2012 Elections / National / Politics

Romney’s taxes: 13.9%

Republican candidate Willard “Mitt” Romney released his tax returns late last night. He wasn’t kidding when he said “returns” plural: in addition to his personal 2010 returns, Romney released those of three trusts and a charitable foundation, plus an estimate of his 2011 return. The trusts are all grantor trusts, and the income from those are reflected on his personal returns.

I don’t put much stock in the 2011 estimated return – way too much guessing going on there.

I haven’t had time to go through them all, but what quickly jumped out at me was the 13.9% effective tax rate (total tax paid of $3,009,766 divided by total income of $21,661,344). Let’s just say that my total income was significantly less than the total tax paid :) and my effective rate was higher than that – and that doesn’t include my contributions to Social Security and Medicare. That’s what happens when the source of income is from qualified dividends and capital gains, which receive a preferential rate over ordinary income, like wages and interest.

In last night’s debate, Romney questioned Newt Gingrich on his 0% rate for capital gains, which would virtually wipe out Ronmey’s tax liability. Gingrich says yes, he wants that rate for those people because they are the “job creators.” Looking at Romney’s tax return I see only one job created: they have a household employee that was paid a total of $20,603. Um, that isn’t much job creation to justify a zero tax rate, now is it?

I’ll look at the returns a little closer when I have more time. And as of this writing, none of the stories written about the returns are worthy of linking to since they all just repeat the same topline information.

 

 

 

19 thoughts on “Romney’s taxes: 13.9%

  1. While the tax rate is low, it could be offset by Romney’s charitable giving:

    http://nation.foxnews.com/mitt-romney/2012/01/24/whos-greedy-obama-gave-1-charity-romney-gave-15

    Personally, not focusing on Obama’s giving, but on Romney’s numbers for charitable giving:

    2010 – 13.73%
    2011 – 19.14% (estimated)

    Which would certainly play a huge part in his tax rate, right? Or is his effective tax rate before charitable deductions are taken into account?

  2. His total contributions in 2010 were $2,983,974 ($1,525,167 in cash, $1,458,807 in stocks to his Tyler Foundation), which represents 13.78% of his income. (I’m not buying those 2011 numbers until I see the return.) The effect on his tax rate is really insignificant in the larger picture, simply because of the nature of his income.

    Effective rate is as defined above – total tax paid divided by total income.

    Interesting note: he gave nearly $1.5 million to his private foundation – it doesn’t appear to have received any other funding during the year – and that foundation only donated $647,500 – less than half – to charities.

    If you only consider the cash contributions, he donated 7% of his income.

    • Why would you only consider the cash contributions? Donations of stock decrease one’s net worth just as much as donations of cash do.

      Also, the companies in which he owns stock also pay taxes. His portion of those taxes should also be considered.

      • As I tell my students: reading is fundamental. He gave the stocks to his own foundation, not to some outside entity. Did he lose control of the the wealth? Only on paper.

        And I’m sure you know just how much in taxes those companies paid. Or maybe they are the ones who don’t pay any taxes at all.

        • He lost considerable control. He cannot sell it and buy himself a boat or a new house, can he?

          But what is the point of it all anyway? It is not as though he has done anything illegal. It is Obama who says he does not pay his “fair share,” but who does not freely pony up what HE considers “fair.” There is a mechanism in place to do that: http://pay.gov

          I’m tired of his saying we should “ask” the rich to pay more. He, and Buffett, should just put their money where their mouths are and PAY MORE. Then ASK their rich friends to do the same. If he wants to be our leader, he should lead by example and willingly contribute to the government.

          • Would you like to pay a unknown amount bill to the IRS? Then we shouldn’t expect anyone to.

            The telling part is not that they are asking to pay their taxes, they are saying it is too low. We should ask them, and other rich people, to pay more, because they have more. How much is enough? A million? A billion? They should pay something commensurate with their wealth, the only fair and progressive taxation.

            They use services the governments supply right along with the rest of us. They get special treatment in almost every instance, because they are wealthy. This country needs to decide what is important, obscene wealth, or everything else (like health care, roads, clean water, clean air to breathe.

      • But remember, the donation of stock or property is taken at face value, not less capital gains, inequitably reducing earned income an additional 15% of the contribution that would have otherwise been taxed.

      • HIS money is tied up in those corporations. His having direct control over them is irrelevant.

        And what difference does it make if the work was done by one person or four?

        Are more jobs created by hiring domestic help directly, or by hiring a company to do the work? Should he hire laborers to build his cars for him, or should he just buy from a car company? Either way, people must be employed to do the work.

  3. > We should ask them, and other rich people, to pay more, because they have more.

    OK, so why doesn’t the President and all the other who think that just DO IT? Just ASK already.

    If the President, the House Minority Leader, and the Senate Majority Leader think their taxes are too low, they are free to pay more. Then ASK their rich friends to do the same. Lead by example. ASK already.

      • You seem to think it won’t work to just ask the rich to pay more, so why do you and other liberals, including the president, keep saying we should ask?

        • It’s hard for me to believe you think this is a serious proposal.

          The fact is, if the law were changed, some of our money woes would go away, when other people also had to pay more. (People whose names you don’t even know.)

          You should really read and think about what you are saying before you press post. This is just silly now.

          • So President Obama was NOT serious?

            What is silly is people like you and the President saying we should ASK the rich to pay more. He had the podium for the State of the Union address, he said we should ASK the rich to pay more. He said he doesn’t need the money. He had just under $5M in taxable income in 2010. Imagine his saying this: “Today, I am donating $1M — about 20% of my income — to the United States Treasury. I ask all of the rich people in this country (and in this room) to do the same. It is the right thing to do. Furthermore, I ask all those who would donate to my re-election to donate instead to the Treasury to pay down this debt and to pay for the programs we need.”

            If they actually did it, he would not have to campaign at all. Everyone would see the donations go from the paltry $3M of it’s peak to several hundred million. The media would be all over that, and Obama would win in a landslide.

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