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.

[tweet https://twitter.com/rickjnewman/status/161820377935396866%5D

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.

[tweet https://twitter.com/edwardvirtually/status/161824789172977665%5D

[tweet https://twitter.com/marclamonthill/status/161820174784282624%5D

[tweet https://twitter.com/marclamonthill/status/161821094037295104%5D

[tweet https://twitter.com/NickKristof/status/161781523740229632%5D

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.

[tweet https://twitter.com/Cephster/status/161824859045900289%5D

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.

[tweet https://twitter.com/Toni_TWG/status/161824885176401922%5D

[tweet https://twitter.com/jrawlinsisu/status/161823455078125569%5D

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

[tweet https://twitter.com/AndrewCDaniel/status/161823761753063426%5D

[tweet https://twitter.com/joe_hill/status/161812094528913408%5D

[tweet https://twitter.com/carlimck/status/161819689947901952%5D

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

[tweet https://twitter.com/g2slade/status/161815915418234881%5D

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

[tweet https://twitter.com/betthearm/status/161812408099287040%5D

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.

Post by:
Filed under: Economy • Mitt Romney • Politics • Twitter
soundoff (733 Responses)
  1. Marion Woofter

    Since when is it a crime to be successful. I have no problem with how much money he has or has made. It is not illegal to be wealthy. Wake up America. We are a capitalist nation, not a socialist one.

    January 24, 2012 at 11:01 am | Report abuse |
    • Mistere

      Missing the point are we? I haven't heard anyone rip him for being wealthty. The issue here is, someone who makes over 20 million should not pay an effective tax rate less than an American that makes 40k. Why is this not simple to understand? This is America, what happened to our sense of fairness?

      January 24, 2012 at 11:13 am | Report abuse |
    • Brent

      No crime of man. Perhaps a crime of God when a rich person pays a smaller percent for services that benefit the population than does the common man. It only accelerates the gap between rich and poor. To his credit, good job on the 17% to charity!!

      January 24, 2012 at 11:16 am | Report abuse |
    • Brent

      BTW Marion, if we were a socialist nation, you might have some of his money in your pocket. Sorry that upsets you.

      January 24, 2012 at 11:19 am | Report abuse |
    • TRouble

      I agree that every PERSON should pay their fair share which is most likely somewhere around an 18-20% flat tax. You spend earn more, you spend more, you're taxed more. However, asking that people that take the most from social programs , and too ask nothing of them in return is just a ridicules as asking the rich to pay for everything disproportionaly in my opinion. What's fair is that we ALL pay something!

      January 24, 2012 at 11:24 am | Report abuse |
    • Brenda

      It's funny the people that are throwing around words like ignorant when THEY don't know what they are talking about. The average American actually pays an effective rate of around 5.7%.

      January 24, 2012 at 11:28 am | Report abuse |
    • CG

      Wow, you have completely missed the point. You do realize the entire point of all this is what percent tax he paid, not his gross income?

      January 24, 2012 at 11:30 am | Report abuse |
    • Sarah

      @TRouble – if everyone came from the same social and economic background, had access to the same school systems, had access to the same values, then yes, I agree with you. However, fact is, this will never happen. Like it or not, it is what it is and as a society we must find was to make this work for all. There is no advantage, as a society, for the rich to get richer and the poor, poorer. We claim to be a Christian nation, didn't Christ preach that we are to care for the sick and the poor?

      January 24, 2012 at 11:32 am | Report abuse |
  2. Matt

    Mitt Romney paid 13.9% taxes in 2010 (less than 2% more than I did) but in 1987 he would've paid 28%. That means he would've paid DOUBLE under Reagan's tax code. This is why we're broke.

    January 24, 2012 at 11:02 am | Report abuse |
    • Lokust

      ^^^^^^^

      This is the point everyone should be understanding. This is why the deficit and income gaps have skyrocketed.

      January 24, 2012 at 11:16 am | Report abuse |
    • Jeff

      Your point is based on an erronious assumption that he would have made the same amount if the capital gains tax was double.

      Additionally, he that would have left him with less funds to apply in the targeted, and, when chosen as carefully, as I suspect Romney does, more efficent, manner charity affords (that's why we give tax deductions for charity.

