IF the tax rate is as we said yesterday then WHY is Romney’s rate 14%? Here’s the answer. The tax rates I shared yesterday are on earned income, dollars we earn from working.
Once we pay those taxes some of us invest a part of the remaining dollars we have left. When that money (that we have already paid taxes on) earns money in a bank account or with stocks it is taxed again. However the government taxes it at 15% (for assets held one year or longer. Over double that for less than a year).
Mitt Romney had no work or job income last year, all his income was derived from long term investment gains. Thus a 15% tax rate. (It was reduced to 14% by virtue of the fact he had deductions for things like the fact he gave 33% of his earnings to charity).
So when you hear he paid a low rate that is true, but it is not a lower rate than anyone else with interest and dividend income only. You are not getting the whole story.
Thus when you hear people say he and others paid too low a rate think about what they are saying. What they are telling you is that if you saved money and invested you should pay a higher tax on the dollars you already paid tax on. In fact they mentioned 30% (The Buffett rule they discuss).
If you support raising the taxes on your interest and dividends to 30% (your fair share) then it’s clear you should vote Democratic and President Obama.
If you think the 15% rate on long term (over one year) investment earning is fair then vote Republican and Mitt Romney.
YOUR CHOICE, OUR FUTURE