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.