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Is Romney's effective tax rate lower than yours? (80% of ALL Americans pay less than 15%)
cnn ^ | 1/19/2012 | Jeanne Sahadi

Posted on 01/24/2012 9:24:01 AM PST by tobyhill

So Mitt Romney thinks his effective tax rate is about 15%.

That prompts many people to express disbelief: "What?! Most people pay a higher rate than that, don't they?"

,,,,

But assuming he's correct, here's why his effective rate is probably higher than most people's: The effective tax rate is always going to be lower than one's top income tax rate. And the top rate for roughly four-fifths of Americans is 15% or less, said Roberton Williams, a senior fellow at the Tax Policy Center.

In other words, 80% of Americans have an effective rate below 15%.

(Excerpt) Read more at money.cnn.com ...


TOPICS: Extended News; News/Current Events
KEYWORDS: income; tax; taxes; taxrates

1 posted on 01/24/2012 9:24:09 AM PST by tobyhill
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To: tobyhill

Flat Tax and be done with it. No loop holes, we all pay the same, and the country is better for it.


2 posted on 01/24/2012 9:26:15 AM PST by Sax
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To: Sax
Exactly and then those making ANY amount would pay their “fair share”.
3 posted on 01/24/2012 9:28:18 AM PST by tobyhill (Obama, The Biggest Thief In American History)
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To: tobyhill

Hey CNN, the Obama administration runs guns to Mexico resulting in the death of Americans, and the big question you have is: How much does Mitt Romney pay in taxes?

Personally, I don’t give a s**t what Mitt Romney, or anyone else, pays in taxes.


4 posted on 01/24/2012 9:28:55 AM PST by Signalman
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To: tobyhill

It’s nice to see someone in the MSM considering the facts for a change. You can be sure that the Donk talking points will be fact free.


5 posted on 01/24/2012 9:30:44 AM PST by RightGeek (FUBO and the donkey you rode in on)
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To: Sax

Agreed. I’m tired of the tax code being used as an instrument of social engineering.


6 posted on 01/24/2012 9:33:06 AM PST by Utmost Certainty (Our Enemy, the State | Gingrich 2012)
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To: Signalman
Since it's going to be the main theme for Obama tonight I felt it's appropriate to remind everyone that he's not talking to the actual Middle-Class, he's talking about taking from everyone that pays taxes and giving it to those that pay 0%.
7 posted on 01/24/2012 9:33:29 AM PST by tobyhill (Obama, The Biggest Thief In American History)
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To: tobyhill

“Effective tax rate” my butt! This refers only to federal INCOME taxes and does not include the FICA/Social Security swindle, excise taxes, sales taxes, state and local taxes, death taxes and the myriad other death-by-a-thousand-taxes that makes up life in America under the existing kakistocracy.


8 posted on 01/24/2012 9:33:39 AM PST by Cincinatus (Omnia relinquit servare Rempublicam)
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To: tobyhill

I’m one of the “lucky” 20%.

Talk about 99%’ers. I think the 20%’ers are the ones with a legitimate gripe in this country!


9 posted on 01/24/2012 9:35:16 AM PST by brownsfan (Aldous Huxley and Mike Judge were right.)
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To: tobyhill

I made $100 K last year. I have a wife, three kids, and a mortgage. My effective federal income tax rate without any contortions was 7.9%. I think I pay more in Social Security and Medicare taxes.


10 posted on 01/24/2012 9:35:55 AM PST by USNBandit (sarcasm engaged at all times)
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To: Cincinatus

80% of Americans pay more in FICA taxes than income taxes. 47% pay no income taxes. 26 million actually receive EITC, which means they get money back from the federal government.


