Facing mounting pressure from his rivals, Republican presidential candidate Mitt Romney released his 2010 tax return and a 2011 estimated tax bill. There were no big surprises, it was pretty much exactly what he said it would be.
His earnings for 2010 almost $22 million, his tax bill was about $3 million. That amounts to a rate of 13.9%. In 2011 he has estimated his earnings at almost $21 million and his tax bill at $3.2 million, a 15.4% rate of taxation.
Romney, in earning his income from investments, has paid a far lower tax rate than any of his GOP presidential rivals because they had the majority of their incomes taxed as ordinary income. Any outrage over the amount of taxes he pays needs to be tempered by the reminder that almost all of his income came from investment interest and dividends. This is important to note because, as I stated in an earlier article on PolicyMic, they are taxed differently than ordinary income. He met his tax obligation.
The main argument for taxing dividends at a lower rate is that it encourages investment, which usually leads to economic growth. Any calls to rethink the capital gains tax are a bad idea. Higher rates will cause a decline in investment capital and resulting decline in economic activity. In a time of recession we need to cut taxes to encourage spending, not raise them. Taxes are a dead weight loss, they take away spending power.
There were a few interesting bits of information included in his taxes. His net worth is estimated between $190-250 million, something his competitors may try to use against him; though that would be ill-advised. He also made $7 million in charitable donations in the past two years, including $4.1 million to a Mormon church. That $7 million represents over 16% of his income, an extraordinary rate of donation for anyone of any income level.
According to Politico, he also donated $100,000 to the George W Bush Presidential Library and $75,000 to the Center for Study of Pediatric Multiple Sclerosis in Boston. In addition “they paid a household employee at least $21,000 and claimed a work opportunity job credit deduction.”
Yes, Romney is very rich. Yes, he pays a lower rate of taxes than the majority of the people in this country. He should not have to pay more simply because is wealthy enough to let his money work for him instead of working himself. Why is it that this country is sold on the idea of the American dream and then those who achieve it are demonized for their excessive wealth?
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