Americans Should Be Happy Investors Like Romney Get A Low Tax Rate
The Romney campaign took some of the wind out of the left’s sails this week when he made disclosure of his tax records for the last decade, and provided information about the tax rate he paid going all the way back to 1990. Democrats had been making hay out of Romney’s previously unknown tax record, even going so far as to claim that he may not have paid federal taxes at all for years.
Which is absurd. Over the last 22 years Romney has paid millions in taxes, including nearly $2 million in 2011 alone.
But now the left is moving the goal posts. Now they’re upset that Romney pays “only” an effective 14.1% rate in taxes on his income. The implication they make is that Romney isn’t paying his fair share.
That’s neither true nor fair. First, Romney pays a lower effective tax rate than most wage earners because Romney isn’t earning a wage. Most of Romney’s income is from investments, and for better or worse (mostly for better, I believe) our federal government taxes investment income much more lightly than wage income.
This is true both for millionaire businessmen like Mitt Romney and middle-class retirees living off of interest from savings and an investment portfolio. Romney doesn’t pay a low rate because he’s greedy. He pays pretty much the same low rate most Americans pay on investment or interest income.
What’s more, anyone who claims to be interested in job creation in this country shouldn’t want people like Romney who are investing in our economy to pay a higher rate. A higher tax rate on investments means fewer investments and, in turn, fewer business start-ups and fewer jobs.
If we’re going to be upset about the disparity between tax rates on investment/interest income and the tax rates on wage income, let’s close that disparity by lowering taxes on wages instead of hiking taxes on investments which, most assuredly, would be detrimental to economic growth.Tags: mitt romney, Taxes