On Thursday in South Carolina, Romney took the bait of a reporter’s question to talk about his taxes, certainly against the fervent wishes of Republicans, who would love to see the issue firmly tabled. “Over the past 10 years, I never paid less than 13%,” he said. “I think the most recent year is 13.6 or something like that. … And if you add, in addition, the amount that goes to charity, why the number gets well above 20%.”
That latest gambit seems to be the onetime private equity tycoon’s way of saying: “Gosh guys, I pay a lot lower tax rate than many secretaries, but I sure am a generous fella in other ways.”
And, indeed, he is.
Since Romney, in essence, called for a new way of calculating monetary contributions to the public good, Politics Now will take him up on that initiative. Here, then, is the Fully Uncertified Tax-N-Charity Index for both Romney and his opponent, President Obama.
Romney and his wife, Ann, paid $3 million in federal taxes in 2010 on nearly $21.7 million in income, gains derived mostly from capital gains and dividends. That is an effective tax rate of 13.9%, far lower than the top marginal tax rate of 35% on wages and salaries. The Romneys plan to release their 2011 return when it's finalized. They projected it would show taxes of $3.2 million on $20.9 million in income, an effective tax rate of 15.4%. That’s a total of $42.6 million in income for two years and $6.2 million in taxes, or a 14.5% rate over two years.
Over that same time period, though, the Romneys paid even more money to charity — a total of $7 million. The biggest beneficiary was the Church of Jesus Christ of Latter-day Saints, which got more than $4 million. A nonprofit group controlled by the couple gave additional money to the Mormon church and to other charities, such as the Boys and Girls Clubs of Boston and the George W. Bush Presidential Library. So the Romney’s total Tax-N-Charity payments over two years are projected at $13.2 million. That amounts to 31% of their income.
Obama and wife Michelle also gave more to charity than they paid in federal taxes in the 2011 tax year. The numbers: on income of $789,674, the Obamas paid just over $162,000, a tax rate of 20.5%. They gave $172,130 to various charities, including the Fisher House Foundation, which provides support to military families. The Obama’s Tax-N-Charity payments came to $334,000 or 42% of their income.
A few things can be concluded from the Tax-N-Charity calculations. Both the Romneys (giving away more than 16% of their income to charity) and the Obamas (22% of income to charity) are remarkably generous. Both families make considerably more than average Americans (whose charitable donations typically fall in the 2%-to-4% range) and they act like it with their philanthropy.