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. Greg

    Lyle – companies do not pay taxes on dividends paid to stockholders. That is deducted from the companies income. And, he's not being taxed on the same income again – he's being taxed on the income generated from those investments – just like you paying taxes on the interest earned on your savings account. The difference is, that interest to us is taxed at the higher Income rate – not the lower capital gains rate like Romney. What I don't understand is why everyone believes the lie that lower capital gains tax creates jobs. Lower rates on capital gains cause people to WITHDRAW investment, so that they can take the income at the lower rate. In no way does it encourage companies to leave the money in for more investement. You want to encourage that, then raise the taxes on gapital gains, so it gets reinvested, instead of distributed to stockholders.

    January 24, 2012 at 1:07 pm | Report abuse |
    • JohnRJ08

      And the income which Romney earned initially from Bain was paid in the form of stocks in the companies which he helped take over. That stock was deposited in offshore accounts. So, in effect, Romney's initial income from Bain was NEVER taxed. It is sitting in those offshore accounts, and he is paying 15% tax rate on the dividends it continues to generate. This is why Romney will NEVER release any of his tax returns while he was at Bain. What he and Bain have done is not necessarily illegal, but it shows fantastic efforts to avoid taxes and proves that Romney is anything BUT presidential material.

      January 24, 2012 at 1:32 pm | Report abuse |
    • Randall

      Greg, you are dead wrong that companies do not pay taxes on dividends. I own a small business. Dividends are only available AFTER paying everything else (including taxes). So, I pay taxes on the money that will become a dividend if there is enough left after planning for next year's uncertainty. Many times, there is no dividend.

      January 24, 2012 at 1:46 pm | Report abuse |
  2. tstorm

    Romney's a spoiled rich kid who is bored and can't think of anything else to feed his ego but run for president...

    January 24, 2012 at 1:08 pm | Report abuse |
    • T-Bone

      AMEN!!!!!!!!!!!!!!

      January 24, 2012 at 1:22 pm | Report abuse |
  3. Jon

    Consider this. Romney's taxes show you a number of things about him, but it is far from what many people are saying. I am not a Romney fan, in fact I am very anti-republican/conservative robot, but he did not do anything wrong. He paid his taxes on the money his family made in accordance with our federal tax codes. I think the true message here is two part.
    Romney is in a class of earnings that makes him at once truly out of touch with the issues facing the regular people juxtaposed against his evinced (even if it is church donations going mostly to one group) desire to protect the vulnerable through charity. He can not possibly grasp how difficult it is for most of us to make ends meet and survive, but he has a desire to help. I don't like you Romney, but not for how much you make or don't pay in taxes.
    We, as a nation, are trapped in a cycle where the people who have massive amounts of money control the lives and destinies of the rest of us. If you are upset that the rich pay so little in taxes based on what they do with their money, change the tax code by popular vote. It is called a voter referendum. It is an evil phrase but think about it carefully. Flat Tax. No loopholes for where the money came from or what you did with it. You pays your money on what you earned and you takes what you gets.
    An example would be Mr. Romney. He earned 21 million. A flat tax of 15% would be a tax of 3.15 million. No loopholes or deductions allowed for anything. Then look at the guy who earns 35k. His tax is 5250. That is a serious piece of change for him, but at least he knows his fellows are paying the same amount. They both have 3 children, so Mr. 35k gets back a nice credit from Earned Income. Bumps his purchasing, and thus economy helping, power. Mr. Romney? Not a darn thing from EIC. He makes too much. Flat tax is balanced and fair as long as there are NO LOOPHOLES.
    Think about it. Everyone pays their fair share, the so called job creators (does anyone believe that malarkey) don't get to rob us with technicalities, and the 99% still have a reason to complain.
    I prefer, just so you know, a sliding scale flat tax. Poverty level pays no taxes, going up through degrees to 35% on the wealthy and 45% on the billionaires. If you do the math, we end up green, in fact, super green.

