OPINION: Mitt’s 13% Tax

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By Robert Reich

(This article originally appeared in Robert Reich’s blog on Aug. 17, 2012)

Mitt Romney says “every year I’ve paid at least 13 percent [of my income in taxes] and if you add in addition the amount that goes to charity, why the number gets well above 20 percent.”

This is supposed to be in defense of not releasing his tax returns.

Assume, for the sake of the argument, he’s telling the truth.Since when are charitable contributions added to income taxes when judging whether someone has paid his fair share?

More to the point, Romney admits to an income of over $20 million a year for the last several decades. Which makes his 13 percent — or even 20 percent — violate the principle of equal sacrifice that lies at the core of our notion of tax fairness.

Even Adam Smith, the 18th century guru of free-market conservatives, saw the wisdom of a graduated tax embodying the principle of equal sacrifice. “The rich should contribute to the public expense,” he wrote, “not only in proportion to their revenue, but something more in proportion.”

Equal sacrifice means that in paying taxes people ought to feel about the same degree of pain regardless of whether they’re wealthy or poor. Logically, this means someone earning $20 million a year should pay a much larger proportion of his income in taxes than someone earning $200,000, who in turn should pay a larger proportion than someone earning $50,000.

But Romney’s alleged 13 percent tax rate is lower than that of most middle class Americans who earn a tiny fraction of what he earns.

At a time when poverty is increasing, when public parks and public libraries are being closed and when public schools are shrinking their offerings and their hours, when the nation’s debt is immense, and when the 400 richest Americans have more wealth than the bottom 150 million of us put together — Romney’s 13 percent is shameful.

Robert B. Reich, Chancellor’s Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including the best sellers “Aftershock” and “The Work of Nations.” His latest is an e-book, “Beyond Outrage.” He is also a founding editor of the American Prospect magazine and chairman of Common Cause.


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2 comments for “OPINION: Mitt’s 13% Tax

  1. SMMcMahon
    August 21, 2012 at 2:57 pm

    This guy said it all:

    “Mitt Romney does not need to release any more income tax returns. The 2010 return that he did release clearly shows what he has in mind, if he and Paul Ryan have their way.

    Romney and Ryan both want to drop the tax rate on interest, dividends and capital gains to zero. They have said this repeatedly. I am not an expert on taxes, far from it, but let’s look at just a few items from Mitt’s 2010 tax return: $3.3 million in interest, $5 million in dividends and $12.5 million in capital gains. Gee, how about that? All taxed at 15 percent. $.5 million ordinary income from speaking fees, probably taxed at the 35 percent level. His charitable giving was $1.5 million in cash and $1.5 million in non-cash. His taxable rate is said to be 13.9 percent for this year. IF MR. ROMNEY and Mr. RYAN THEIR WISH, MR. ROMNEY WOULD HAVE A TAX RATE OF LESS THAN 1%.

    Would you trust someone to run this country, a person that uses every means possible to avoid paying taxes to the Federal and state governments, has numerous off-shore accounts and will not release even 5 years of his tax returns? Who has said many times, in so many words, that he wanted to drop the tax rates to zero on 95 percent of his income, should he become president and has lied about his tax returns before, while running for governor? And took a $77 thousand business deduction for his wife’s dancing horse?

    Or would you want a person that has released 12 years of tax returns, wants to raise very slightly the top marginal tax rate for the very wealthiest people and leave the tax rate the same for 95 percent of the taxpayers? Is that really a tough question?

    Not for me. I am voting for Barack Obama, a man of the people, by the people and for the people.”

    DAVID M. JUSTICE

    • SMMcMahon
      August 21, 2012 at 2:57 pm

      Romney/Ryan “mean it” when it comes to eviscerating government as a tool to help the middle class and improve society:

      They would end Medicare and replace it with inadequate vouchers, thereby causing recipients to pay $6,000 – $13,000 more per year. They would raise taxes on the middle class by up to $2,000 per year — and destroy the government’s ability to invest in infrastructure, education, and other necessary things.

      But when it comes to reducing the deficit, they are as much if not more of a fraud as virtually every other conservative for the past thirty years. The “savings” from all of Romney/Ryan’s proposed cuts and tax increases wouldn’t go to reducing the deficit. Instead, they would go to increasing military spending, and to $4.3 trillion in tax giveaways to millionaires and billionaires. Under Ryan’s plan, Romney would have paid less than 1% in taxes in 2010.

      As for the national debt, Ryan’s proposal would lead to an increase in the national debt from its 2010 level of 60% of GDP to a peak of nearly 175% by 2050 and remain at 100% or more of GDP through 2080.

      In short, Paul Ryan and Mitt Romney aren’t offering a serious conversation about deficits. Instead, they are offering the GOP agenda of taking from the middle class to give to the wealthy on steroids.

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