      January 24, 2012 at 11:26 am | Report abuse |
    • BigHwasdemo

      Hey dummy, we are broke because the GOVERNMENT SPENT MORE THAN IT TOOK IN, NOT BECAUSE ROMNEY PAID LOWER TAX. I've heard of fools before, but now I have seen some.!!

      January 24, 2012 at 11:41 am | Report abuse |
    • Darth Cheney

      Finally, someone who gets it! Most of the comments here reflect a very low national IQ.

      January 24, 2012 at 2:21 pm | Report abuse |
  3. jimbo84

    It used to be foreign countries bemoaned the overall success of America in general. Now, Americans bemoan the success of other Americans. Romney made over $40 Million during the past two years – and didn't even have a job. He gave more in charity than I bet over 99% of Americans..and we're criticizing the guy for being successful? What does that say about us?

    January 24, 2012 at 11:03 am | Report abuse |
    • dakooj

      No one is criticizing him for being successful. He also is obviously a very generous person, as are most Mormons. The problem is not with Romney, but with the current US tax code and the wealth disparity in America. It is unfair that I bust my hump every day working for guys like him, wondering if my checking account will make it to the end of the month without overdrafting, yet I pay 2% less in federal taxes,10% more if you include my payroll taxes, and even more if you count my state and city taxes. Corporations are making record profits, yet wages have gone down 10% for the average middle class American over the last 40 years. I just want to live in a country where I'm not ocnstantly struggling despite working hard and doing all the right things(i.e. master's degree, working 60 hours a week but only getting paid for 40...etc.)

      January 24, 2012 at 11:20 am | Report abuse |
    • Doug

      I have seen very few people criticize him for being successful. The problem is that he has benefited from a loophole in the tax code.

      We made the decision to tax capital gains at a lower rate to encourage investment. However, investment bankers have taken advantage of this, claiming their income from their jobs as capital gains. Romney took in $12.9 million from Bain Capital, his former employer, yet even though this is money paid to him by his employer for performing his job, because of this loophole he is able to claim this money not as taxable salary, but instead as capital gains - cutting his tax in half. This is obviously not the original intention of the law.

      January 24, 2012 at 11:49 am | Report abuse |
  4. lefty avenger

    What Debate? The top 1% aristocratic wall street banking oligarchy exploit everyone and everything and take all the money. They write the rules to pay less taxes while soaking us dumb dumbs who make between $25k to 100k a year. America is destroyed right now and sinking further. The Rich have not payed their fair share and have exported for the jobs overseas for greater personal profit. It's already game over for the 99% and you don't ever know it!

    January 24, 2012 at 11:04 am | Report abuse |
  5. DP

    The argument is to keep taxes low for the wealthy so that they can create jobs. Thus, simple question for Romney: How many jobs have you created in 2 years?

    January 24, 2012 at 11:06 am | Report abuse |
    • Mike C

      Simple solution. Everyone needs to put all their money in investments! Everyone in America is just stupid for being paid salary instead of being paid in investments. That's why the rich are rich, because they're smart. Also because they get big inheritances from their parents. Behold the new American dynasty, rich spoiled kids getting their rich spoiled parent's money, and only paying 15% tax. Then they live on the interest while the people that actually work in America carry the burden.

      January 24, 2012 at 11:46 am | Report abuse |
  6. The Bear

    give me a break...warren buffet pays how much? sean penn pays how much? sarandon? moore? hel, what did obama pay before he had his eye on the presidency????????

    January 24, 2012 at 11:07 am | Report abuse |
    • Duane

      I think a major point is that Warren Buffet publicly says that he pays too little taxes (he points out that he pays less than his secretary by %), but that is the system that we have. Warren Buffet is for changing the system so that people pay their fair share. I doubt Romney wants to do the same thing.

      January 24, 2012 at 11:49 am | Report abuse |
  7. Bob

    Just another rich pig getting richer at the expense of others. Time to pay your fair share, Mittens old boy.

