This number - 15% - is the presumptive Republican nominee's tax rate. FIFTEEN percent. Mitt Romney pays such a low rate because most of his income comes from the "carried interest" rule that allows those running hedge funds or private equity firms (like Romney's Bain Capital) to pay taxes at the long-term capital gains rate, which is 15%.
The big question going into this election in November is why we allow these hedge fund and private equity owners to be taxed at the long-term capital gains rate. Capital gains are taxed at a lower rate to supposedly encourage long-term investment (defined as longer than one year) by individuals. The stated goal is to encourage long-term investing of our own money into investments like stocks and real estate. But these hedge-fund owners aren't investing their own money. They're investing other people's money (same with Bain Capital). So why are they receiving this lower rate?
Romney's tax returns will shine a light on this form of class warfare, where those making far less than Romney (like his secretary) pay a much higher tax rate. Billionaire Warren Buffett has repeatedly spoken about this inequity.
He said this today in South Carolina, when asked about his tax rate:
"It's probably closer to the 15 percent rate than anything," Mr. Romney said. "Because my last 10 years, I've -- my income comes overwhelmingly from some investments made in the past, whether ordinary income or earned annually. I got a little bit of income from my book, but I gave that all away."
Mr. Romney added: "And then I get speaker's fees from time to time, but not very much."
Americans don't mind their candidates being rich (see Mike Bloomberg as mayor of New York City). What they hate are rich folks who pretend to not be rich (or to show how completely out of touch they are with ordinary folk). Is Mitt Romney so clueless as to think that a few hundred-thousand dollars made from speaking engagements is "not very much" money?
In fact, in the most recent year, Mr. Romney made $374,327.62 in speaker's fees, at an average of $41,592 per speech, according to his public financial disclosure reports.
At least he gave the money away (so he says).
Romney's real Achilles heel, though, is the 15% tax rate that he pays. This income inequality will play right into the Occupy Wall Street movement, the main goal of which is to reveal the huge income disparities that exist in this country.
The Republicans just might be committing harakiri by nominating such a rich, tone deaf man as Mitt Romney.
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