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. CincyBen

    The question is how much must we give to the government to waste. Romney put his money into charities of HIS choice. I wonder how much all the complainers contributed to charity. And yes his church qualifies. Everyone forgets that the dividends he is paying 15 % on have already been taxed at probably 35 % at the corporate level. Combined that income is taxed at 50 %. Exactly how much should he pay.

    January 24, 2012 at 11:22 am | Report abuse |
    • ddblah

      Giving to his own church is part of his commitment to his own religion, absolutely not a charitable giving because great majority of that money is not used to help anybody other than his own religion.

      January 24, 2012 at 11:29 am | Report abuse |
    • L F

      If my effective rate wasn't 27%, I'd have money left over to spend more in charity (which I do, but not even close to that percentage)

      January 24, 2012 at 11:35 am | Report abuse |
  2. Harry

    Why do we care if someone made a lot of money? It think it is good to show that Romney knows how to handle his money and live the American dream. That is what we need right now. We need someone who will help us out of the red that Obama got us into. Why do we get frustrated with basic capitalism principles?

    January 24, 2012 at 11:23 am | Report abuse |
    • L F

      I care when the tax laws are made by the rich to benefit the rich. Why am I middle class and stuck at a much higher effective tax rate? Why does Buffet come online and say he pays a lower rate than any of his staff including his secretary? It is not equitable...

      January 24, 2012 at 11:38 am | Report abuse |
    • ddblah

      Why you think anybody gets frustrated by how much money he makes?

      Instead, you seem to be frustrated at those who can't make that much money and yet have to pay higher tax rate.

      January 24, 2012 at 11:39 am | Report abuse |
    • another1

      Bush got us into the red, not Obama. Just because you heard it on Fox news doesn't make it true (they are not a news organization). People aren't mad that he is succesful, they are mad that while he's making $42 million and payin 14% tax on it, the rest of america is making $50,000/yr or less and paying over 30% tax rate, and this simply is not air at all. Republicans favor the rich when making tax laws, with no regard for what the majority of hard working americans. You can't spin your way out of this, it is plain as day wrong.

      January 24, 2012 at 11:47 am | Report abuse |
  3. ddblah

    Giving to his own church is not a charitable giving, it's part of religion. It is legally a charitable giving. But the money is used to fund his own church, to build temples, print bibles, hire pastors, build magnificent cathedrals. Only a very small fraction of that money goes to helping the poor.

    No, it's not charitable giving. Absolutely not.

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

      False. The church has no paid clergy.

      January 24, 2012 at 11:29 am | Report abuse |
    • retriever2

      You forgot ..the priesthood legal defense fund.....

      January 24, 2012 at 11:33 am | Report abuse |
    • ddblah

      Well, the pastors print money to survive? Most churches do pay their pastors!

      January 24, 2012 at 11:34 am | Report abuse |
    • another1

      you are right, it isn't really charity, because the Mormon church demands their followers pay a specific amount of their income. It is more a club dues situation than a charity.

      January 24, 2012 at 11:35 am | Report abuse |
  4. jkeesey

    Change the tax code, not the person that made money because of the laws in place. Nothing illegal here

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

      Exactly!!! Unfortunately, America is a plutocracy and congress is considered to be a millionaires club so what is the reality that they will write laws to benefit the rest of us....

      January 24, 2012 at 11:50 am | Report abuse |
  5. dave

    Hey folks that incensed at his tax rate. Do you realize that he ALREADY PAID FULL TAXES ON WHAT HE MADE???? The 14% tax rate is the second go round on his taxes. He invested already taxed money and they money he made on his investments got taxed again. Its called capital gains! If you don't believe one should be taxed lower on investment income (second tax) than you are just plain ingnorant

    January 24, 2012 at 11:25 am | Report abuse |
    • ddblah

      You think people are asking him to pay tax using his total worth?

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

      Dave – not true – see my other post. Romney made much of his wealth at Bain Capital, which is a private equity fund that invests money from their limited partner investors, in other words other peoples money. Bain, and other funds like it, take the pool of money from their limited partners and invest it in corporate buyouts and other companies. If they generate a positive return on the money, they keep typically about 20% of the gains as a bonus for their performance. The limited partners absolutely should pay capital gains rates, but why should Bain, who did not contribute the investment capital, pay capital gains rates? They did not take on any risk – if they generate a negative return they don't have to pay back the limited partners for the loss – and their business is investing other peoples money, just like some people get paid to build cars, or sell widgets, or provide accounting services. They should pay normal income tax rates. If they then take their earnings and invest it, they should then get capital gains rates, but not on the initial income when it is first earned.

      January 24, 2012 at 11:42 am | Report abuse |
    • L F

      First, second, third incomes do not matter, his effective rate after everything is 14%. Therefore, he has a much higher percentage of all his income to invest than me...

      January 24, 2012 at 11:43 am | Report abuse |
  6. Joe

    I don't like the idea that I pay a higher rate than Mr. Romney. I'm a full-time single father, and while I do "well", I'm not over the six figure mark yet.

