I’m getting ready soon to figure out and file our income tax return for 2011. I just found out that we will be paying a higher percentage of our retirement income in taxes than Willard “Mitt” Romney, who is also “retired.”
In Greenville SC Willard was asked pointedly what his effective tax rate is. Since he was beaten up pretty badly in the latest of the GOP primary debates for refusing to release his tax returns, Romney finally ‘fessed up. “”It’s probably closer to the 15 percent rate than anything. For the past 10 years, my income comes overwhelmingly from investments made in the past, rather than ordinary income or earned annual income…Then, I get speakers fees from time to time, but not very much.”
Not very much from speakers fees? USA Today reported that in one recent year, Willard earned more than $362,000 from speakers fees. Only a guy worth $250 million could think that wasn’t “very much.”
Romney is able to pay the same tax rate as someone earning between $8,700 and $35,350 because he takes advantage of a tax loophole that taxes long-term capital gains at 15%, regardless of how high those gains are. Plus, if any of the investments made to produce those capital gains end up as losses, the investors can count the losses against any money earned. This is the loophole that allows hedge fund managers and private capital investors to avoid taxes by being paid with “capital gains” rather then having a salary.
We sure know now why Romney didn’t want his tax returns released. After all, he’s the guy who joked with unemployed people last summer in Florida, saying, “I’m also unemployed.” He sure has mighty good unemployment benefits.
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