Thanks to a flat invesment tax rate, Republican candidate Mitt Romney paid 13.9% of his 2010 income in taxes. His income for that year weighed in at about $21.6 milion and he paid $3 milion in taxes. His estimated figures for 2011 have his income at $20.9 milion and a tax rate of 15.4%. His average weekly income is equal to the yearly income of those near the bottom of the top 1%.
Possibly acknowledging the contrast in income tax proportion, Romney has "gone pretty light on his deductions,” according to tax attorney Ken Breir. It seems that Romney does not want to bring any attention to his tax record.
Romney has paid $7.5 milion less in taxes for 2010 and 2011 than what he would have if President Obama's tax plans had been enacted. Paying $7.5 million more in taxes over two years would double his tax rate.
How should investments be taxed? Is it fair that the rich can pay a much lower proportion of their income in taxes?
Tuesday, January 24, 2012
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This subject is something Obama discussed in great detail in his State of the Union speech tonight. A big part of Obama's platform during his presidency has been to eliminate a lot of the income inequality between the wealthiest Americans and the middle class. Dubbed the "Buffet Rule," Obama's plan would require that Americans who make over one million dollars pay a tax rate of at least thirty percent. (Here is link that describes more of Obama's plans: http://www.huffingtonpost.com/2012/01/24/obama-state-of-the-union_n_1229720.html)
There are different viewpoints as to whether or not the rich should pay a lower proportion of their income in taxes. Many believe that by taxing the wealthiest Americans, the government can use the taxes from them to fund programs that help middle and lower-income earners. But others insist that there should be tax breaks for the wealthy, citing the trickle-down theory as their reasoning. The trickle-down theory maintains that more tax breaks for the wealthy will motivate the wealthy to invest in the economy and businesses that will ultimately benefit the poorer members of society.
It will be interesting in the coming months to see if members of both chambers of Congress heed Obama's call for increased taxes on the wealthy, especially given that Republicans generally oppose tax increases, and this year is an election year.
I was talking about this issue with my parents. Most of the money that Romney earns is capital gains which is not taxed as high. That is because it is taxed on both the company and the person. If you add extra tax, it would double tax people causing people not to want to invest. It would slow down the economy.
As ridiculous as Romney's income tax proportion is, I think that we should also remember that the men who typically run for the office of the President of the United States are rich men. In a different time, one with a better economy and without the intense focus on the unfairness of the "1%," people probably wouldn't care so much about Romney's finances. That being said, I think it is important that people understand just how unfair our tax system can be. I think that news coverage like this is the stepping stone to enacting much needed change.
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