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Mitt Romney has been, and continues to be, the candidate to beat for the Republican nomination. He has come under fire from every other nomination contender, as well as from the Obama campaign on the left. He is criticized for being “out of touch” with the middle class, as well as for shutting down companies and eliminating jobs under Bain Capital, the private equity firm which he used to run.
His fortune, which is somewhere between 190 million and 250 million, makes him one of the wealthiest men to run for office in recent times. He has described the amount that he made from speaking engagements as “Not very much.” This amount is revealed to be $374,327, an amount that, well into the six figures, is far higher than the income of the average American.
Criticized by opponents for not releasing his tax forms, Romney is beginning to succumb, admitting to paying somewhere near 15% in his taxes. This percentage means that most of Romney’s income is from investments, as opposed to from ordinary income, which is taxable by up to 35%.
This makes him one of the 200,000 millionaires who pay less in taxes than the average person who makes over 100,000 dollars a year. According to the Christian Science Monitor, if some of his Republican opponents had their way, Mr. Romney would be paying even less in taxes.
Coincidentally, Mitt Romney opposes the Buffett Rule, also known as the Millionaire’s Tax, which would increase the minimum tax rate paid by millionaires, ensuring that they pay at least the same percentage that middle class income families do. According to the New York Times, any time he is asked about taxes being raised on the wealthy, Romney deflects the question, insisting that the size of our government must be shrunk.
The bigger issue may be that the IRS values investments more than it does ordinary income. Regardless, the current tax rates make it so that those who make many times over the average income, such as Mr. Romney, have to pay a much lower percentage in taxes than a middle class family.
Furthermore, Mr. Romney negotiated a retirement deal with Bain Capital that provides him with a substantial share every year. This will be even more income that will not fall under ordinary income, and so therefore only 15% percent will be subject to taxation. As a candidate, Romney has advocated policies that would continue to benefit people like him whose income comes mainly from investments.
Mr. Romney will perhaps be continued to be seen as out of touch, and these recent revelations will doubtlessly be unhelpful to his candidacy.
Image Courtesy of http://www.flickr.com/photos/wacphiladelphia/