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. Lyle

    What everyone seems to forget is the money used for his investments were money he earned from income taxed at 35% and now being taxed again at 15% that's 50% tax. As far I am concerned it's all money he earned. How about getting an education, make investments and earn the same yourself and quit whining about someone elses success

    January 24, 2012 at 12:49 pm | Report abuse |
    • Don

      "What everyone seems to forget is the money used for his investments were money he earned from income taxed at 35%"

      Actually, no, much of that money was made through Bain and not paid as ordinary income, but taxed as capital gains due to favorable tax laws.

      "and now being taxed again at 15%"

      No, you are only taxed on your capital GAIN. GAIN is a synonym for PROFIT. It is only taxed once, at 15%, and your original investment isn't taxed a second time.

      "How about getting an education, make investments and earn the same yourself and quit whining about someone elses success"

      Yes, you might consider doing so. If you actually were investing and enjoying the lower long-term captial gains tax rate, you'd know profits are only taxed once, at that favorable 15% rate, not twice.

      January 24, 2012 at 1:03 pm | Report abuse |
    • dutcher

      That is not true. The 15% is on new earnings only. While the taxation may have been higher on the money that he used to invest, the only money he is paying taxes on is on what his investments generated, not his wealth base. I wonder how many jobs these investments actually created since the investeors are the job creators.My guess would be close to zero.

      The point is not that Romney is wealthy and the point is not that he paid the amount of taxes he did, as long as he paid everything he was legally required to. What I find missing is that the Republicans believe that doing away with the capital gains tax completely (i.e. a 0% tax rate on capital gains) will somehow create jobs. Under this scenario Romney's effective tax rate would have been much lower, his wealth would be bigger and there still would not be any more jobs.

      January 24, 2012 at 1:06 pm | Report abuse |
    • notanapologist

      Lyle – I think you are missing the point. the fact is that you have a massive deficit caused in part by revenue shortfalls due to low taxes. You have the people most able to pay, like Mitt Romney, paying less...far less....than most middle class Americans. Most don't have the ability to shield their income like Mitt does. You have an accelerating wealth divide, a decreasing middle class, a crippling budget crisis and failing infrastructure. If this all sounds good to you keep going. If not why not go back to the mid-90s when you had supluses under Clinton....and money to invest in education and infrastructure.....

      January 24, 2012 at 1:08 pm | Report abuse |
    • pati

      Actually, you are wrong. The money used to buy equity was taxed at 35%. When that equity is sold, the profit is: price at which equity is sold-price paid for equity = profit. And the tax on THAT profit is 15%.

      January 24, 2012 at 1:11 pm | Report abuse |
  2. DrBessey

    Does anyone recognize that Mitt Romney is a very intelligent person. He figured out how to invest, have a steady income, and minimize his taxes. If Newt Gingrich is so smart why is he still paying 30%? We need a president that is smart with money and management right now. Anyone has the right and privilege of paying a 14% tax rate. I'm sure he had a lot of years of paying the normal rate before he got to where he is now. He worked hard, but more importantly he worked SMART.

    January 24, 2012 at 12:51 pm | Report abuse |
    • dutcher

      I have no problem with Romney being smart and having invested smartly and taking advantage of the tax code. This has nothing to do with Romney as a person or a tax payer. It has to do with him as a Presidential candidate. He seems like a likeable guy. I disagree with him (and the current Republican mantra) that our tax code needs to change to benefit the investors more. I do not believe that creates any jobs because it doesn't stimulate demand. No company hires extra people because they have investor money or because they have too large a profit. They hire people when there is demand for their product. None of the republican tax reform ideas do anything to stimulate the demand in this country.

      January 24, 2012 at 1:13 pm | Report abuse |
    • Thor

      Dutchy, you forget that Romney, although accused of destroying buisnesses that were poorly performing, created a butt ton of jobs from the others he created. Seems the smart guy with the perfect hair hasn't been accused of doing anything illegal either, as opposed to at least one of the others.... Then there is Barry O. Well, we ain't better off now then when he ran, so..... he don't make no sense either.....

      January 24, 2012 at 1:18 pm | Report abuse |
    • dutcher

      Well I would disagree that things aren't better then when Obama came into office. If you look at the actul data, while it is far from where we want to be, it is definitely better than when he came into office.

      I am not indicting capitalism, I even believe in it. And I am not saying that Romney hasn't done good things or that Bain did or did not create jobs. I think all these things can be debated. My argument is more about our current tax code (and the proposed tax code by the republicans) and how that will impact the country. I don't see how reducing the capital gains tax is going to do much good for the country overall.