    January 24, 2012 at 1:09 pm | Report abuse |
    • JohnRJ08

      The issue is NOT whether or not Romney has violated the tax code. I don't think he has. However, the method of compensation he arranged while at Bain capital assured that his actual income from that company would NEVER be taxed. He was paid in stocks and those stocks were transferred to offshore accounts. Because the only money he actually receives is from the dividends those stocks generate, it is taxed at the low capital gains rate. The actual value of those stocks has never been taxed. This kind of blatant tax avoidance by a billionaire is exactly why the Buffet Rule must be enacted. Romney isn't a criminal, but he has been the recipient of the tax code's generosity to to the wealthy, and that tax code was written largely by wealthy lobbyists paid by people like Romney to preserve their wealth. It is a scam on the American people.

      January 24, 2012 at 1:38 pm | Report abuse |
    • JohnRJ08

      Your last paragraph saves your flat-tax idea. Unfortunately, as you describe it here, it would not provide the increase in revenue that the country is in dire need of right now. On top of that, we are in a fiscal emergency and changing the tax code would take years.

      January 24, 2012 at 1:41 pm | Report abuse |
  4. Patricksday

    Romney did give to Charity – The Mormon Church.

    January 24, 2012 at 1:09 pm | Report abuse |
    • AJ

      That's not a charity, it's a corporation!

      January 24, 2012 at 1:18 pm | Report abuse |
  5. Bubba™

    The wealthy 1% pay less then 15%

    🙂

    January 24, 2012 at 1:09 pm | Report abuse |
    • Randall

      And a far larger percentage (>40%) pay zero or less than zero

      January 24, 2012 at 1:49 pm | Report abuse |
    • Randall

      I meant to say a far larger percentage of America (a larger than those who are wealthy).

      January 24, 2012 at 1:51 pm | Report abuse |
  6. pam

    While I don't think I'd vote for him, because I don't think he could possibly understand the lives of average Americans, I think he paid the taxes that he was supposed to pay. It is 14% people, it isn't the 14 dollars you are making it out to be.

    January 24, 2012 at 1:14 pm | Report abuse |
  7. Guess What?

    If we had a flax tax on all income, we wouldn't need any debate on what effective tax rate is fair/unfair/legal/moral/patriotic/etc. Guess what the effective tax rate of a flat tax of X percent on all income is? Yes, you guessed it, X percent!

    January 24, 2012 at 1:14 pm | Report abuse |
    • nick

      With privlage of wealth comes responsibilities of fairness

      January 24, 2012 at 1:20 pm | Report abuse |
  8. mattfried

    What does a man, whose life has been one of privilege, who has been retired and "unemployed" for many years, know about the money problems of working people? He's learned how to keep earning gobs of money while not working. Yes, this is a skill, that perhaps he can teach the rest of us to do.
    I'd like to know why he needs $250 million (and rising) dollars. I'd like to know why his children need a $100 million dollar trust fund. I mean, after college tuition and maserattis, how much does one person need.

    January 24, 2012 at 1:14 pm | Report abuse |
    • AnthonyG

      Why does Romney want to be President? Does he need the job? For what reason? Can't he just be satisfies to manage his portfolio and enjoy his life? Why would he seek this office? It's all very strange if you ask me.

      January 24, 2012 at 1:31 pm | Report abuse |
  9. Working Hard

    My family and I live pretty much paycheck to paycheck. However, I would prefer to have someone in the White House that knows how to make money. At least they have some knowledge about how to get America profitable again and that benefits us all. Romney has a history of being successful and I have no reason to doubt that he would be successful as president too.

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

      You will have no reason to doubt his success until you go hungry.
      Mitt or Newt or even Barack will have no qualms dining at the table of plenty while you starve.
      Can't save everyone you know.
      If you are not a success in this country it is your own fault.

      January 24, 2012 at 1:23 pm | Report abuse |
    • Working Hard

      Citizen, I couldn't agree more. My success depends on me. That is why I do not hold it against Romney for being successful, good for him. If he can put some things in place that give me a better chance for success then great. I feel he has the knowledge to do that more than any of the other candidates, including Obama.

      January 24, 2012 at 1:30 pm | Report abuse |
  10. Patricksday

    Romney sure can give to charity though, to the Latter Day Saints aka Mormons. The Vatican of America.

    January 24, 2012 at 1:15 pm | Report abuse |
    • And??

      The Church of Jesus Christ of Latter-Day Saints has provided a total of $1.212 billion of humanitarian aid since 1985.

