January 24th, 2012
10:46 AM ET

Romney tax release lights up debate on wealth inequality

Republican presidential candidate Mitt Romney made $42.7 million over the past two years and paid $6.2 million in taxes, newly released documents show.

Romney and his wife, Ann, filed a joint 1040 reporting $21.7 million in 2010 income and $3 million in federal taxes. They also said their 2011 income was $21 million and tax bill was $3.2 million. Over the two years, Romney's effective tax rate – the percentage of his income that he owed in federal income taxes - was just under 14%.

Nevertheless, and contrary to popular perception, Romney's effective federal income tax rate is still above that of many Americans – 80% of whom have an effective rate below 15%. That tax rate is higher when other federal taxes - such as the payroll tax - are included.

And there's nothing that gets people revved up like peering into someone else's taxes to learn more about their wealth, especially when they're running for office. So you know that people were abuzz this morning trying to dissect it all, that is, if they could wrap their heads around it.

It appears Romney and his campaign knew that too, and expected the onslaught. If you did a search on Twitter for "Romney Taxes" "Romney Tax Returns" or "Romney" you saw an interesting promoted tweet, meaning someone paid for that tweet to show up at the top of the heap.

And judging by the tweet, Romney's camp must have thought, if people are going to be searching around, we ought to offer a message.

For the most part, the conversation online seemed more focused on what Romney's overall taxes show about America, rather than the candidate himself.

Rick Newman, the chief business correspondent for US News & World Report, tweeted a statistic that seemed to characterize what others were thinking.

A majority of the comments we saw online showed that many folks, while they may have been a bit revolted by the mass amount of money Romney makes, found that more of the problem was our tax code or a major gap divide between the wealthy and middle class.

Others bemoaned the general fact that Romney didn't have to pay more, considering what they pay, even if it is all part of the current rules.

But others thought that there wasn't any massive damage done by Romney releasing his tax returns, because they showed he also gave money to those who needed it, and simply followed our current rules.

Some joked the release was well-timed because it came when people were paying more attention to Oscar nominations.

But for others, there was also a continuing sentiment of wondering why we get all excited about these tax releases anyway.

For some, knowing where the politics and money collide along the campaign trail was the more important monetary detail they'd prefer to learn.

What do you think? Does it still matter that we see candidate tax returns? And if so, what is your reaction to Romney's release. Let us know in the comments below.

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Filed under: Economy • Mitt Romney • Politics • Twitter
soundoff (733 Responses)
  1. Hypocrisy Hunter

    Duane, what on earth makes you an expert on what "the poor" do and don't appreciate? Are you a mind reader? Do you think all poor people think alike? Do you think all left-handed people think alike? Makes just as little sense as your post.

    January 24, 2012 at 2:19 pm | Report abuse | Reply
  2. Sarah

    I like that Mitt gave 17% to charity. Newt only gave 3%. And Newt hasn't even paid his taxes yet, he "underfunded" them and now has to pay even more. He's in debt to the government, I don't think he should be off the hook until the bill is stamped "PAID!"

    January 24, 2012 at 2:20 pm | Report abuse | Reply
    • HOWARD

      Romney EARNED this money, pursuing opportunities available to ALL Americans. The taxes he paid will be used to buy food stamps for thousands of Americans who are dependent on obama's socialist policies ... and will also help pay for Obama's salary.

      January 24, 2012 at 2:40 pm | Report abuse |
    • bobcat

      the whole world is socialist just like our founders deal with it.

      January 24, 2012 at 2:48 pm | Report abuse |
    • DoNotWorry

      Romney no more EARNED that money than the man in the moon. How many law school graduates immediately become CEOs of a start up company? Takes a lot of money and contacts to get that type of spot, something like Chelsea Clinton being on the Board of Directors of several companies. So his initial opportunities (including education without debt) were purchased by daddy. From there, he overloaded companies with debt and destroyed them, to pull millions while leaving the stockholders, employees, and creditors in the hole. This may be legal, but it is not moral. There are a lot of immoral laws supporting immoral business practices, paid for by immoral corporate execs. I never have thought Romney broke the law, I believe the laws are designed in his favor. Newtie? Yep, now there is a law breaker, never mind the laws are already in his favor.

      January 24, 2012 at 2:49 pm | Report abuse |
  3. edka

    A low Capital gain tax motivates investors. These real estate investments generate large transactions which result in huge tax dollars. Plus these investments help to turn our real estate around. Our country needs more investors and less parasites.

