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Romney's Tax Rate Lower Than Previously Thought

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There was a reason why, in 2008, Republican presidential nominee John McCain added Sarah Palin to his ticket. Or rather hundreds of millions of reasons. Initially gunning for Mitt Romney as vice president, the McCain campaign, during the vetting process, was treated to 23 years of Romney’s tax returns.

Right now, in the race for the highest office in the land, all the American people have been made privy to is a single tax return. And even though we only have 2010 to go on, it’s already worse than we thought.

When Romney was recently asked under pressure about his tax rate, the then-Republican frontrunner ventured a guess of 15%. That this vastly wealthy former private-equity executive, worth upwards of $250 million, didn’t pay the 35% top rate for ordinary income was already the scuttlebutt of the week. Now we know that while Romney earned $21.7 million in 2010, he falls into a lower tax bracket than those working for a $50,000 a year salary.

In 2010, Mitt Romney paid a 13.9% tax rate.

The key word here is “working.” Romney’s income was not earned through a job but capital gains and taxable interest.

Of the $42.5 million Romney made in 2010 and 2011 combined, he’ll pay $6.2 million in taxes. His rate on last year’s income is expected to rise to 15.4%. The full extent of his net assets is between $190 and $250 million, including an IRA worth between $20 and $101 million and a $10 million blind trust for his wife. His bank accounts have been strategically located in the US and throughout the world in tax shelters like the Cayman Islands, Luxembourg and Switzerland.

To Romney’s credit, he does want to continue paying some taxes on this income. In the GOP debate in Florida last night, Romney called out Newt Gingrich’s plan to wipe out the capital gains tax. “Under that plan, I’d have paid no taxes in the last two years,” Romney said.

However, Romney’s tax proposals are far from “fair” -- at least in the Occupy Wall Street sense of the word. If President, Romney would further cut the one percent’s taxes by an average of $164,000 per year. Meanwhile, Americans in the bottom 20% tax bracket would get $69.
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