    January 24, 2012 at 11:07 am | Report abuse |
    • Rick

      Jealous?
      According to the current tax code, he is paying his fair share.
      And he's also donating more to charity each year than you or I will ever make in our lifetime.

      January 24, 2012 at 11:14 am | Report abuse |
  8. Demo Joseph

    14% – What about the 38% tax rate for folks making 80,000.00 annually. He needs to be horse whipped. And what about the 20,000 a year folks are paying high rates of taxes, while he sits on his fanny and paids 14%, WAKE UP AMERICA. You are worried about China, and all the OTHER countries, we need to get rid of money hungry leaders fixing the tax rate to assist them and leaving us out. like they are doing the Arab world.

    January 24, 2012 at 11:10 am | Report abuse |
    • Rick

      You confuse payroll taxes with taxes from earnings on investments.
      They have different rates.

      January 24, 2012 at 11:15 am | Report abuse |
    • Brenda

      That is an effective rate of 15%+- and it's on INVESTMENT income. Most of us pay an effective rate of around 5.7%. You can't not be educated about what you pay and how the system works and then be mad at someone for having more than you. Mitt is largely a self made man.

      January 24, 2012 at 11:18 am | Report abuse |
    • Ike

      Hello? Go learn how to calculate taxes, or hire an accountant because you are messing yourself over. Someone making $20K [then takes Standard Deduction of $11.6K, and a single exemption of $3.7K] only pays taxes of $473, or an effective rate of 2.3%. Learn the difference between tax bracket and effective tax rate.

      January 24, 2012 at 11:42 am | Report abuse |
  9. dajmipiwo

    Let me get this straight. I pay 28% tax on less than 50k–after my salary got cut because of financial shenanigans from guys like this–but he pays 14%? Seriously?

    January 24, 2012 at 11:11 am | Report abuse |
    • Rick

      Again... payroll taxes are higher than taxes on earnings from investments.

      January 24, 2012 at 11:17 am | Report abuse |
    • Brenda

      How exactly did Mitt Romney's "financial shenanigans" get you to have your pay lowered? Most of us pay an effective tax rate of 5.7%. Also, we're talking investment income versus earned income. He also gave another 15% of his income away to charity.

      January 24, 2012 at 11:32 am | Report abuse |
    • Ike

      Seriously? I doubt you paid $14K in taxes, if you only made $50K. That magical 28% is your tax bracket, not your effective tax rate. If you DID pay $14K on $50K then you need to seriously check your math or hire a smarter accountant, because you screwed yourself. Even if you were single and took NO DEDUCTIONS at all, not even the standard, you should have paid only about $8K which means you had an effective rate of 4%.

      January 24, 2012 at 11:32 am | Report abuse |
    • Ike

      Sorry Correction 16% [hmm about what Romney paid]. But that is with NO DEDUCTIONS, NO EXEMPTIONS...and if you filed that way...then nothing is going to help you from yourself.

      January 24, 2012 at 11:35 am | Report abuse |
  10. Mistere

    For all the media and right wingers that marginalized the Occupy movement, something amazing is actually going on here. Republicans are beating each other up about how much they make and pay in taxes. Amazing.... I hope this means change is coming!!

    January 24, 2012 at 11:11 am | Report abuse |
  11. Dennis Daniels

    And the Republicans will lower that 13.9 percent even more.

    January 24, 2012 at 11:13 am | Report abuse |
  12. Jim

    I think Romney's returns are a non-issue. He pays the same tax rate that any American pays on investments. The difference is how he makes his money, not the tax rate he pays. Absent in this discussion is why he pays less. It isn't because he's wealthy or has more influence, it's because he risks his money in investments, and that risk carries a higher reward in the form of a lower tax rate. People willing to risk their money in investments deserve to pay a lower tax rate, and that is true whether it's Mitt Romney or Joe the Plumber. I wish Obama would stop pushing class warfare and wealth envy politics and address the core issues, like getting rid of a progressive tax system that punishes lower and middle-income earners the most. As long as we have income-based taxation, we will have income inequality. The more progressive that system becomes, the greater the gap. Rather than promote policies that help Americans achieve the financial independence that Romney has, Obama concentrates on devising new ways to take what Romney has and give it to others. That is neither fair nor equitable.