    January 24, 2012 at 2:20 pm | Report abuse | Reply
  4. Double taxed

    What most people on the left will never point out, is that Romney (and anyone else with money in the market) was already taxed at a much higher rate on the money he earned from his job that he even put in to the stock market. The capital gains are the second time his money is taxed.

    January 24, 2012 at 2:20 pm | Report abuse | Reply
    • Nah

      No one will care because no one is interested in the truth.

      Like the fact that corporations are double taxed. Their money (because they're legal persons) is taxed on an individual basis (35%), and then taxed again once that same money is paid out to the shareholders, board, etc.

      January 24, 2012 at 2:31 pm | Report abuse |
    • Derek

      Thank you, no one is mentioning the fact that capital gains are taxed at the corporate level, and then taxed again as income to the shareholder. They'll never say that because it will hurt their case for raising capital gains taxes.

      January 24, 2012 at 2:32 pm | Report abuse |
    • DoNotWorry

      Not true. Corporations deduct shareholder disbursements from their income before figuring taxes. The money is taxed once, when received by the shareholder. I own stock in about 40 corporations and that is how it works. I am, however, taxed on the money I invest in a corporation prior to earning a return on that money, which is taxed at capital gains rate of 15%. Since churches are very political I suggest that they lose their tax exempt status. Very little of the money given to churches goes to charity, it goes to fancy buildings and entertainment for members... a little country club, if you will.

      January 24, 2012 at 2:43 pm | Report abuse |
    • not so fast, you math is wrong

      Get it right, when Romneymade his money by working, he was taxed on that money.... he has NEVER been taxed on that money again. The capital investment or Monet he invests will make MORE money. that new money is what is taxed. so If he made 120 million working and paind 20 million in taxes than he takes home 100 million. Then next year he invest the 100 million and at the end of the year he has 120 million, then the 100 million is expempt, and he paids 15% on the 20 million.

      He will never be taxed on the 100 million, so he will pay 3 million in taxes on the 20 million.

      lets say he used 2 million of the 17 million leaving 15 million... next year he invest 115 million and will never be taxed on it ( he paid them already) at the end of the year lets say he grew his investment to 137 million. 137 -115 means a 22 million dollar profit, 15% of 22 million is 3.3 million he will pay in taxes, keeping 18.7 million of which he will never pay income taxes on again.

      January 24, 2012 at 2:57 pm | Report abuse |
  5. Melanie Dallon

    For those of you who are so outraged:
    The top 1% of earners pay 34 % of all income taxes.
    The top 5% of earners pay 54 % of all income taxes.
    The top 50% of earners pay ALL income taxes.
    50% of Americans pay NO income tax.
    The treasury department credits President Bush's tax cuts for shifting a larger share of the individual income taxes paid to higher income tax payers.

    January 24, 2012 at 2:22 pm | Report abuse | Reply
    • Dave M

      I think you're missing the point. A person making $20 million/year shouldn't pay less tax because it came from investment rather than actually working for it. That seems counterintuitive. All income should be taxed the same (investement vs. earned), loop holes should be reduced (now would be a good time to get rid of the home morgatage deduction since interest rates are so low people are really saving that much) and there should be a flatter tax (but not a pure flat tax, richer people should pay a higher percentage). Your 'stats' seem more of a distraction then addressing the real issue.

      January 24, 2012 at 2:30 pm | Report abuse |
    • Nah

      dave: "A person making $20 million/year shouldn't pay less tax because it came from investment rather than actually working for it. That seems counterintuitive."

      Counterintuitive but not linked to reality.

      Raising capital gains - because you think the rich don't pay "enough" - is a good way to destroy the incentive to invest. Whether you think people have worked for their investment income is irrelevant because the entire economy would deflate quite quickly with no investment into new businesses, old businesses, struggling businesses and successful ones.

      You do realize your plan would have the ironic effect of decreasing tax revenue as well, right? Less economic activity, fewer profits, and less income = fewer taxes paid.

      January 24, 2012 at 2:35 pm | Report abuse |
    • DoNotWorry

      Snort... Rich people need a tax incentive to invest... that is a lie that has been repeated so often that it is accepted as the Gospel of God. Rich people invest to get a return, regardless of the tax rate. Otherwise, they will just eat up their principal in lifestyle and eventually have to go back to work (horrors).

