Skip to comments.Hey, Media, a $75K Mechanic Pays a Lower Tax Rate Than Romney
Posted on 09/27/2012 4:01:43 AM PDT by Kaslin
If "journalism malpractice" were a crime, Nancy Grace would not be able to keep track of all the trials.
ABC news reporter Jonathan Karl recently said: "Mitt Romney ... made $13.7 million last year and paid nearly $2 million in taxes. His effective tax rate -- 14.1 percent. That's a lower rate than an auto mechanic who made $75,000 in pay."
Back in January, anchor Diane Sawyer teased "Mitt's millions" on ABC's "World News": "What Mitt Romney's taxes really show about wealth, taxes and fairness." Then correspondent David Muir informed viewers: "(Romney's) tax rate? In 2010, about 13.9 percent, perfectly legal under the current tax code, which allows Americans to pay a much lower rate, a capital gains tax, when their earnings come from investments, and not a job." Muir cut to a "tax analyst," who said: "If (Romney) were a doctor or lawyer with the same salary, he would be paying 35 percent (emphasis added)."
It gets worse.
NBC, through MSNBC, employs "civil rights activist" the Rev. Al Sharpton as a talk show host. He regularly rails against Romney and his fellow racist Republicans while supporting the President who wants to raise taxes on the "millionaires and billionaires" who "can afford to pay a little bit more." Sharpton is rich. But he has trouble with the "pay a little bit more" part. According to a recent profile in GQ, Sharpton lives large, in a ritzy Manhattan "bachelor pad." He belongs to an exclusive private club where -- after a television performance in which he rails against the top 1 percent -- he hangs with the top 1 percent.
Though he pushes for tax hikes on the wealthy and demands tax transparency for Romney, Sharpton himself has taken a respite from paying his own taxes. According to the New York Post last December, Sharpton owed $2.6 million to the IRS and almost $900,000 in state taxes. In addition, his nonprofit (in debt by $1.6 million) owed more than $880,000 in federal payroll taxes. But we digress.
NBC's Peter Alexander, on "Today," told his audience in January: "Romney appeared to be knocked off message, promising to share his returns in April and also disclosing that he pays 15 percent in income tax, like many wealthy Americans, but less than many middle class Americans (emphasis added)."
Over at taxpayer supported NPR, its "Morning Edition" co-host Renee Montagne said in January: "Yesterday, Romney did let slip a provocative tax detail. He acknowledged he's probably paying an effective tax rate of around 15 percent. And that's well below the rate that many middle-class families pay (emphasis added)."
One problem. It isn't true -- not even close.
First, as with the purchase of new car, almost nobody pays sticker price. To make Romney's "low" effective tax rate look bad, some news media irresponsibly compare his rate to that of a middle-class taxpayer's top marginal rate.
Just how misleading?
Assume Mr. Auto Mechanic is married, with two children. After offsetting income with exemptions, deductions for things like mortgage interest and assorted tax credits, Mr. Mechanic's effective federal income tax rate -- the percentage of income actually paid in taxes -- is much less than Romney's rate.
The liberal Tax Policy Center reports that 91.4 percent of individual taxpayers with adjusted gross incomes (AGI) between $50,000 and $100,000 pay less than 15 percent in taxes. And 43.9 percent of the $50,000-$100,000 AGI taxpayers pay an effective rate between 5 and 9.99 percent, while 4.6 percent of this group pay no federal income tax at all.
Many in the media forget about all those pesky deductions and credits and exemptions. Income tax brackets are marginal rates. The top marginal rate in a taxpayers' tax bracket DOES NOT apply to his entire income from dollar one.
New York Times' David Leonhardt understands this and, to his credit, explains it properly: "This disconnect between what we pay and what we think we pay is nothing less than one of the country's biggest economic problems. ... All told, most households pay less than 15 percent of their income to the federal government because of tax breaks, like the exclusion for health insurance, and because marginal rates apply to only a small part of a taxpayer's income. On the first $70,000 of a couple's taxable income, the total federal income tax rate is only 13.8 percent."
Why does Leonhardt comprehend this, while so many in his profession do not? Consider this.
