People of Northwest Public Radio
Wed January 18, 2012
Romney Says His Tax Burden Is About 15 Percent
Originally published on Wed January 18, 2012 3:27 am
RENEE MONTAGNE, HOST:
Even if Wikipedia was working, you couldn't use it to locate information about Mitt Romney's most recent tax filings. He has yet to make that tax information public.
STEVE INSKEEP, HOST:
Under pressure from his opponents, Romney says he will release information in April.
MONTAGNE: But 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.
NPR's Scott Horsley has more.
SCOTT HORSLEY, BYLINE: Mitt Romney came around to the idea of releasing his tax returns, very slowly. Initially, he had no plans to make his taxes public. Then on Monday, when pressed during a debate, he said he probably would. And yesterday, Romney went further, saying he will release his tax records, but not until tax season when his 2011 form is complete.
MITT ROMNEY: I know that if I'm the nominee, people will want to see the most recent year, and see what happened in the most recent year and what things are up to date. And so they'll want to see the tax returns that come out in April. So rather than sort of have multiple releases of tax returns, why, we'll wait until the tax returns for the recent year are completed and then release them.
HORSLEY: That schedule doesn't satisfy Republican rival Newt Gingrich. He argues South Carolina voters are entitled to see Romney's tax records now, before they cast their primary ballots on Saturday.
NEWT GINGRICH: I believe we have the right to know, and therefore he owes us the knowledge. I'm not accusing him of anything. I'm just saying if there's nothing there, why not release it this week?
HORSLEY: In addition to showing how much money Romney makes, the records would show how much he gives away, to whom, and how much he pays the government in taxes. Romney offered a hint about that last question yesterday when he was asked about his tax rate.
ROMNEY: What's the effective rate that I've been paying? It's probably closer to the 15 percent rate than anything, because my last ten years, I've - my income comes overwhelmingly from investments.
HORSLEY: And investment income gets special treatment under the federal tax code. Here's how it works: Middle-class workers collecting wages or salaries pay a top tax rate of 25 to 28 percent. Upper-income workers might pay as much as 35 percent.
But people like Romney who make their money off investments, never pay more than 15 percent in taxes, no matter how much money they earn. The idea behind this favorable tax treatment is to encourage more investment, in hopes of making society richer. But it can also raise questions of fairness, questions President Obama has been highlighting for months.
PRESIDENT BARACK OBAMA: It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million.
HORSLEY: The issue was famously raised by billionaire investor Warren Buffett, who complains he pays taxes at a lower rate than his own secretary. Mr. Obama suggested last fall, the tax code be modified so wealthy investors would pay rates at least as high as ordinary workers.
OBAMA: Middle class families shouldn't pay higher taxes than millionaires and billionaires. That's pretty straightforward.
HORSLEY: Straightforward or not, Mr. Obama's proposed Buffett principle has so far gone nowhere. But it's likely to get another airing from the White House, now that Romney has disclosed he's in the same low tax bracket as the billionaire Buffett.
Meanwhile, Newt Gingrich wants to go in the opposite direction, and make investment income completely tax free. That would be a huge windfall for wealthy investors.
But Romney says it's going too far. Romney has also proposed giving a larger tax break to investment income, but only for families making less than $200,000 a year. By the way, Romney said yesterday, not all of his money comes from investments, and not all of it is taxed at the special 15 percent rate.
ROMNEY: I got a little bit of income from my book, but I gave that all away. And then I get speakers fees from time to time, but not very much.
HORSLEY: The Democratic National Committee points out in 2010, Romney's speaking fees topped $374,000.
Scott Horsley, NPR News, Columbia, South Carolina.
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MONTAGNE: And you're listening to MORNING EDITION from NPR News. Transcript provided by NPR, Copyright NPR.