Friday, the Romney campaign released Mitt Romney’s 2011 tax returns revealing the presidential candidate paid an effective rate of 14.1%. That’s due to the fact that most of his income was realized through capital gains, which are taxed at a different rate than ordinary income. That effective rate places him and other millionaires in a lower tax bracket than poor and middle-class Americans. Three fourths of the top one percent’s earnings is through capital gains, taxed at a maximum rate of 15%.
Stephanie Cutter, deputy campaign manager for Barack Obama, said in a statement Romney’s 2011 tax return confirms “people like Mitt Romney pay a lower tax rate than many middle class families because of a set of complex loopholes and tax shelters only available to those at the top.”
Contrary to Romney’s assertion on ABC’s “Good Morning America”, the middle-class doesn’t earn $200,000 to $250,000 per household. Median income stands at about $50,000 per household according to Sentier Research and the U.S. Census Bureau. The poverty level for a two-person household in 2012 is $15,130 according to U.S. Health and Human Services.
Paul Krugman, Nobel prize-winning economist and columnist for the New York Times, wrote in January that “such low taxes on the very rich are indefensible.” Contrary to tea party dogma, he also stated that “the economic record certainly doesn’t support the notion that superlow taxes on the superrich are the key to prosperity.”
The White House has been promoting the institution of the “Buffett Rule”, named after billionaire investor Warren Buffett. Buffett himself asserted in 2011 that he believed the wealthy should not pay a lower effective rate than less affluent Americans. If enacted, the rule would result in $36.7 billion per year in additional tax revenue, according to a January 2012 analysis by the Tax Foundation.
See Romney’s full 2011 tax return here.