Romney taxes: Critics rip loopholes, lack of Social Security help
Left-leaning tax experts reviewing Mitt Romney’s just-released returns Tuesday highlighted apparent savings Romney received from tax “loopholes” and deductions available to the very rich. During a morning tele-conference, economists at the Center for American Progress said Romney’s returns highlight advantages the very wealthy receive today and the further benefits they would receive if Romney became president and enacted the tax plan he has proposed.
“He would place even greater tax burden on middle-class families,” said Michael Linden, director of tax and budget policy at CAP.
Romney saved more than $5.6 million thanks to tax cuts introduced by President George W. Bush and a loophole for carried interest that benefits partners in private equity firms and hedge funds, according to the analysis released Tuesday morning by CAP. The carried interest provisions allowed Romney to save $2.6 million, while the Bush tax cuts enabled a savings of $3 million, said Seth Hanlon, director of fiscal policy for the organization.
The organization also noted that “Romney’s returns reveal that he paid an effective tax rate of 13.9% . . . far less than what many middle-class Americans pay. It’s also well below what wealthy people pay. The average effective tax rate for someone in Romney’s income bracket is 25%.
The Tuesday morning CAP news conference also emphasized that Romney paid almost nothing in payroll taxes, contributing just 0.1% of his income to Social Security and Medicare in 2010 via the payroll tax because the tax is assessed only on earned wages, but all of Romney’s income came from investments. Most working Americans pay 7.65%.
In addition, CAP researchers claimed that Romney makes more in a day than the average American makes in a year, and becomes a 1 percenter every week. “He is a poster child for the ‘Buffett rule,’” said one organization staffer, a reference to the phrase adopted by President Obama as he sells his proposal to seek more tax revenues from the wealthy.
The rule refers to billionaire investor Warren Buffett, who has complained that he and other very wealthy Americans pay a small share of their income in federal taxes than average middle-class workers, including his secretary.
The Romney campaign did not immediately respond to a request for comment Tuesday. However, on Monday evening, spokeswoman Andrea Saul said that the returns show that “Gov. Romney pays millions in taxes each year, that he gives millions in charitable contributions and that his investments are reported and taxed in full compliance with U.S. tax law. Gov. Romney has paid 100% of what he has owed.”
tom.hamburger@latimes.com