    January 24, 2012 at 11:13 am | Report abuse |
    • Brenda

      This is likely mostly long term capital gains. Those in lower income brackets of 15% or less actually pay 0% on long term capital gains. Any short term capital gain is still taxed at ordinary income up to 35%.

      January 24, 2012 at 11:26 am | Report abuse |
    • Doug

      The problem with your argument is that it is not entirely true. As you indicate, some of this income is due to his personal investments. However, large portions of his income is payments for his work at Bain Capital, which he is also allowed to claim as capital gains even though it is payment from employment.

      Investment bankers in some cases can claim money that they earned from their jobs as capital gains. The problem is that, unlike private investment, these people are not risking their own money - if an investment banker loses his clients money, he does not get a negative salary. However, if they make money for their clients, their payments can be claimed as capital gains, and subject to a lower tax rate. To most Americans, it seems unfair that money made from some jobs can be taxed as capital gains, while the rest of us have to pay much higher income tax rates on our job-related income.

      January 24, 2012 at 12:49 pm | Report abuse |
  13. retriever2

    Give the guy a break....he actually paid 3 million dollars in taxes, the percentage is irrelevant. Of course he's getting richer at the expense of others....it's called capitalism

    January 24, 2012 at 11:14 am | Report abuse |
    • Brenda

      And he gave another 15% to charity.

      January 24, 2012 at 11:16 am | Report abuse |
  14. Brenda

    This is all on INVESTMENT income, not EARNED income. That's tax law. He actually pays the higher rate of 15% versus 10% for lower incomes. When you consider deductions and the like, he pays a higher effective rate than most Americans. Most of us pay an effective rate of around 5.7%. This just underscores how most people don't pay attention to what they pay or how the system works and only complain that someone has more than they do. He also gave away another 15% of his income to charity.

    January 24, 2012 at 11:15 am | Report abuse |
    • Doug

      Actually, this is not completely accurate. Much of it ($12.9 million) is money paid to him by his former employer, Bain Capital, for profits resulting from work done while employed with them. Because of a loophole in current tax law, investment bankers can claim such income as capital gains.

      This is one of the things that people like Buffett have been fighting against - it seems unfair that people working certain jobs can claim almost their entire income from their employment as capital gains rather than salary, and in the process reduce their tax liability roughly in half.

      January 24, 2012 at 12:36 pm | Report abuse |
    • Bill

      To Doug.
      What you seem to be complaining about is that Mr. Romney gets a different tax rate than you do, but you are comparing apples to oranges. His W-2 shows no income because he doesn't have a job. He is getting income related to a job he used to have, most likely dividends from stock options he got as CEO. If he had a job and got paid 21 million then he would be paying 38% taxes on that money just like pro athletes and movie stars do. You and I both pay the same rate on our investments as he does, that is by definition fair. Its just neither of us have enough income coming from those investments that we can stop working and live on investment income. Your complaint about being able to manipulate compensation to lower their tax rate has merit. A person should not be allowed to take an artificially lowered salary with compensation coming in other forms at a more tax advantagous rate. Perhaps in order to qualify for the lower investment tax rate you should have to have some threshold of earned income, ie a job. The trick is how do you encourage investment while preventing heavy taxes on the earnings of the investment.

      January 24, 2012 at 3:37 pm | Report abuse |
  15. Phillip

    I am firmly in the middle class. Funny thing is, I was doing my taxes before I read this story and decided to run a few numbers. Just to be fair. My percentage in Federal Income (Line 2 of my W-2) indicates that I will have paid 16% for 2011. If you add in my social security earnings (which I doubt I will ever see once I retire) along with Medicare it jumps to 23%. 26% once you consider my state taxes. I don't care that Romney is rich–good for him–it is America. Simply put: I just believe that people who make more than me should at least pay the same or a slightly higher rate than me. In reverse, people who make less than me should pay no more than what I pay or less. I have no problem with a sliding scale. I just thing the scale is out of balance..and I would really appreciate someone doing somethign about it. That is what I am listening for this year.

    January 24, 2012 at 11:15 am | Report abuse |
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23