Wealthy Romney reveals 14% taxes

 
Mitt Romney speaks with the media on 23 January 2012 in Tampa, Florida Mitt Romney's tax returns arrived on the same day Obama makes a major speech - on inequality

Mitt Romney pays a lot more than most Americans in tax, but he also pays proportionally a lot less.

He paid more than $6m (£3.8m) over two years at a rate of just under 14%. The average American pays around 11% tax, but the top rate is 35%.

What all this underlines is that Mitt Romney is very, very rich, earning more than $45m dollars in the last two years.

I suspect how people will see the bald facts will divide fairly neatly along party lines, at least at first.

But it underlines a damaging perception that could hurt him in a presidential election if he does end up as the Republican candidate.

Return to tax policy

First off, the good news for Mr Romney: he's squeaky clean. There is no suggestion of anything dodgy going on. As he points out, no one pays more tax than they owe.

The reason Mr Romney pays a lower rate than, say, President Obama (26%) or Newt Gingrich (over 30%) is because there's a different tax rate for income and investments.

That raises a much wider argument, and one that will be central to the election in November. It is precisely why the billionaire investor Warren Buffet said the tax rate was unfair and should be changed because he paid a smaller proportion of his income than his secretary.

Mr Obama has taken up that call with enthusiasm, even naming his proposed rule after Mr Buffet.

It plays in to a national debate on wealth and fairness that could be critical to Mr Obama's re-election or defeat. The president will make the idea of a fairer society, where the rich do more to help the struggling middle classes, a centrepiece of his State of the Union speech tonight.

We are told the themes will be similar to a speech a few months ago in Kansas, where he attacked opponents of any tax rise.

"Their philosophy is simple: we are better off when everyone is left to fend for themselves and play by their own rules," Mr Obama said.

"Well, I'm here to say they are wrong. I'm here to re-affirm my deep conviction that we are greater together than we are on our own.

I believe that this country succeeds when everyone gets a fair shot, when everyone does their fair share, and when everyone plays by the same rules."

Romney's tin ear?

Mr Obama hopes, at a time when many Americans are suffering economically, they will see this as "fairness" not "class war".

But attacks on the rich have never worked very well in America. He must hope that there is an underlying sense of resentment.

Mitt Romney and Newt Gingrich take part in a Republican debate in Tampa, Florida 23 January 2012 Mitt Romney and Newt Gingrich are battling for Florida after Mr Gingrich won South Carolina

I am simply not sure whether the public mood has changed or not. It is something I hope to look at when I go to Florida.

On the surface this should not make much impact on the Republican race. After all, the party admires wealth-creators and success and thinks taxation should be much lower.

It is an irony that under Mr Gingrich's tax plan Mr Romney would pay almost nothing.

But Newt and the others raised his tax returns for a reason. Mitt has an uncanny knack of making statements that suggest he's so wealthy that he doesn't think the same way as the rest of us.

He chortles that he forced Ted Kennedy to take out a second mortgage to run an election campaign against him. He wagered an imaginary $10,000 when most of us would have flourished a fictional hundred.

Republican voters may love multi-millionaires and lionise the very wealthy, but they don't like elites and patricians. Neither do the people who voted for them in the mid-term elections.

At the moment they don't much like bankers on Wall Street. They like their rich folk to behave as though they're are just ordinary Joes at heart.

Both Mr Obama and Newt want to paint Mr Romney as dangerous and out of touch with the mood of America. That's what's taxing Mitt.

Presidents' incomes comparison
 
Mark Mardell Article written by Mark Mardell Mark Mardell North America editor

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  • rate this
    +6

    Comment number 20.

    Clarkson what are arguing about like an annoying mosquito buzzing in my ear

    Cheney's Governments Contracts went to Cheney's Halliburton is 1 example of preferential dealing

    Can you provide examples of Obama directly pocketing money through Gov business contracts

    or getting tax breaks on his own tax laws that he passed or proposed

    did Obama work behind the scenes for CGT exemptions extensions

  • rate this
    -2

    Comment number 19.

    #13 "Rich politicians are greedy"

    Really? BO is a millionaire. Is he greedy?

    "like rich business men and corps"

    See above.

    "and are accountable for government contracts"

    Are you saying that BO is accountable to government contracts? You might be right, he does give them to the unions. You know, fixing roads and things, bailing out GM, etc...

  • rate this
    +1

    Comment number 18.

