Romney 2010 paid higher rate than 97% of taxpayers

[BDKJMU]

Fact Check: Is Romney's tax rate really lower than yours?

President Obama's campaign, with a good dose of help from the media, is pushing a claim that millionaire Mitt Romney is taxed at a "lower rate" than someone making $50,000 a year.

The claim, though, is open to debate. It only holds up in a particular scenario in which both income and all payroll taxes are counted.

The president's campaign presumably is referring to Romney's release last week of his 2011 tax returns, which showed he paid an effective tax rate of 14.1 percent.

This revelation, as might be expected, fueled a wave of campaign stump speeches and videos. The latest was an Obama Web video blasting Romney's "strange take on tax fairness." It included clips of people accusing Romney of paying a lower rate than "average" Americans. An accompanying campaign email said: "Mitt Romney admitted he thinks it's fair that his $20 million income was taxed at a lower rate than someone making $50,000."

IRS data, though, shows that Romney's effective income tax rate -- that's what he pays as a percentage of his income once deductions and other benefits are factored in -- is actually far higher than what most Americans pay.

And it's certainly higher than what someone making $50,000 pays.

IRS data from 2010 shows someone making between $50,000 and $75,000 on average pays an effective rate of 7.8 percent. Even someone making between $100,000 and $200,000 pays a 12.1 percent rate -- also lower than Romney's.

So what is the Obama campaign referring to? There are a couple possibilities.

The campaign likely is trying to make the point that Romney's income -- at least the huge chunk of it that is derived from investments -- is taxed at a 15 percent rate, while others who earn their money from a paycheck are taxed at marginal income rates going all the way up to 35 percent.

The latter percentage, though, comes down once deductions and exemptions are included. The Tax Foundation estimated in a report in January that Romney's rate in 2010 -- which was also about 14 percent -- was higher than what 97 percent of Americans pay.

The math works out better for the Obama campaign's claims if all payroll taxes are included in the formula.

Since Romney earns most his income from investments and not from a paycheck, he doesn't have to pay much toward Social Security and Medicare taxes. But if both the employee and employer share of those taxes are included, according to a Tax Policy Center chart, the middle tier of earners would be paying a 15.5 percent effective rate. (As pointed out in an earlier report by FactCheck.org.)

That would be slightly higher than Romney's rate.

The Obama campaign, asked about its latest Web video, told FoxNews.com "you can't ignore the payroll tax" considering how big of a hit that is for most middle-class families.

The Obama campaign also referred FoxNews.com to Romney's comments to CBS' "60 Minutes.

In the interview, Romney was asked by reporter Scott Pelley whether Romney's rate is "fair to the guy who makes $50,000 and paid a higher rate than you did?"

Without disputing that claim, Romney said it was fair and explained: "It is a low rate. And one of the reasons why the capital gains tax rate is lower is because capital has already been taxed once at the corporate level, as high as 35 percent."

The claim by Pelley, though, made certain assumptions without explaining them.

Obama used Pelley's phrasing to repeat the claim Monday on ABC's "The View."

"Yesterday Governor Romney on 60 Minutes said -- was asked does he think it is fair that he pays a lower tax rate than somebody that's making $50,000 a year, and he said yes," Obama said.

As the Media Research Center pointed out, an ABC reporter also claimed that Romney's 14.1 percent rate was "lower" than that of an auto mechanic making $75,000.

While Romney may or may not pay less than the average middle-class earner -- depending on how one defines middle class and how one defines tax rate -- one thing is clear: Romney does pay at a lower rate than the typical wealthy person.

IRS data for 2010 showed those making between $1 million and $10 million typically paid at an effective tax rate of more than 25 percent.

Fox News' Jim Angle contributed to this report.

Read more: http://www.foxnews.com/politics/2012/09 ... z27hzZjOeZ" onclick="window.open(this.href);return false;

[BDKJMU]

The the Obama campaign and lib media like ABC continue to tell the lie that Romney pays a lower rate than someone making 50k....

[AZGrizFan]

The the Obama campaign and lib media like ABC continue to tell the lie that Romney pays a lower rate than someone making 50k....

They're only lies if they come out of Romney's mouth.

[kalm]

Funny how conks never talk about the effective rate when it comes to comparing corporate taxes between countries.

[kalm]

If this is all accurate, one thing is for sure. Effective tax rates for the wealthy under Obama seem pretty damn low. I wonder how they stack up to other administrations or again, other countries.

