Oh my God! The entire Internet seems to be going crazy today after Mitt Romney admitted to something that we all already know: That he pays less in taxes than most middle class families.
Well, to be clear, not that he pays less in taxes overall. Don't be ridiculous, you silly commoner. I mean, even one percent of his annual income is more than most of you make in five years.
"What’s the effective rate I’ve been paying? It's probably closer to the 15 percent rate than anything, because my last ten years, I’ve, my income comes overwhelmingly from investments made in the past, rather than ordinary income, rather than earned annual income."
Citizens for Tax Justice estimates his tax rate at around 14 percent. But, hey, that's "closer to the 15 percent rate" than it is to, say, three percent.
As Center for American Progress Director of Fiscal Reform Seth Hanlon has explained, the latest data shows that "many middle-class families paid much more [in taxes] than the 17.5 percent average paid by the very rich." When President Obama suggested the "Buffett rule," aimed at ensuring that millionaires can’t pay lower taxes than middle class families, Romney derided it as "class warfare," and "the wrong way to go."
One of the reasons Romney is able to drive his tax rate down so low is that he is still earning money from his private equity firm, Bain Capital, that is likely subject to a pernicious tax loophole. This loophole lets wealthy money managers like Romney pay the capital gains tax rate on profits they make investing other people’s money, turning the justification for having a lower capital gains tax rate completely on its head.
You see, the reason why he gets to pay less in taxes is because so much of his income is coming from past investments. And the reason why he has so many past investments is because he had all that money just lying around the office. And he gets to keep all those piles of money because his tax rate is so low.
Now, you don't get that tax rate because you never thought to invest millions of dollars into a portfolio of companies. If you had, you'd be paying the same low tax rate as him.
So, stop complaining!
Tags: Bain Capital, Mitt Romney, Money, Primaries, Republicans, Taxes