11 posted on 01/24/2012 9:39:20 AM PST by kabar
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To: brownsfan
The real Middle-Class better quit falling for this scam about “fair share” because they are always the ones to foot the bill. The “1%” will find legal ways to lower their tax rates and the “poor” will never pay a tax so that leaves only one group to pay, the Middle-Class and Obama knows it.
12 posted on 01/24/2012 9:45:50 AM PST by tobyhill (Obama, The Biggest Thief In American History)
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To: Signalman
Hey CNN, the Obama administration runs guns to Mexico resulting in the death of Americans, and the big question you have is: How much does Mitt Romney pay in taxes?

I would have loved to see Newt Gingrich ask something similar to Brian Williams last night. "You're asking about putting men on Mars and sugar, but what about the federal government selling weapons to drug cartels? What about the important issues?"
13 posted on 01/24/2012 9:46:27 AM PST by LostInBayport (When there are more people riding in the cart than there are pulling it, the cart stops moving...)
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To: tobyhill

I’m out 35% !


14 posted on 01/24/2012 9:51:50 AM PST by Reagan69 (I supported Sarah Palin and all I got was a lousy DVD !)
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To: Reagan69
I'm a 25%.
15 posted on 01/24/2012 9:54:17 AM PST by tobyhill (Obama, The Biggest Thief In American History)
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To: Utmost Certainty
The federal personal income tax was peddled (by Republicans) with the idea it would be used only to tax THE RICH ~ the top 1% or 2%.

Obviously it's failed. Through FICA (an income tax BTW) it taxes 100% of wage earners. Through the personal income tax it double taxes yet another 53% of wage earners.

Obviously it has failed.

Tinkering with it does not solve the fundamental problem ~ best that we just get rid of it and move on to some other way to pay for government.

Arguments to the contrary are (1) venal, (2) suggestive of having a personality disorder, (3) immoral.

16 posted on 01/24/2012 9:54:47 AM PST by muawiyah
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To: USNBandit
Now figure that as single with no dependents other than yourself. It will be one hell of a lot more than 15%!

That is what pi**s me off. They should tax everyone the same and they can have as many kids as they can afford on whats left.

17 posted on 01/24/2012 9:56:51 AM PST by Beagle8U (Free Republic -- One stop shopping ....... It's the Conservative Super WalMart for news .)
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To: Utmost Certainty

AMEN!
case in point:
Canada doesn’t have a Fannie or Freddie nor a tax write off for mortgages, yet people still own homes there and they didn’t have a national mortgage meltdown.


18 posted on 01/24/2012 10:01:30 AM PST by WOBBLY BOB (Congress: Looting the future to bribe the present.)
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To: tobyhill
So Mitt Romney thinks his effective tax rate is about 15%.

Fault the Representatives and Senators (past and present). It is the US Congress that establishes legislation regarding the tax rates. Wonder what most of Congress pays?

This type of article is trying to play into the class-envy environment [1%-ers vs 99%-ers].

[Disclaimer: I am not a Romney supporter. But I do not begrudge rich people earning from the fruits of their labor. In capitalism, those rich are usually the ones creating jobs and companies.]
19 posted on 01/24/2012 10:03:49 AM PST by TomGuy
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To: tobyhill

Churn that class resentment, CNN!

Jump on the anti- capitalist bandwagon!

Feed the fires of envy.

Push the moocher/social justice mentality.

Get Obama re-elected!


20 posted on 01/24/2012 10:04:17 AM PST by Iron Munro ("Don't pick a fight with an old man. If he is too old to fight he'll just kill you." John Steinbeck)
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To: Beagle8U
The group that Obama is going to actually talk to are the ones that pay little to no taxes, have many children, on food stamps, on section 8 housing and get back thousands every year with the EITC (”Earned” Income Tax Credit).

Obama is going to bamboozle the actual Middle-Class to think that he is actually working for them but in reality they are the only ones he can take from to pay for his Social Experiment.