[Bison Fan in NW MN]

Funny how conks never talk about the effective rate when it comes to comparing corporate taxes between countries.

Doesn't the US have the highest corporate tax rates in the industrial world?

[kalm]

Funny how conks never talk about the effective rate when it comes to comparing corporate taxes between countries.

Doesn't the US have the highest corporate tax rates in the industrial world?

"Effective" being the missing term in this discussion.

[Baldy]

Funny how conks never talk about the effective rate when it comes to comparing corporate taxes between countries.

Effective tax rate?

That is just a small piece of the puzzle. You need to include the compliance costs of having to conform to our tax laws, and the fact that the US is the only industrialized nation that requires its corporations (and citizens) to pay taxes on the income it earns overseas.

[danefan]

Funny how conks never talk about the effective rate when it comes to comparing corporate taxes between countries.

Effective tax rate?

That is just a small piece of the puzzle. You need to include the compliance costs of having to conform to our tax laws, and the fact that the US is the only industrialized nation that requires its corporations (and citizens) to pay taxes on the income it earns overseas.

There are a few countries that have an elective worldwide taxing structure along side a territorial regime. (UK for one example).

But Kalm isnt wrong on ETR. The effective rate of corporate tax in the US in most cases is much much lower than the statutory rate of 35%.

Compliance costs will never go away. No matter how you change the corporate tax code, companies will continue to pay guys like me to save them money. It's a good investment for them.

[kalm]

Funny how conks never talk about the effective rate when it comes to comparing corporate taxes between countries.

Effective tax rate?

That is just a small piece of the puzzle. You need to include the compliance costs of having to conform to our tax laws, and the fact that the US is the only industrialized nation that requires its corporations (and citizens) to pay taxes on the income it earns overseas.

You could be right and I would love nothing more than to simplify the tax code, remove the loopholes, fair tax, stuff that Romney is talking about. But do you realize how many lawyers and accountants would be standing in unemployment lines?

I'm guessing at the end of the day that regulatory costs with tax compliance included are similar in most OECD countries. Or are you suggesting the democratic socialists are more efficient in this?

[kalm]

BTW, my company is a small business, but our tax compliance costs are .38% of gross profits. Just sayin'.

[danefan]

BTW, my company is a small business, but our tax compliance costs are .38% of gross profits. Just sayin'.

Corporate tax costs are a very small issue in terms of direct impact and yet a huge political issue.

Does anyone know the % of corporate tax revenue in the US's overall annual tax revenue?

[D1B]

Baldy limps away, defeated. Again.

[kalm]

BTW, my company is a small business, but our tax compliance costs are .38% of gross profits. Just sayin'.

Corporate tax costs are a very small issue in terms of direct impact and yet a huge political issue.

Does anyone know the % of corporate tax revenue in the US's overall annual tax revenue?

No, but I remember reading somewhere that it's gone from a high of 40% in the 1960's to around 10% today.

[danefan]

Corporate tax costs are a very small issue in terms of direct impact and yet a huge political issue.

Does anyone know the % of corporate tax revenue in the US's overall annual tax revenue?

No, but I remember reading somewhere that it's gone from a high of 40% in the 1960's to around 10% today.

You're close....

[danefan]

Another thing - any time spend in the Presidential debates or campaign discussing corporate tax reform is time wasted on something more important.

Neither the President or Romney have enough political power to push their version of comprehensive tax reform through Congress.

And everyone in Congress believes that Tax Reform needs to be "revenue neutral" - meaning no one can justify changing the tax code if it adds to the deficit.

The current estimates from both sides of the aisle and the supposedly neutral parties are pretty consistent:

Every 1% reduction in the corporate tax rate will cost between $100-$120 BILLION.

There are only a few ways to pay for that - broaden the base of income subject to taxes or some alternative taxing structure such as a consumption tax.

The UK is in the process of moving to a Territorial tax system and lowering its rate all the way down to 22%. How are they paying for it? Increases to the national consumption tax system (VAT). That will never fly in the US.

So in other words - nothing is going to happen for a while unless something crazy happens in the Congressional elections in November and either party gets absolute power in Congress.

[Baldy]

Effective tax rate?

That is just a small piece of the puzzle. You need to include the compliance costs of having to conform to our tax laws, and the fact that the US is the only industrialized nation that requires its corporations (and citizens) to pay taxes on the income it earns overseas.

