First Look at Romney's Tax Returns
The Romney Campaign has sent out a summary of the tax returns it will be releasing today.
Mr. Romney reported $21.7 million in income. He paid $3 million in federal taxes, slightly more than the $2.98 million he made in charitable donations. At least $1.5 million of his charitable donations went to the Mormon Church.
Of Mr. Romney's 2010 income, he noted a capital gain of $12.6 million, taxable interest of $3.3 million, ordinary dividends of $4.9 million and smaller sums of gains and losses on business income, refunds and other income.
His tax rate comes out to 14%. Why so low? The rate on investment income (15%) is lower than the rate for salaried income (35%.) Who is responsible for the big disparity?
That preferential rate for investment income, which was instituted as part of the Bush tax cuts to spur investment, is the basic reason why the Mr. Romney and his wife have an effective rate of around 15%.
His off-shore investments are not tax shelters. He pays the capital gains rate on those. He's worth between $84.8 million and $264.7 million. [More...]
He also keeps a lot of the money in tax-deferred individual retirement accounts (IRA's.) Income from IRA's isn't taxed until it's distributed. When he does withdraw it, it will be taxed at a higher ordinary income rate rather than the lower capital gains rate.
It's not a sophisticated tax scheme. It just happens to be how the tax rates are applied.
Romney is hardly the only wealthy Republican to run for President. Huntsman was worth between 15 and 66 million, and his father was a billionaire. But Republicans are probably dumb enough to think an ego-maniacal, delusional professional pol like Gingrich is better than an ultra-wealthy conservative who shares their values like Romney.
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