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

      7.5% of his charitable contributions went to charities OTHER than the Mormon church. That's $1.5 Million!!!! $3 Million in two years!!!! That ALONE outdoes most Hollywood Lefties who cry to help the poor! Why aren't we vilifying the likes of Congressman Rangle for EVADING his tax obligation! Isn't that morally worse?

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

    Romney may well be a one percenter, but the $263,000 in MONTHLY income taxes he paid last year well exceed the total lifetime income tax the average Occupy protester will ever pay. This doesn't make him any better or worse than the protesters, but it does make their protestations ring a little more hollow. While definitely among the 1%, the amount of taxes Romney paid last year quite likely surpass those paid by 99% of that 1%. Stop vilifying the rich. They pay for most of the government services.

    January 24, 2012 at 1:18 pm | Report abuse |
    • T-Bone

      The rich pay most of the govermnet programs..........idiotic statement....

      January 24, 2012 at 1:27 pm | Report abuse |
  12. somak

    Romney is not Romney because he worked hard all by himself. There is a "SYSTEM" in place, (named US Govt) that made it possible for Romney to work hard, get a good aducation and get ahead in life. I'm sure, if same Romney was born in Afganisthan, he would not be the same Romney he is today. All we are asking for, is him to pay his share so that the "SYSTEM" can be maintained and sustained for smart and hard working people of the future to get the same chance to get ahead in life. In everyone's life there is a contribution from the society. Also the SYSTEM is not his charities.. The SYSTEM that works for all is the US Govt.

    January 24, 2012 at 1:19 pm | Report abuse |
    • Jacob

      But he DID pay his share, according to the current system. It is not a problem with him, then, it is a problem with the system that goes back years. The whole discussion of him as a person is ridiculous. Have you ever paid more than the legally required amount in taxes? Do you itemize your return to reduce your tax load? How is that different from Romney, except that he makes a whole lot more money than you and me?

      January 24, 2012 at 1:53 pm | Report abuse |
  13. Bob

    The tax code is written by the rich or their representatives. Of course it favors them. Once a government has the authority to levy taxes and set wages you have what is called a planned political economy. The government decides how the national wealth shall be distributed. In this country, since we have no labor party, no workers party, no socialist party, no communist party, no liberal party and no green party, the rich get to decide how our wealth is decided. Everyone in this country should understand that. The poor and the working classes are not represented in Washington. They can't be. It takes millions of dollars to get a seat in government. That limits participation to those who are rich enough to run on their own money or those whose campaigns are sponsored by wealthy patrons. A member of the poor or middle class can't get to Washington without owing someone a lot of money, which translates to a lot of favors. And even one of the poor managed to get there and try to change things, he or she would be a minority of one. Until we change this system the poor will continue to get poorer and the rich will continue to get richer. If it goes on long enough the poor will revolt, as they have in other countries that were run by the rich for the rich. This is why every other democracy on the planet distributes their wealth more equitably, and why we have the highest poverty rate and worst health care of any western industrialized country. It's time for a change. At the very least we should stop voting for candidates that are super rich or blatantly favor the rich over the working man.

    January 24, 2012 at 1:20 pm | Report abuse |
  14. JBuch24651

    Romney lost my voite when he stated that the talk of growing income disparity between rich and poor was caused by envy. My company has a 125 million dollar credit line, expanding/gobbling up other businesses, our CFO got millions in bonuses, but the employees haven't had raises at all in four years. I think I have a right to be ticked off about the Romney's off the world. I work for Radnet, Inc., Howard Berger, C.E.0. As for job prospects in other companies, there aren't any.

    January 24, 2012 at 1:20 pm | Report abuse |
  15. whobeehe

    Mitt Romney is an opportunist. He worked the system and cashed in big time. Anybody who is angry at Mitt Romney should be mad at the system. Romney is smarter than the 99% and he played the game fair and square.

    Everyone should be thanking Mitt Romney for demonstrating how to make it big in America and flip off the 99% that make it all possible.

    January 24, 2012 at 1:22 pm | Report abuse |
    • citizen

      Exactly why no one should be surprised these candidates will say whatever it takes to get elected.
      By your reckoning they are fullfilling the American dream.

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