by Linda Beale
Romney Reveals His Tax Rate Is ‘Probably Closer to 15 Percent
Source for this article: Emily Friedman, Romney Reveals His Tax Rate Is ‘Probably Closer to 15 Percent'”, ABC News, Jan. 17, 2012.
At a press conference following the GOP debate last night, GOP presumed favored candidate Mitt Romney acknowledged for the first time that his effective tax rate is around 15%. That’s a lot lower rate than middle class taxpayers typically pay.
Romney isn’t releasing his full return–at least not yet. He says maybe he’ll release just the 2011 return in April. But not any back returns. (That’d tell us more about his gains at Bain Capital than he probably wants us to know.)
What are his sources of income? Romney acknowledges that during the last 10 years, his income comes “overwhelmingly” from some investments made in the past. Other sources include a “little bit” from his book and “not very much” from speaker fees. (“Not very much” is obviously a relative term. Romney’s financial disclosure report released in August indicated that he was paid more than $370,000 in speaker fees for that filing period. That’s considerably more than any middle class taxpayer makes—but doesn’t amount to “very much” for Romney, who is worth somewhere around $250 million or so.)
So for 10 years, Romney admits, he hasn’t labored much, but has nonetheless made considerable investment income that gets preferentially taxed. That of course is a core problem with the preferential rate for capital income–it merely makes the festering wound of hugely unequal distribution of income (and wealth) worse. The preferential rate is, essentially, a tax policy favoring redistribution upwards. The rich get to pay a lower tax rate on their income than their secretaries, and their income is especially protected by other policies as well (like the weakening of unions from Reagan on, privatization of public activities from Reagan on, lax enforcement of anti-trust rules, lax enforcement of banking regulations, etc.).
At least Romney recognizes that the rich don’t need (and the economy wouldn’t benefit from) even more favorable tax breaks for rich people’s favored kind of income. He noted that “the speaker’s plan to eliminate the capital gains tax for high income individuals–capital gains, interest and dividdnds–would not only be a very expensive provision in terms of having to fill an even larger budget hold but that would provide for people of very high income a possibility of no tax at all. … I just don’t think that’s the right course.” (But he does want to lower corporate tax rates, which–under the theory that corporate taxes are borne by corporate owners–would be just another form of preferential taxation for rich people who own most of the corporate stock.)