    Tell me again why his tax rate should be lower than mine? I don't know a lot of people in my income range (or lower) who makes the majority of their money from investments.... this seems entirely set up to help the rich get further ahead faster than the rest of us.

    I don't hear Romney working to get this changed. The man makes so much money, he has no idea what it's like to be "me".

    January 24, 2012 at 11:25 am | Report abuse |
    • Mike

      Go educate yourself – once you get your tax return, you're effective tax rate is probably less than Romney's. You think you pay a lot up front, but you get most of it back, as do most people. Besides, Romney paid the full amount of taxes the first time around before he invested the money, and now he is paying even more taxes on the capital gains.

      January 24, 2012 at 11:37 am | Report abuse |
    • John777

      You have to educate yourself. Capital gains is a tax paid on investment gains not the original investment.

      January 24, 2012 at 1:13 pm | Report abuse |
  7. Ourania

    Matt thank you for mentioning Ronald Reagan!!!! The current GOP have nothing to do with Reagan!!! Reagan had common sense, they do not!!!! According to GOP let the poor die !!!!Let me remind you something to all these "Christians" "Again I say to you, it is easier for a camel to go through the eye of a needle, than for a rich man to enter the kingdom of God."

    January 24, 2012 at 11:25 am | Report abuse |
  8. Squiddly

    You're right nobody likes paying taxes and that's especially true with the upper 1%. I don't have a problem paying my fair share but what will happen when the middle class is taxed out of existence.

    January 24, 2012 at 11:25 am | Report abuse |
  9. John

    Look at all the hate here. Typical of parasites whopunish success to justify their loser lives? These so called 99% are not so. They are about 5% and are nothing but parasites who feed off the droppings of those who contribute. Plus you can smell them before you see them....

    January 24, 2012 at 11:26 am | Report abuse |
  10. dave

    capital gains should be taxed at a lower rate...its the second time taxed. If I buy stock with already taxed money and then make more money...I should pay less of a tax rate. Its the second go round!!!!!

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

      This is new money to you, you are not being taxed on money you already earned. The masses are getting screwed. By your logic I should not be taxed on my saving account interest or my IRA and 401k earnings when I pull them out at anything other then the capital gains tax rate, but I am. The reason is that people who earn their money by working are not allow the investment income break the way rich people are.

      Look, there is no doubt a problem with our system. You cannot argue that the wealth of this nation is not being distributed into fewer and fewer people's hands.

      January 24, 2012 at 12:50 pm | Report abuse |
    • steve

      Sorry, I should have said Middle Class, not masses.

      January 24, 2012 at 12:57 pm | Report abuse |
  11. MCFx

    He's in the top 1% .... in charitable contributions!!!! How many middle class Americans can say they give 15% to charity?! How many wealthy, Hollywooder's, or professional athletes have those bragging rights??? The guy gives up about 30% of his income overall. And why didn't we ask for Sen Kerry's tax records when HE ran for President? That guy and his wife are LOADED!

    January 24, 2012 at 11:29 am | Report abuse |
    • dakooj

      I don't count LDS as a charity...

      January 24, 2012 at 12:12 pm | Report abuse |
  12. Charles

    There is nothing wrong with Romney's financial success – most people would aspire to be so successful. What is wrong is the tax code and the treatment of carried interest in investment funds as capital gains rather than regular income. The investors that provide the capital to the private equity, venture capital, or hedge fund certainly should have the income that they earned treated as capital gains, since they committed the capital and took the risk. The person responsible for investing their money, like Romney when he headed Bain Capital, keeps typically about 20% of whatever investment gains they generate. Since their primary business is investing other peoples money and they don't take on any capital risk, their gains should be taxed at ordinary income rates and not the 15% capital gains rate.

    January 24, 2012 at 11:30 am | Report abuse |
    • retriever2

      Absolutley correct. The real issues are the tax code, not his exploitation of same.

      January 24, 2012 at 11:41 am | Report abuse |
    • Cody Wright

      I'm glad to here somebody else understands the carried interest exemption. Unfortunately I think 99% of the population doesn't get it. Guys like you and me need to educate everyone we can or else nobody is going to know how the ultra rich is getting away with paying 20% less than other wealthy hard working Americans who can't use the carried interest exemption in their careers.

      January 24, 2012 at 6:22 pm | Report abuse |
  13. Yep

    So people want to criticize the guy for working hard and paying the taxes that are at his legal rate? At least he paid taxes unlike some other politicians.

    January 24, 2012 at 11:30 am | Report abuse |
  14. 222joco

    It's refreshing to see someone paying their fair share...

    January 24, 2012 at 11:30 am | Report abuse |
  15. retriever2

    Just a thought.....Perhaps if the government was more accountable for how they spent our money we could all collectively pay less taxes.....Nothing is easier to spend than someone elses money......

    January 24, 2012 at 11:31 am | Report abuse |
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