News Flash: Mitt Romney is Rich
Facing mounting criticism, Republican presidential candidate Mitt Romney released his 2010 and 2011 estimated tax returns today. In summary, the tax returns of Mitt Romney show that Mitt Romney makes a lot of money, he gives a lot to charity, and he pays a lot of money (in terms of dollars) in taxes.
According to the documents released, Mitt Romney made $21.7 million in 2010 and $20.9 million in 2011 for a total of $42.6 over two years. The majority of money that Romney earned was in the form of capital gains, dividends, and interest from investments.
Romney paid $3 million in taxes in 2010 or roughly 13.8%. The 2011 Romney estimated tax return indicates that Romney will $3.23 million on $20.9 million of income or roughly 15.5%.
The Romney tax returns also indicate that he gave away $2.98 million in charity in 2010 and $4 million in 2011 or over 16% of his total income over the last 2 years. The average $3.5 million in charitable contributions is in stark contrast to the 2008 release of documents that indicated that Joe Biden gave an average of $369 to charity per year over 10 years. Note that there is not a missing “thousand” or “million” after that $369.
The DNC and the President along with their alies in the media will attempt to paint Mitt Romney as a greedy person in the 1% that pays a lower tax rate than the working middle class. However, that attack rings somewhat hollow. According the Tax Foundation, the effective tax rate for those in the between the top 25% and the bottom 50% has been below 10% since 1987. It is important to note that effective tax rate is not a tax payers top bracket, but the total amount of income tax paid after all deductions and adjustments to income.
You can estimate your effective tax rate by the numbers on your current W2 and compare it to Mitt Romney. Take your income tax withheld (box2) and divide it by your Wages tips and other (box1). To be more accurate, take your box 2 and subtract last years refund (or add payment) prior to dividing assuming no major changes from the prior year. To calculate your true effective tax rate, take your total tax due on your tax return (what you should have paid based upon your AGI) and divide it by your total income before deductions.