      January 24, 2012 at 2:54 pm | Report abuse |
    • Alex

      Melanie, you are missing the point:

      Your statistics are for INCOME earners (not capital gains).
      The top 1% of INCOME earners do in fact pay 37% of the INCOME tax... but to be in the top 1%, you only have to bring home ~$350,000 of INCOME (which, funny enough, Mitt barely did in 2010!).

      If Mitt does no speeches this year, he will EARN $0 of INCOME even though he will make millions of dollars (all through capital gains) and he will not be considered part of that 1% for the statistic!

      So yes, the top 1% of INCOME earners do pay 37% of the INCOME TAX, but many of the wealthiest people in the US are not part of that 1% group.

      It's dual-income families that make up the major portion of that 1% (some might call them upper middle class... I'm not so sure about that classification, it's still a lot of money. Certainly, however, they do not have the kind of wealth Mitt has – they WORK for a living!)

      January 24, 2012 at 3:03 pm | Report abuse |
  6. s kel

    Decent people(im not refering to republicans) do you not realise that you cannot reason with, discuss with, or comprimise with a retrobated conservitive mind of a republican? They are appluaded the wealth of Mit Rom. which is fine, I would love to be wealthy. Its not his wealth, its the low taxes he pays on it and he means of obtaining it. Pure capitalisum(misspelled I think lol) in its pure profit motive even at others expense is evil. Pure socialism has been shown to be in itself impratical and unfair. But a blending of both like we have had before in this country ....works. Thats what this country should be striving for. But most republicans are only out to use this country up, drain it for money for them ,and move on to the next country by way of outsorceing(damn I think another misspelled word. lol oh well) division, profit and hate. Thats the republican way.

    January 24, 2012 at 2:22 pm | Report abuse | Reply
    • Dean

      1. You cannot legislate the poor into prosperity, by legislating the wealthy out of prosperity.

      2. What one person receives without working for, another person must work for without receiving.

      3. The government cannot give to anybody anything that the government does not first take from somebody else.

      4. You cannot multiply wealth by dividing it.

      5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work, because somebody else is going to get what they work for, that is the beginning of the end of any nation.

      January 24, 2012 at 2:26 pm | Report abuse |
    • Nah

      dean: "1. You cannot legislate the poor into prosperity, by legislating the wealthy out of prosperity."

      Dean, logic, common sense and citations of history don't work on ideologues and teenagers.

      It's not worth wasting your breath.

      January 24, 2012 at 2:30 pm | Report abuse |
    • bobcat

      "the government cannot multiply wealth without dividing it" It is the income disparity that is killing american buissness our consumers are so broke that they cannot afford to invest in american-made products and education expenses. short term loss by any wealthy individual will be made up in the long term by a healthier consumer base. Not every one can be rich anyone who belives that is out of their mind the middle class is and always will be the job creating nexus of our economy, we need every person in the middle class to able to be solvent to have a healthy economy, they dive demand.

      January 24, 2012 at 2:43 pm | Report abuse |
    • DoNotWorry

      Most people receiving government aid are not lazy, but are the working poor. The megarich pay such low wages to those who actually do the work creating their wealth, that taxpayers must help support them. WalMart is a perfect example. 2010 WM cleared $260 Billion. They have one million workers, most of whom receive tax support from other workers instead of a fair wage from WalMart.

      January 24, 2012 at 2:57 pm | Report abuse |
  7. Dean

    Romney paid taxes per the tax rate set by the U. S. government. How many of you 52% of the population who do pay taxes sent the government more money than they required you to pay?

    January 24, 2012 at 2:23 pm | Report abuse | Reply
    • Double taxed

      I did.............I think..........nope, I was wrong.

      January 24, 2012 at 2:25 pm | Report abuse |
  8. Dave M

    How is it fair that Romney pays only 15% income tax because it came from investment where as if he had 'worked' for the money he would be taxed at 30+%? Seems counterintuitive and that to me is the question, not rich vs. poor tax rates.

    January 24, 2012 at 2:25 pm | Report abuse | Reply
    • Double taxed

      HE WORKED PREVIOUSLY, AND WAS TAXED AT THAT RATE.
      He then used his after tax money to put in the market.

      January 24, 2012 at 2:26 pm | Report abuse |
    • Dave M

      What about someone who has never had to work because they inherited all their money? Sure their benefactor paid income tax and estate tax presumably. They should also only pay 15% on income, even though they themselves have never worked? Obviously an invented scenario but I think it illustrates how these rules favor the rich staying rich. The rules should give everyone an equal opportunity. And in my opinion should be incentivized to make people more productive....which charging a lower tax rate for investment income (and railing to eliminate estate taxes) certainly do not.