21 posted on 01/24/2012 10:05:29 AM PST by tobyhill (Obama, The Biggest Thief In American History)
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To: TomGuy
Of course they are playing the class-envy card but it will backfire on them when the Real Middle-Class realizes that it's their taxes will be the ones to increase under Obama’s plan.
22 posted on 01/24/2012 10:10:08 AM PST by tobyhill (Obama, The Biggest Thief In American History)
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To: tobyhill

What they fail to tell you is that his income, when originally earned, was presumably taxed at a much higher rate. Now it is long term capital gains. The media did the same when they found out that most of H. Ross Perot’s fortune was in tax-free municipal bonds and he paid very little federal income tax.


23 posted on 01/24/2012 10:17:33 AM PST by crusty old prospector
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To: tobyhill; P-Marlowe; wmfights

Since most americans don’t make sufficient income to avoid the payroll taxes on their total income, then yes, since the payroll tax is about 6.2% or so, they automatically have only to be in the 9% range to pay as much or more than Romney. And it’s worse for self-employed and small business, because they have to pay all 13% or so of their own payroll taxes.

In their case, the need pay only 2% income tax to be in Romney’s range.


24 posted on 01/24/2012 10:48:20 AM PST by xzins (Retired Army Chaplain and Proud of It! Pray Continued Victory for our Troops Still in Afghan!)
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To: crusty old prospector
Remember Newt paid 31% so it would be kind of hard for Obama to claim Newt didn't pay his “fair share” tonight since 80% paid less than 15% and we already knew that 50% pay no taxes.

I'm sure Newt would love a 15%.

25 posted on 01/24/2012 10:53:53 AM PST by tobyhill (Obama, The Biggest Thief In American History)
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To: tobyhill

The US has one of the highest corporate tax rates in the world (35%). The EU rate is 25%. This is why the capital gains rate is so low in the US (15%). Throw in state and local taxes and the actual effective tax rate is close to 50%.

If the 15% cap gains is ‘unfair’ then drop the corp tax rate to compensate. It would make the US way more competitive abroad and end the practice of companies keeping profits offshore to avoid the huge tax hit. Companies would bring the money back to the US for growth and investment here instead of the perverse tax incentive to make it cheaper to reinvest abroad.


26 posted on 01/24/2012 11:00:11 AM PST by Gideon7
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To: tobyhill
No one should have to pay more than $100,000 in taxes. So by my count he was screwed out of more than three mil by Obama & Co. last year.

ML/NJ

27 posted on 01/24/2012 11:15:46 AM PST by ml/nj
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To: tobyhill

Employee Social Security 2011 FICA Rate: 4.2% (in 2011 the employee rate does not match the employer one)

Employer Social Security 2011 FICA Rate: 6.2%

Employee Medicare 2011 FICA Rate: 1.45%

Employer Medicare 2011 FICA Rate: 1.45%

Total FICA 2011: 13.3% (normally 15.3%)

Romney paid 15.4% of his adjusted gross income in combined FICA and income taxes (line 61 / line 38).

So the real question should be...

Did you pay more than 2.1% in income taxes?

because 80% of ALL Americans paid 13.3% in FICA taxes alone!


28 posted on 01/24/2012 11:23:17 AM PST by Brown Deer (Pray for 0bama. Psalm 109:8)
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To: xzins

Did you notice that when you point out obvious tax disparities between people who earn their living by the sweat of their own brow and those who earn their living off the sweat of other people’s brows that you get accused of playing the politics of envy?


29 posted on 01/24/2012 1:21:33 PM PST by P-Marlowe (NEWT!!! Because everyone else is just average.)
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To: P-Marlowe; wmfights
Did you notice that when you point out obvious tax disparities between people who earn their living by the sweat of their own brow and those who earn their living off the sweat of other people’s brows that you get accused of playing the politics of envy?

Yes. It's a mathematics question, and they can't do the numbers. They want to argue about why the train left the station at 5 pm and averaged 60 mph.