      January 24, 2012 at 1:29 pm | Report abuse |
  3. pod

    The truth is over 50% of US households pay NO taxes at all. That is the problem. Enough about the wealth inequality crap. Get a job, go to school, contribute and pay your share of taxes to those 50%+ of households riding the gravy train. These are not Rich skipping out on paying taxes these are people on the welfare system train that was supposed to elevate them out of Poverty in the 60’s...Johnson social welfare experiment was and will continue to be a giant failure. No one helped me in my life, didn’t stop me from getting a bachelors degree, do post grad work, and get a masters degree. Once I had those I got a nice well paying job, BECAUSE I WORKED FOR IT. Plus I paid all the tuition myself, and my share of taxes when I went to school, because I worked while in college. Keep word there for all you hand out focused lazy people is WORK… I think there are too many lazy hand out focused big government handout types out there in this country and its dragging the whole ship down. Look at those occupy people for example. I wouldn’t hire a single tattoo covered one of them…The problem is they are lazy, lack focus and ambition. They want the government and private sector to just hand them jobs. The USA has never worked that way. That is why immigrants come to this country and are successful. They work hard, understand that’s how you get ahead. Most come here and succeed with little more government assistance other than the green card. We need to stop government run social welfare..it never worked it will NEVER work. And we need to end the communist propaganda taught in our schools. You get ahead by working hard, and never ever letting up. Doesn’t matter what race, creed or color you are. Go interview successful wealthy people, most got that way through work..Some like Al Gore inherited their money…and feel guilty for it…

    January 24, 2012 at 12:52 pm | Report abuse |
    • CoolLarry9

      If by tax you mean income tax, then yea 50% don't pay. But you forgot about the following – payroll tax, sales tax, gas tax, property tax. And some people don't pay income tax not because they're "illegal", but because they have so many deductions as made available under the law. If Mitt can legally pay less, but others do not have the right to do so in your eyes, you are totally being hypocritical. True, there will always be those that don't pay income taxes because of illegal reasons, but they to have to pay some form of taxes in one form or another.

      January 24, 2012 at 1:02 pm | Report abuse |
    • nick

      we need well fair because of company's like mitties Bain capital who has dissolved more jobs than we lost since Obama took office If you go to school get your b.a. and no ones hiring how you gonna pay the loans back smart guy if these rich guys are so smart from school why can't they realize there pushing "pushed" the USA to third world status If 50% don't pay taxes that's means 150 million plus live in poverty because of shady smart guy "investments" ponzi schemes

      January 24, 2012 at 1:16 pm | Report abuse |
  4. Michael

    He pays the tax rate his lobbyists and others PAID for. He should recuse himself since his tax plan with actually pay for his campaign in 1 year

    January 24, 2012 at 12:52 pm | Report abuse |
  5. Vic of New York

    Ok there are a few issues at play here: 1) On the issue of income inequality it suffices to say that over the last 15 years (more actually) middle income earning has flatlined while Executive income has tripled When you factor for infaltion, middle income families actually have gone down hill respective to buying power. Anyone who would argue that fact is probably also a Climate Change denier and believes the President is a secret Kenian / Muslum. And you KNOW who those people are!

    2) With respect to Taxes: The Bush tax cuts are what put this nation in debt in the first place! That's a fact – unless you're a climate change denier who wants to ban Sheria Law taking over government.

    3) With respect to Romney: He's not the first welathy guy to run for office (most are). But HOW he made his money says a lot about who he is. Had Romney been President instead of Obama – GM would be dead, millions would be our of work, the nation would be in a steeper depression and guys like Mitch would be lining their pockets. That's not my kind of President – maybe he's yours.

    January 24, 2012 at 12:54 pm | Report abuse |
    • Thor

      So you list all these buisness problems.... shouldn't we get a buisness guy to fix them? How is Newt, or Rick, or Ron, or Barry gonna make that happen right now? Newt can't come up with anything new, Rick is tired old religion, Ron is hysterical, Barry hasn't..., but it seems that the only one who has made good buisness is..... well, sorry, I'm not Mormon, but..... seems the logical choice is Mitt.

      January 24, 2012 at 1:13 pm | Report abuse |
  6. Randall

    It amazes me that most of the people that complain about the tax rate for someone else have no problem paying zero or less than zero (via the earned income credit). But, I do agree out tax code is WAY to complex and should be as simple as possible (less than 100 pages). The tax code should not be a device to influence behavior (investment or otherwise).

