Beware False Claims: 'Romney's Tax Rate Is Below That of Most Wage-Earning Americans'

Discussion in 'Politics' started by Trader666, Jan 25, 2012.

  1. Beware False Claims: 'Romney's Tax Rate Is Below That of Most Wage-Earning Americans'
    By Noel Sheppard | January 24, 2012 | 09:41

    Now that Republican presidential candidate Mitt Romney has released some of his recent tax returns, it is quite clear that the Obama-loving media are going to use the information against the former Massachusetts governor in any way they can.

    Take for example the wire service Reuters who was quick out of the gate early Tuesday morning with the following bogus report (emphasis added):

    As NewsBusters reported last Thursday, nothing can be further from the truth.

    The reality is that in 2009, the most recent year that records are available, 97 percent of Americans paid less than the 13.9 percent Romney did in 2010.

    As demonstrated by Romney's 2010 return, the media are using Adjusted Gross Income to determine his tax rate. On line 37, the Romneys reported $21.6 million in AGI. This is the figure used Tuesday in press reports concerning this matter.

    As you can see from the first table at the bottom of this article, people that had an AGI of $100,000 and under $200,000 in 2009 had an average tax rate of 11.9 percent. All those making under $100,000 had tax rates that were even less. The only people paying more than this were those that made over $200,000 paying at rates between 19.6 percent and 25.8 percent.

    As you move to the second table at the bottom of the article, you'll see that if you add up all the percentages of returns filed for those making under $200,000 - begin adding numbers in the third column at "No adjusted gross income" and add all the way down to "$100,000 under $200,000" - it adds up to 97 percent.

    This means that in 2009, 97 percent of Americans filing taxes paid 11.9 percent or less.

    Somewhat surprisingly, USA Today reported numbers Tuesday supporting this conclusion:

    In reality, according to the IRS and highlighted near the top of table one, the average American paid 12.8 percent in 2009.

    Regardless, the important point here is that a 13.9 percent federal income tax rate as measured by AGI is not low for only three percent of Americans paid more than that in 2009.

    Unfortunately, because we have marginal tax brackets going up to 35 percent, the average person INCLUDING folks in the media thinks the wealthy pay 35 percent, and that any wealthy person - including Romney! - who pays less than this is somehow cheating.

    The truth is that nobody pays taxes exclusively at the rate of this top bracket; in 2009, the highest average tax rate for any income bracket was 25.8 percent for those making $2 million and under $5 million.

    So when you read or see someone in the coming days - and you will! - saying that Romney's tax rate is either low or below what most Americans pay, consider the person to either be misinformed or misinforming.