30 posted on 01/24/2012 1:33:46 PM PST by xzins (Retired Army Chaplain and Proud of It! Pray Continued Victory for our Troops Still in Afghan!)
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To: xzins
The headline is deliberately misleading. Romney's percentage of tax is based on "taxable income". How much of his income is non-taxable? Like you said, the wage earner starts off by paying 14% of his income in FICA off the top. Sure that includes the "employer contribution" but that is still the worker's income. Romney's effective tax rate is actually only about 2% when compared to the effective tax rate paid by the employees of the businesses he is invested in.

So, no matter how you slice it, the tax code favors guys like Romney over guys like you and me. That is a fact. There may be reasons for this disparate treatment, but that doesn't stop it from being disparate.

31 posted on 01/24/2012 1:33:46 PM PST by P-Marlowe (NEWT!!! Because everyone else is just average.)
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To: Brown Deer
Romney paid 15.4% of his adjusted gross income in combined FICA and income taxes (line 61 / line 38).
So the real question should be...
Did you pay more than 2.1% in income taxes?
because 80% of ALL Americans paid 13.3% in FICA taxes alone!

Where did you get the notion that the "effective" rate of 15.4% that Romney paid is combined FICA and income taxes? Of course this is not to mention the fact that FICA is not applied to adjusted gross income as your calculation appears to imply but rather to WAGE INCOME up to about $108,000 of wages.

Or perhaps you are assuming that Romney's entire adjusted gross income was wage income with no income from dividends, interest, capital gains, or other investment income. Otherwise, your calculations based on the difference between the payroll tax rates for FICA and the "effective" tax rate is just a bunch of meaningless democrat party class warfare bs.

32 posted on 01/24/2012 1:34:27 PM PST by VRWCmember
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To: P-Marlowe

The tax rate of 15% on capital gains is a constant, so far as I know. I’ve heard no one say that an investor must pay payroll tax on what is assumed to be after tax income from income.

In the case of those who are given their pay in the form of capital gains, there truly is a MATHEMATICAL disparity with those who do not.

I repeat that in my humble opinion a household should be considered a business and that all expenses to run that household should be taken out of consideration. Every employee should be considered a contractor selling his services for this purpose.

Deduct the house, the utilities, the transportation, the commo, clothing,...you name it.


33 posted on 01/24/2012 1:50:22 PM PST by xzins (Retired Army Chaplain and Proud of It! Pray Continued Victory for our Troops Still in Afghan!)
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To: P-Marlowe
The headline is deliberately misleading. ....
Romney's effective tax rate is actually only about 2% when compared to the effective tax rate paid by the employees of the businesses he is invested in.

If you are comparing his effective tax rate as a percentage of his wage income then it is probably several thousand percent rather than 2%.

As for your assertion that his effective tax rate is only about 2%, based on your errant calculation of taking the difference between the FICA rates on wages and his estimated 15% effective tax rate, are you being deliberately misleading or just ignorantly misleading?

34 posted on 01/24/2012 2:12:13 PM PST by VRWCmember
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To: tobyhill

What you know about taxes could be smoked in a crackpipe in 2 minutes.


35 posted on 01/24/2012 5:58:34 PM PST by muawiyah
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To: VRWCmember
An easy fix in this dispute is to simply stipulate in the tax code that when capital gains income is turned into real income it must then be taxed at the applicable personal income tax rate in the year realized.

Otherwise, if capital gains are invested in capital then they are simply not going to be taxed.

That would turn all capital gains into the functional equivalent of a 401(k).

You could also eliminate 401(k) and equivalent plans and leave the savings function up to the individual wage earners or dividend earners.

That way the several million bucks guys like Mitt Romney and Warren Buffett pull out of their investments to finance their multiple homes, multiple cars, personal physicians, travel and food, shelter and clothing would be taxed just like the ordinary wage earner's income that goes for food, clothing and shelter!

36 posted on 01/24/2012 6:06:00 PM PST by muawiyah
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To: VRWCmember; xzins
If you are comparing his effective tax rate as a percentage of his wage income....

