Romney’s tax dump today is full of interesting stuff.Â He reports earning $14m and paying $2m in taxes, for a US federal income rate of about 14%.Â He gave $4m to charity, presumably including a 10% tithe to his church. (This isÂ not the “put what you wish in the collection plate” kind of thing most churchgoers know about: if you don’t give the right amount – and the right amount is determined by something very like an audit – you get a lot of what the Mormons call ‘fellowship’ about it, a nice way of saying your whole social and business life goes to hell in a handbasket, and you are excommunicated from some critical church sacraments.Â There’s a reason Ann keeps wanting to count their tithing in with their taxes.)Â Whether the international business empire that is the LDS church is rightly considered a charity in ordinary language is a separate issue, of course.
The Romneys only deducted $2.25m, apparently to keep their average tax rate above the outrage level at least until the election (later they can amend their return – or just carry the deduction over to a future year: it will be worth a lot more if the Bush tax cuts expire, and the financing costs of a deal like this are historically low now.)Â At the capital gains tax level of 15%, this means they gave (or lent at no interest) about a quarter-million dollars to an institution that Mr. Romney believes is much too big and spends too much money, but Romney has never had a problem violating a deeply-held position of principle if it will make him look good to someone for a news cycle or two.Â It also means, by his own words, that people should think him unqualified for the presidency, as he is on record saying anyone who pays more taxes than legally necessary is some kind of fool.
What he actually owed, ignoring the foregone charitable deduction, was about 12.4%.Â Apparently he doesn’t have a major problem with people paying almost equal amounts to their churches and their government; if his recipe were generalized, the two together would account for about 70% of GDP.
As neither Romney has a salaried job (no payroll tax), their federal income tax is probably close to their total federal tax, so they are paying a smaller percentage of their enormous income to the government he wishes to lead than the median American family: a $150/minute guy who doesn’t even have to go to the office is liable for a smaller percentage of his income than people who earn $15/hr actually punching in and out.Â This state of affairs is apparently OK with Mitt; nothing in his tax plan, as far as I can see, would cost him a penny.
Much remains unclear and probably will not be revealed.Â For example, what definition of “income” should we calculate the Romneys’ tax burden on?Â They have all sorts of unrealized gains, and any person of wealth can hire people to find lots of ways – equine, for example – to move what most people would regard as income out of AGI or taxable income.Â We’re still waiting to learn about the offshore accounts.
The bald facts of this round of transparency, whatever shoes haven’t hit the floor yet, are grossly, radiantly, repulsive.Â That an enormously rich presidential candidate can present them with a straight face, without simultaneously deploring the sweetness of his deal, and the system he got it from, is simply unspeakable.