You could be right and I would love nothing more than to simplify the tax code, remove the loopholes, fair tax, stuff that Romney is talking about. But do you realize how many lawyers and accountants would be standing in unemployment lines?

I'm guessing at the end of the day that regulatory costs with tax compliance included are similar in most OECD countries. Or are you suggesting the democratic socialists are more efficient in this?

I would say that the democratic socialist countries are very efficient at it, but aside from Volvo, Ikea, and a now bankrupt Nokia there really aren't many large multinational corporations headquartered out of those countries, either.

[Baldy]

Baldy limps away, defeated. Again.

Not to worry D. When the time comes and I really start to get my ass kicked on a daily basis, I'll start planning my retirement party, too.

[D1B]

You could be right and I would love nothing more than to simplify the tax code, remove the loopholes, fair tax, stuff that Romney is talking about. But do you realize how many lawyers and accountants would be standing in unemployment lines?

I'm guessing at the end of the day that regulatory costs with tax compliance included are similar in most OECD countries. Or are you suggesting the democratic socialists are more efficient in this?

I would say that the democratic socialist countries are very efficient at it, but aside from Volvo, Ikea, and a now bankrupt Nokia there really aren't many large multinational corporations headquartered out of those countries, either.

[Baldy]

Effective tax rate?

That is just a small piece of the puzzle. You need to include the compliance costs of having to conform to our tax laws, and the fact that the US is the only industrialized nation that requires its corporations (and citizens) to pay taxes on the income it earns overseas.

There are a few countries that have an elective worldwide taxing structure along side a territorial regime. (UK for one example).

But Kalm isnt wrong on ETR. The effective rate of corporate tax in the US in most cases is much much lower than the statutory rate of 35%.

Compliance costs will never go away. No matter how you change the corporate tax code, companies will continue to pay guys like me to save them money. It's a good investment for them.

It's not just the costs in dollars, it's the cost in total man hours directed towards tax compliance instead of product development, customer service, research, etc.

[D1B]

There are a few countries that have an elective worldwide taxing structure along side a territorial regime. (UK for one example).

But Kalm isnt wrong on ETR. The effective rate of corporate tax in the US in most cases is much much lower than the statutory rate of 35%.

Compliance costs will never go away. No matter how you change the corporate tax code, companies will continue to pay guys like me to save them money. It's a good investment for them.

It's not just the costs in dollars, it's the cost in total man hours directed towards tax compliance instead of product development, customer service, research, etc.

[D1B]

Baldy limps away, defeated. Again.

Not to worry D. When the time comes and I really start to get my ass kicked on a daily basis, I'll start planning my retirement party, too.

Forced into retirement due to threats from Ursus to kill my cats. Try following along, for once.

[blueballs]

Isn't it just amazing how the "lame stream" media is more worried about what Romney does with his own money than what Obama has done with ours?????

SMFH at the ignorance...

[D1B]

Isn't it just amazing how the "lame stream" media is more worried about what Romney does with his own money than what Obama has done with ours?????

SMFH at the ignorance...

Look at the polls. EVERYONE is concerned what a Wall Street dork like Romney would do as President. How in the fuck did you forget that people like Romney ruined us for 10-15 years? Amazing.

In this clip, Romney mentioned that it would routinely take up to eight years to turn around a firm—though he now slams the president for failing to revive the entire US economy in half that time.

From one of many Romney video clips.

[GannonFan]

Effective tax rate?

That is just a small piece of the puzzle. You need to include the compliance costs of having to conform to our tax laws, and the fact that the US is the only industrialized nation that requires its corporations (and citizens) to pay taxes on the income it earns overseas.

You could be right and I would love nothing more than to simplify the tax code, remove the loopholes, fair tax, stuff that Romney is talking about. But do you realize how many lawyers and accountants would be standing in unemployment lines?

I'm guessing at the end of the day that regulatory costs with tax compliance included are similar in most OECD countries. Or are you suggesting the democratic socialists are more efficient in this?

Of course you are just guessing. I mean, how else to explain why many companies choose to pay taxes in countries other than the US. I'm sure they are looking at the effective tax rate as well, and most come to the conclusion that the effective corporate tax rate here is still higher than the effective corporate tax rate where they are paying their taxes. So we can argue over whether we should talk about the nominal corporate tax rate or the effective one, but that just ignores the reality that both are higher than those taxes are in most places throughout the world and that's where those tax dollars tend to go. We're like an ostrich sticking their head in the sand on this issue and it doesn't seem to be helping the situation.