No, I'm not because Mitt Romney does not have a "wage" income. Probably never did. I'm comparing the income from all sources from Romney and the income from all sources for Joe Six Pack.

Joe Six pack making $20 an hour has a minimum effective income tax of 15% just by his FICA contributions and probably another 15% tax on his earned income making his overall effective income tax rate somewhere in the neighborhood of 30%. So the headline is clearly misleading.

37 posted on 01/24/2012 7:20:50 PM PST by P-Marlowe (NEWT!!! Because everyone else is just average.)
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To: VRWCmember
Where did you get the notion that the "effective" rate of 15.4% that Romney paid is combined FICA and income taxes?

From his tax returns.

Of course this is not to mention the fact that FICA is not applied to adjusted gross income as your calculation appears to imply but rather to WAGE INCOME up to about $108,000 of wages.

Actually in Romney's case, that is the fact! The 15.4% in total federal incomes taxes paid by him, do indeed include his FICA payments.

but btw, you did miss the error in my posting because I based this information on his 2010 tax return and in 2010, 80% of ALL Americans actually paid 15.3% in combined employee and employer FICA tax, which leaves a difference of ONLY 0.1%!
38 posted on 01/24/2012 7:37:30 PM PST by Brown Deer (Pray for 0bama. Psalm 109:8)
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To: tobyhill
Mine's about 9.5% after all "deductions" .... mostly mortgage interest deduction, and the fact that I spend more than 15% of my gross income on health care related expenses for myself.

I make "too much" to get the EITC or tax deductions for my two teenage sons, both of which literally eat me out of house and home.

39 posted on 01/24/2012 7:40:26 PM PST by usconservative (When The Ballot Box No Longer Counts, The Ammunition Box Does. (What's In Your Ammo Box?))
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To: VRWCmember
WOW! and you are a "full time professional and part time college professor of Economics and Finance."?

I certainly find that hard to believe.
40 posted on 01/24/2012 7:41:23 PM PST by Brown Deer (Pray for 0bama. Psalm 109:8)
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To: Reagan69
I’m out 35% !

They are talking about Federal Income taxes paid. It doesn't include any other taxes paid like Social Security or State taxes.

41 posted on 01/24/2012 7:47:47 PM PST by Doe Eyes
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To: Doe Eyes
It doesn't include any other taxes paid like Social Security or State taxes.

Romney's 15.4% DOES include his Social Security & Medicare taxes.
42 posted on 01/24/2012 8:03:16 PM PST by Brown Deer (Pray for 0bama. Psalm 109:8)
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To: Brown Deer; VRWCmember; P-Marlowe

Allow me to suggest that Romney does NOT pay taxes at the same rate as does “Joe Sixpack”.

1. Payroll taxes are on the first 108,000 of income.

2. Joe Sixpack and wife bring in 90,000 between their two jobs. He pays his payroll taxes AND she pays her payroll taxes. Their combined percentage is 28% since the payroll tax is taken out PER worker. Her social security and his social security. Why do I say 28% and not 14%? Because their companies’ portions of their payroll tax reduces their takehome pay. In the same way as a company passes on the cost of taxes in their products, they pass along their costs for employees in what they give to employees as take home pay.

3. Romney pays payroll tax on 108,000 of whatever he makes. Obviously, Joe Sixpack is paying at the rate of 100% for each dollar he makes. Romney, on the other hand, is paying at a miniscule rate, 108000/22000000 = .004 or .4%.

4. So, since we’re talking RATES, Joe Sixpack pays at a higher rate than Romney who is just under 15%, while Joe Sixpack and wife have not added on their income tax rate of between 5-15% depending on kids, mortgage, deductions, etc.

There is NO WAY that Romney pays at a higher rate than does Joe Sixpack. It simply isn’t mathematically feasible.


43 posted on 01/25/2012 5:56:40 AM PST by xzins (Retired Army Chaplain and Proud of It! Pray Continued Victory for our Troops Still in Afghan!)
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