When Republican presidential nominee Mitt Romney finally released his second year’s worth of tax returns, there was an uproar over the fact that Mr. Romney paid just a fourteen percent federal income tax rate, much lower than most working Americans all the while earning $13.7 million and paying $1.9 million in federal tax for the year ended 2011. What was somewhat interesting was that Romney claimed a charitable deduction of only $2.25 million despite actually donating more than $4 million. For what reason could Romney possibly have for not taking the entire charitable contribution? The only possible explanation was if he had taken the total $4 million deduction, his effective tax rate would have been an astounding nine percent. It is for this very reason why George W. Romney, Mitt’s father, stated during his unsuccessful 1968 presidential campaign that he was releasing twelve years worth of tax returns because one or two years could be an abnormality.
I forget which candidate stated not long ago that “I don’t pay more than legally due and frankly if I had paid more than are legally due I don’t think I’d be qualified to become president. I’d think people would want me to follow the law and pay only what the tax code requires.” Oh yeah, it was Mitt Romney. By his own standards, Mitt Romney is unqualified to be the president of the United States. I guess he changed his mind on this issue too. In a sadly ironic twist to his 2011 tax return, Mr. Romney could still deduct the entire charitable contribution by amending his taxes during the next three years. It would not surprise me one bit if Mr. Romney has already filed an amended return for calendar year 2011, claiming the entire $4 million charitable deduction.
However, compounding the injustice concerning Mr. Romney’s lack of paying his fair share of taxes, is that by claiming his entire $13.7 million as capital gains, he is legally obligated to pay absolutely no social security tax, which is currently 7.65% of one’s income (6.2% FICA tax and 1.45% Medicare tax), thus greatly reducing his real effective federal tax. Why should Mr. Romney pay a payroll tax when, in his own words he is “unemployed?” It is because his fellow barons and titans of Wall Street report their working earnings as capital gains as well, thus avoiding a tax that the working class is compelled to pay in addition to paying an income tax rate far less than most working men and women. Not only do these millionaires avoid paying their fair share of income tax, but their corporations also avoid paying the employer share of the payroll tax as well, costing the U.S. treasury who knows how much in greatly needed revenue. I guess the golden rule is indeed true, he who has the gold, makes the rules!
Steven H. Spring