    Romney appears to buy and sell companies instead of share holdings, presumably he would stop this if President due to conflicts of interest

  • rate this
    +2

    Comment number 17.

    #9 "It might be different if Romney was associated with investment banking, but he's not."


    But he may be backed by investment banking if you take it under the general umbrella of "Wall Street" backing.

    http://www.bbc.co.uk/news/uk-politics-15919935


    Romney is heavily backed by Wall Street and not very much liked by the Tea Party. Newt, seems to be the opposite of that.

  • Comment number 16.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    -3

    Comment number 15.

    Mitt Romney is very rich: Does it matter?

    I`d say by owning your own money,one may be less tempted to be bought than if you had none.

  • rate this
    +1

    Comment number 14.

    @5.Doctor Red,
    Thank you for the info.

  • Comment number 13.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +14

    Comment number 12.

    Normally wealth isn't usually a factor.Often you can't buy an election as Nelson Rockerfeller found out.This time Romney pinned as a multimillionaire out to protect interests of millionaires and billionaires at the expense of everyone else it could be a liability.All the Republicans favor continuing the Bush tax cuts for the wealthy.Not an asset at a time when most others have financial trouble

  • rate this
    +14

    Comment number 11.

    It is funny how the right wing moan about those 'liberal elitists' who are 'out-of-touch' with ordinary Americans; yet when it comes to the Real Elite - the economic elite - they are fine and know exactly what normal Americans think. Hypocrites are worthless human beings who can never say the same thing about the same thing, and liars always have to overcome contradictions in their arguments.

  • rate this
    +8

    Comment number 10.

    Mark hits the issue spot on. It's not Mitt's money, but his tin ear that matters. He constantly comes across as an elitist, out of touch with average Americans.

    The tax issue is a separate point Obama will use in his "Fairness" campaign. That's where this will bite the Republicans, especially after the Payroll Tax Cut fiasco in the House.

  • rate this
    -7

    Comment number 9.

    "Mitt Romney is very rich: Does it matter?"

    No, I don't think so. To paraphrase the President, "Amercans don't hate the rich. They want to be rich."

    It might be different if Romney was associated with investment banking, but he's not.

  • rate this
    +1

    Comment number 8.

    The wealth of the candidates never mattered. If anything, it should be seen as a positive attribute by those who constantly suspect that politicians are in politics to enrich themselves. That suspicion may be warranted for politicians who are NOT rich already. The rich ones are no longer driven by money, but rather by power, the ultimate aphrodisiac of the rich.

  • rate this
    +6

    Comment number 7.

    10% Gross Income given to the Mormen Church is compulsory
    even though it shouldn't be

    I'm still skeptical about his share dealings and would like to review Romney's portfolio statements to run a quick check

    It's strange (or typical) that GOP fights in Congress was to keep this very tax loop hole open to :- 'help the economy'
    GWB capital gains tax
    GOP couldn't be more transparently self serving

  • rate this
    +14

    Comment number 6.

    He is part of the real Elite that wants more tax cuts for the rich at the expense of the 99%. He knows nothing of what the average American is going through. He wants them to work harder, longer, and for less.

    He and his ilk are fooling you all. Wake up America!

  • rate this
    +6

    Comment number 5.

    Both Romney and Obama gave away about 14% of their income to charity.

  • rate this
    -4

    Comment number 4.

    The article is misleading. The article is not about tax as a whole. The article is solely concerned with federal income tax. The amount people in america pay in tax (sales tax, property tax, inheritance tax....) in total is much higher than the 11% quoted in the article and Mitt Romney owns several large properties so his state and federal tax bill is significantly higher than the percentage given

  • rate this
    +17

    Comment number 3.

    That Romney is rich is not the problem. FDR and the Kennedys were rich, John Kerry is rich, there are a lot of wealthy people in American politics. Few of our elected leaders are in Washington because they need the money the job pays. It's how he earned his money and the perception he cares more about millionares than the middle class that hurts him.

  • rate this
    -4

    Comment number 2.

    If the fact that Romney is wealthy matters, it's in a good way. It demonstrates that he has a number of important skills that might serve the country well. (Look where having a -failed- businessman as President got us.)

    How he became wealthy though, is another story. Companies of the Bain ilk, with rare exceptions, are a net drag on a productive economy.
    They create paper wealth, nothing more.

  • rate this
    -19

    Comment number 1.

    There is nothing wrong with being wealthy & Mr. Romney gives away 10% to church & charity. What percent does Pres. Obama give? Or the other candidates?

 

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