Lying about Romney's taxes
The Democrats' efforts to portray Mitt Romney as not paying his "fair share" ignore the truth, shamelessly lying about taxes. The latest example comes from Chicago Mayor and former White House Chief of Staff, Rahm Emanuel.
In his appearance last Sunday on ABC's This Week with George Stephanopoulos, former Obama Chief of Staff and now Chicago Mayor Rahm Emanuel continued the Obama campaign's efforts to mislead the public about Mitt Romney. On page 3 of the show's July 15, 2012 transcript, Emanuel stated that Romney's 2010 tax return showed that he "paid 14 percent, about half of what a middle-class family pays."
STEPHANOPOULOS: The campaign has also been pushing very hard for Mitt Romney to release more of his tax returns. He says the public has everything they need to know to understand his finances. And we do know that Mitt Romney made a lot of money. We know he paid a relatively low tax rate. What more will the returns tell us that we don't know?...
EMANUEL: ...Now the second thing, George, he did not just relatively -- he paid 14 percent, about half of what a middle-class family pays....
In fact, 14% is in line with the percentage of income that the middle-class pays in federal income tax. With only the two personal exemptions and the standard deduction applicable to a husband and wife (even with no mortgage, medical or charitable deductions, dependents or other tax preferences), a family would have to earn over $88,000 to pay more than 14% of its income in federal taxes. Yet Emanuel went so far as to state that Romney's 14% is about half of what a middle-class family pays. Actually, it would take income of at least $442,000 for a "middle-class" husband and wife filing jointly to be taxed at 28% of their income, even if they had no additional deductions, credits or preferentially taxed income.
You can check this out by working through the income tax forms for 2010, or you can enter the numbers in the tax calculator here. Since the calculator is based on "taxable income," be sure to adjust for the fact that the actual income for a family filing a joint return will be at least $18,700 more than their taxable income (based on the two personal exemptions of $3,650 and the $11,400 standard deduction applicable in 2010).
The above calculations assumed that taxpayers are not able to take any advantage of favorably taxed sources of income or additional tax deductions, credits and the like. But IRS data for 2009, the most recent available, shows that middle-class taxpayers can and do take advantage of features of the tax code to lower their taxes. Taxpayers with income of $50,000 to $75,000 paid an average tax of 7.7%; $75,000 to $100,000 paid 8.5%; and even incomes of $100,000 to $200,000 paid just 11.9% in federal income tax. In fact, no income group, including over $10 million, is shown to pay more than 25.8% on average. Yet Emanuel makes no mention that Romney's taxes were reduced by the same legal features of the tax code that average taxpayers use to minimize their taxes. Romney's 2010 federal taxes were reduced by his $2.9 million in charitable donations and the $900,000 he paid in state and local taxes as well as having a substantial portion of his earnings from dividends and long-term capital gains. Even then, his 14% tax rate was higher than billionaire and liberal icon Warren Buffet's 11% tax rate for that same year.
Emanuel, no fool, has cynically taken advantage of the misperceptions about our highly complex federal tax code to falsely state that Mitt Romney pays taxes at only half the rate of middle-class American families. Stephanopoulos, a pushover for the fast-talking, bullying Emanuel, never challenged him on this deceit and class warfare mongering.