in taxable income; single filers earning $32,550 or less will pay no tax on the sales of assets they've owned for more than a year.

While lower-income individuals aren't typical investors, this tax benefit could help out folks such as retirees who have little or no taxable income. And the children of older individuals could combine the annual gift exclusion ($12,000 in 2008) with this capital gains break and give appreciated long-term assets to their older parents.

15 percent tax rate for most

The zero-percent rate is just the latest in a series of investor-friendly tax changes enacted during the George W. Bush administration. Prior to his taking office, investors whose overall income put them in the top four income-tax brackets faced a long-term capital gains rate of 20 percent, while lower-income investors paid capital gains taxes of 10 percent.

Tax-law changes in May 2003, however, lowered the rates by 5 percent each, with the lower rate, as noted earlier, eventually being zeroed out in 2008.

The changes have had the most effect on investors in the higher income ranges, 25 percent to 35 percent tax brackets. These individuals now find their capital gains taxed at 15 percent. This lower rate also applies to some dividends that stocks and mutual funds pay account holders. When you hear "lower capital gains rate," it generally means this 15 percent level, because there are few investors with incomes low enough to qualify solely for the 5 percent, now zero percent, rate.

http://www.bankrate.com/brm/itax/news/taxguide/review-rates1.asp

To qualify for the zero rate, a married couple could make in 2008 no more than $65,100 in taxable income; single filers earning $32,550 or less will pay no tax on the sales of assets they've owned for more than a year

Look at all the money you will make steve when you cash in the profits on the solar stocks you own. (the zero rate)

[Bad_Daddy 2,209]

Well, there is the 48% that pay nothing, the 51% that pay something, and the 1% that Romney belongs to. I am part of the 51%, and we pay around 5% of our AGI in Federal Income Taxes.

Now if they are talking about net taxable income, that is a different story.

Thank god someone is paying taxes or how else would my unemployment be covered?

[I AM NOT THAT GUY 5,715]

Thank god someone is paying taxes or how else would my unemployment be covered?

Get back in the kitchen, and make me a sammich!

[Bad_Daddy 2,209]

Get back in the kitchen, and make me a sammich!

A USC fan/chick uses this pic as a sig on the yahoo rivals college football forums.

[Gary and Alla 3,694]

Thats shameful. We need to reduce the tax on middle class families!

Just kidding.

FAIR TAX fixes this.

Edited January 18, 2012 by Gary and Alla

[ready4ONE 5,400]

15% of 1 million may be a lot more than 15% of 50 grand, but which hurts more in terms of income given up? How would it be FAIR?

[DaveE 178]

If he paid all legally due taxes, I have no issue with it. I just checked my 2010 return and I paid 10.6%.

If there is a problem, it is with the tax code, and not with any individual.

[SMR 368]

While most middle class families have a top bracket above 15%, I would be very surprised if they are paying 15% of their gross income in taxes. As a single guy with no house making almost $70k a year, I only paid around 11% of my income in taxes. Married with a kid and making a little bit more I'm now paying only 6-7%. If I was making less and had two kids (that's average middle class), I strongly doubt I would be paying 15%.

Further, as I've brought up before (and I obviously don't know if this applies to Romney or not since he hasn't released his taxes), it's disingenuous to calculate someone's effective tax rate based on gross income when that income includes money that was deducted in certain ways, such as charitable contributions, which don't equate to income that the individual was taking home. That is, if I make a million dollars and donate $990k to charity, I'm not going to end up paying much taxes. But it's not reasonable to start complaining about my low tax rate. I didn't take that money home.

[웃 910]

Cap Gains Tax (The more you make the more you get PUNISHED!):

0 to $250,000 = 0%

$250,001 to $500,000 = 25%

$500,001 to $1,000,000 = 35%

$1,000,001 to $5,000,000 = 40%

$5,000,001 to $10,000,000 = 50%

$10,000,001 to $100,000,000 = 70%

$100,000,001 to ∞ = 90%

[dalegg 143]

While most middle class families have a top bracket above 15%, I would be very surprised if they are paying 15% of their gross income in taxes. As a single guy with no house making almost $70k a year, I only paid around 11% of my income in taxes. Married with a kid and making a little bit more I'm now paying only 6-7%. If I was making less and had two kids (that's average middle class), I strongly doubt I would be paying 15%.

Further, as I've brought up before (and I obviously don't know if this applies to Romney or not since he hasn't released his taxes), it's disingenuous to calculate someone's effective tax rate based on gross income when that income includes money that was deducted in certain ways, such as charitable contributions, which don't equate to income that the individual was taking home. That is, if I make a million dollars and donate $990k to charity, I'm not going to end up paying much taxes. But it's not reasonable to start complaining about my low tax rate. I didn't take that money home.

This is what makes that statement about Warren Buffet paying a lower tax rate than some of the people in his office kind of funny. There are no doubt some people in the middle class paying a higher tax rate than the people in the top .1%, but its not as if these people are the struggling portion. If you look at what it takes to have an effective tax rate of 20%, you have to be at very the top of upper middle class, having just about no deductions whatsoever, and probably not married. Its an interesting battle that somehow tries to pit the top 1% against the top 3%, while making the 99% think that it somehow applies to them.