Previous editions of a widely used high school textbook, "The American Pageant," by Thomas Bailey and David Kennedy, show charts on the federal deficit in historical dollars. When it came to the Ronald Reagan years, the graphic shows a rapidly increasing deficit. But as a share of the gross national product, Reagan's deficits are really much smaller than FDR's. By not showing the numbers as a share of the GNP, their charts make his deficits look outrageous. Of the textbook's depiction of the "outsized" Reagan deficit, University of Dayton history professor Larry Schweikart said, "The appearance to mislead seems intentional."
Well, ABC, NBC, NPR, is it intentional?
Remember, the rate on earned income is PROGRESSIVE ~ so your first $40K might be taxed $0 because you have various exemptions and deductions, but the next $40 K is certainly going to be at what Mitt paid, and your third $40 K will be taxed at a rate far above anything Mitt paid.
I know there are all sorts of justifications for this disparity, but seriously, people don't look at their average rate, they look at their highest marginal rate when they compare their pitiful little quarter million dollar salaries against $20 million in capital gains!
The conclusion is that even if it's a neat idea and encourages investment ~ in something ~ whatever that is ~ talking about it in public doesn't win voters. Actually, it does this ~ I WANT MITT's AVERAGE RATE!
Not all income described as capital gains has been taxed earlier.
Just cut the rates ~ and don't be using Capital gains arguments to continue justifying a higher rate on personal earned income!
Best bet is to ELIMINATE the federal income tax!
Personally I don’t care what Mitt Romney’s tax rate is,
HE PAYS HIS FRICKIN TAXES.
Why isn’t Al Sharptongue in jail? Sharptongue and his crooked organization owe Millions, if he was white his ass would be in jail or broke like Willie Nelson was when they took his taxes.
What about all of Obama’s friends in the Government who didn’t pay their taxes.
What is Harry Reids and Nancy Pelosi’s tax rate?
What is Diane Sawyers tax rate? She is rich.
Just give me Mitt's rate and be done with it.
And if those other people need to be put in jail, put them in jail.
Quit your crying and pay your taxes you Mitt Romney hating troll.
Don’t start talking like a fascist pig again. Just cut the tax rates ~
Now I like that idea... but the commies would never allow it. We need to pay the least amount of taxes that we can... we cannot trust the government with more money than they need... they are like meth-heads.
Almost all of it is... almost.
Homes ~ sell your home you get to pay capital gains on the appreciated value. 401(k) ~ sell your stock, none of the gain from appreciated value is taxed until you take out the money and then you pay at your current federal personal income tax rate ~ and that BTW, is an argument for REDUCING the federal personal income tax rate to no higher than the capital gains rate!
People with common sense know it's great Mitt "only" supposedly paid 14% tax rate, but also believe the rate should be much lower!
Journalism = Fiction
Of the textbook's depiction of the "outsized" Reagan deficit, University of Dayton history professor Larry Schweikart said, "The appearance to mislead seems intentional."
might be hard to get your brain wrapped around this thought but I'll try anyway...
EVERYONE in the country has Mitt's tax rate. Period, end of story. The tax code is complicated, but anyone and everyone who (acurately) fills in all the little boxes on thier tax forms with the same numbers as Mitt would end up with the same taxes.
I consider my tax "rate" to be how many dollars per hour I send to the government. You know, REAL MONEY. Roads aren't built with percentages, they are built with dollars. Anyone thinking Mitt is skating and a freeloader because he paid a lower percentage of his earnings than someone else, can pound sand. Get back to me when they've forked over more DOLLARS. You know, those spendy things.
Thanks. BTW, our new one, “A Patriot’s History of the Modern World, to 1945,” is out on Oct. 11. Hope you’ll pick up a copy.
BTW, you missed the point entirely. They don't!
Now, I don't think Mitt did anything illegal (he is to smart for that). Can't blame a man for following the tax code.
But I pay double the rate (much less the total money). The argument that is made is either the rich pay more in total so they should pay less as a percentage, or that the rich deserve to keep more because they will possibly use that extra money to hire people.
Both have merits, neither will fly with the guy who can't make ends meet. That is why I said Mitt releasing his returns was bad idea. He did nothing wrong according to the tax code, but he handed the left a HUGE amount of ammunition. I honestly can't understand why he thought it was a good idea.
Try $250,000 ~ normal exemptions and deductions for a family of 4.
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