Guardian UK: Mitt Romney's tax returns refocus US on fairness
Mitt Romney's tax returns refocus US on fairness
Romney's tax rate – well below what most middle-class Americans pay – is a timely reminder of growing inequality
guardian.co.uk, Tuesday 24 January 2012
So, now we know that the Republican race for the presidential nomination has boiled down to a race between the very rich "historian" (aka Washington lobbyist) Newt Gingrich and the even wealthier Mitt Romney, who does not appear to have a paid job or much earned income, but receives lots of unearned income from an earlier spree as what Rick Perry called a "vulture capitalist". The former Massachusetts governor released his tax returns Tuesday, which showed that he and his wife Ann paid $3m tax on unearned income of $21.7m in 2010 – a rate of only 13.9%.
He estimates he will pay $3.2m on income of $20.9m for 2011, implying a tax rate 15.4%, approximately the figure he revealed last week. It is increasingly looking like a major political mistake not to have released them earlier, especially given that, to this point, no obvious exploding bomb had been found in his record.
Romney's tax rate turned out to be around half the rate of tax paid by President Barack Obama, despite his income being much lower. The Obamas paid 26% tax on $1.8m in 2010, their tax return showed. Newt Gingrich, paid 31.6% on $3.16m earned jointly in 2010 with his third wife, Callista. During the televised GOP debate in Tampa Monday, Romney said: "I'm proud of the fact that I pay a lot of taxes." Not enough. Romney may be successful, as he claims, but he is the 0.01%.
The problem is that the rich have been getting richer but there has been little or no trickle-down to anyone else. Earlier this month, my old pal, labor economist Alan Krueger, who is chairman of Obama's Council of Economic Advisers made a speech on income inequality at the Center for American Progress. He noted that the share of all income accruing to the top 1% increased by 13.5 percentage points from 1979 to 2007, which is equivalent of shifting $1.1tn of annual income to the top 1% of families. The share of income going to the top 1% over this period "exceeds the total amount of income that the entire bottom 40% of households receives". .................(more)