      January 24, 2012 at 2:50 pm | Report abuse |
    • Alex

      Double Taxed:

      No... that's not true that Mitt was taxed as an income earner: Hedge fund managers forgo a lot of salary and are instead paid through other methods that the IRS allows to be considered capital gains. Even while Mitt was working for Baim, most of his take home pay was not considered income for tax purposes.

      January 24, 2012 at 3:21 pm | Report abuse |
  9. WalworthNY

    It's not that I begrudge Romney his wealth. I just don't think that Romney, or any of the candidates for that matter, can relate to the majority of the population. His comment about $375K in speaking fees being "not very much" illustrates the problem. How can someone with that kind of money understand someone who's trying to support a family on $30,000/year? I wish we could vote for someone who truly understands the tradeoffs between heating the house and buying groceries, rather than the differences between derivative investment instruments.

    January 24, 2012 at 2:27 pm | Report abuse | Reply
    • Dan G.

      375K isn't much compaired to the millions in speaker fees Clinton makes. At least he made his money on his own and still desires to be a President and a leader on like Obama who made his money off of running for and becoming president; or Clinton for that matter.

      January 24, 2012 at 2:37 pm | Report abuse |
  10. Double taxed

    Now that is a valid point.

    January 24, 2012 at 2:28 pm | Report abuse | Reply
  11. Hasai

    So; let me get this straight: The gentleman is
    1) successful,
    2) charitable, and
    3) obeys the law,
    and therefore he is an object of scorn?

    The politics of envy are alive and well. America is in deep, deep trouble.

    January 24, 2012 at 2:29 pm | Report abuse | Reply
  12. Dan G.

    I think a more accurate headline would have been "Left-wing Media/Democrats attempt to deflect voters from topic of failed presidency".

    January 24, 2012 at 2:33 pm | Report abuse | Reply
  13. BOB

    ? Doe the american voters really want multi millionaires as our president, i think its time for an educated working man to run this country. it is time we stop putting these rich people in office. i have nothing agaisnt the rich, but we do't need their egotistical a** in the white house.

    January 24, 2012 at 2:35 pm | Report abuse | Reply
    • edka

      We have tried that for the last 3 years. It got us nowhere.

      January 24, 2012 at 2:38 pm | Report abuse |
  14. edka

    Please keep in mind that besides the income tax and capital gain tax all his real estate investments pay real estate taxes. That money also goes to build schools, roads and bridges. So let 2 % of people work and pay taxes and the rest of us 98% go on welfare.

    January 24, 2012 at 2:36 pm | Report abuse | Reply
  15. My name is Jose Jimenez

    Who wrote this? The article states flat out that Romney pays less than 15% in taxes then goes on to say many Americans pay less than 15%. 80% of Americans don't have annual incomes of $20 million. This article is crap.

    January 24, 2012 at 2:37 pm | Report abuse | Reply
    • edka

      These are the facts. Too bad you dont like it.

      January 24, 2012 at 2:39 pm | Report abuse |
    • Nah

      myname: "Who wrote this? The article states flat out that Romney pays less than 15% in taxes then goes on to say many Americans pay less than 15%. 80% of Americans don't have annual incomes of $20 million. This article is crap."

      And your point is what? Everyone, therefore, has a right to Romney's money merely because he makes a lot?

      Okay.

      And what will you use that money for? On government programs, bridges, roads, etc. that you benefit from using every day?

      How selfish of you.

      January 24, 2012 at 2:41 pm | Report abuse |
    • Dan G.

      That's because its the 15% tax rate minus deductions as with all other tax brackets – come on even at that rate he pays more than 80% of taxpayers. I'm sure retired people and investors in 401ks don't want their capitial gains taxed at a higher rate.

      January 24, 2012 at 2:41 pm | Report abuse |
    • David

      Jose, many Americans start with a tax rate higher than 15%, but after deducting home interest, dependents, day care, and many other things, their EFFECTIVE tax rate is less.

      January 24, 2012 at 2:43 pm | Report abuse |
    • Dan G.

      Lets get real here. The only thing wrong with Romney's wealth and taxes is that he is a Republican vice a Democrat – now that is a fact and something you will find hard to get from the media and the Far-left.

      January 24, 2012 at 2:44 pm | Report abuse |
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