    January 24, 2012 at 12:55 pm | Report abuse |
  7. citizen

    Cris Christy said on "meet the Press".
    Paraphrashing here, " These jobs Romney created at Staples are good middle class jobs, where people can save money and send their kids to college".
    Well how about showing us one person who can pay the mortgage, make a car payment, buy food, pay the electric bill, buy gasoline, pay for insurance, pay for heat on an income made at Staples.
    Get real please.
    Who cares if 86000 more crap jobs were created.

    January 24, 2012 at 12:58 pm | Report abuse |
    • Majestic_Lizard

      Jobs at Staples don't even offer job security. You are looking at bare subsistence living, not college.

      January 24, 2012 at 1:03 pm | Report abuse |
  8. Don Palmer

    All this is is the same old political crap. Look at me I'm honest because I don't hide my financial situation. All of the these people are frauds,liars,and cheats and really don't care about the people that actually carry the government and big corporation financial blunders. This country may be called a democracy but most people would agree we just have a lot more rulers than other nations have had on the past.

    January 24, 2012 at 12:59 pm | Report abuse |
  9. Majestic_Lizard

    The real issue isn't that the senators, congressmen, and presidential candidates are millionaires. The real issue is that they became millionaires by selling out democracy to lobbyist billionaires. Lobbyists control legislation and hijack our country. They answer to no one and are accountable to no one. We live in an oligarchy, not a democracy. One might be tempted to think that a revolution would be needed to change that.

    January 24, 2012 at 1:01 pm | Report abuse |
  10. Bubba™

    Yep, 80% of Americans have 15% tax rate cuz they're on welfare or unemployment.... 19% of Americans pay 35% taxes ...... and the wealthy 1% pay essential then 15%

    January 24, 2012 at 1:03 pm | Report abuse |
  11. Dano

    Nobody should have to defend themselves for being successful. BTW, there's never been a society on earth where everyone had the same amount of wealth. It just won't happen.

    January 24, 2012 at 1:06 pm | Report abuse |
  12. Jay

    Romney also pays over 15% of his income to private charities. This is money well spent vs. money wasted building solar unicorns ($500 million for Solyndra, thanks Obama). Also, look back to Obama's tax returns before he was running for prez. Obama gave less than 1% to charity for years!!! But he wants to force you to pay more to his great Federal charity.

    January 24, 2012 at 1:06 pm | Report abuse |
  13. Patricksday

    Romney has never known struggle or hard times, he is totally out of touch with the American people unless they are part of the 1% who continue to profit after one of the biggest Heists in American History on Wall Street and no one has gone to jail, but the working class, poor and elderly are the problems with the debt. They didnt rob America the White Collar workers of Corporate America did that, and now they want a CEO to be President of the USA?

    January 24, 2012 at 1:06 pm | Report abuse |
    • Thor

      Oh.... I guess Amos and Andy have done much better?

      January 24, 2012 at 1:08 pm | Report abuse |
    • Patricksday

      Racism is really the bottom of all of this, and of course Hatred of anyone who is not part of the White Wealthy Elite. But sadly there are more people who have suffered at the hands of GREED of Wall Street, Romney will hunger for the Presidency but it wont happen. He is a Reptilian puppet who will show his true colors before its all over.

      January 24, 2012 at 1:12 pm | Report abuse |
  14. Thor

    Let's see, I have a choice ... finally. I can choose a guy who has single-handedly, without malice, just being the color he is (yes I am racist, but that's not my point here!), has single-handedly divided the House and the Senate to such a polarized extreme that neither side can come to common ground on ANYTHING. I can choose a guy who has had to resign from the congress in disgrace. I can choose a guy who wants to withdraw US forces from everywhere in the world in order to effectively remove US influence from defending free sea lanes and commerce movement around the world. I can choose a guy who wants to change the laws of the land to fall in line with his Catholic religious beliefs. And I can choose a guy who has made so much money that it is obscene, and who knows buisness and development like none of the others. I get to try to choose a guy who will solve the current and immediate problems of the United States that are: joblessness, an arrested housing market, loss of cheap labor, inability to pay expensive labor, buisness movement overseas, and military forces fighting religious zealots overseas. D'ya think we need a buisness success, a kind of religious guy, and one who hasn't broken the law?

    January 24, 2012 at 1:07 pm | Report abuse |
  15. citizen

    The common knowledge narrative of venture capital is that vc's buy companies, load them up with debt while enriching vc managers, not enriching pention funds and the like who are their purported stakeholders.
    Romney can not connect with the American people because he shares not one whit of perspective with folks who work very hard for very little.

    January 24, 2012 at 1:07 pm | Report abuse |
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