Morning Joe Claims Romney Pays Lower Tax Rate Than Secretaries—But Numbers Suggest That Isn't So
We'll leave it to others to assess the political fallout from Mitt Romney's statement yesterday that he paid about 15% in federal income taxes. But let's at least get some facts straight.
On Morning Joe today, Joe Scarborough claimed that the revelations about Mitt Romney's taxes might be his Dukakis-in-the-tank moment. Scarborough repeated the shibboleth Warren Buffett put into circulation that at 15%, the super-rich like Romney pay a lower tax rate than secretaries. But is that so? Running the numbers suggest otherwise. See video and analysis after the jump.
First, we need to know how much that mythical secretary makes. According to Salary.com, there are three levels of secretary: I, II and III. For our analysis, let's take the mid level, Secretary II. Salary.com says that the average Secretary II makes an annual salary of $37,836.
So how much federal income tax would be paid on that income? I ran the numbers through the official IRS calculator, using the assumptions that would result in the highest income tax; i.e., I assumed the secretary would have no dependents, make no tax deductible contributions to a savings plan, and have no itemized deductions. The IRS says that on those assumptions, Secretary II would pay $3,776 in federal income taxes. That equates to a tax rate of 9.97%, almost exactly 1/3 lower than Romney's 15%.
Note: using the same assumptions, the top-level Secretary III [average salary $43,715] would pay a rate of 10.6%. On the other end of the spectrum, a single-parent Secretary I [average salary $33,418] with one child would pay 4.6%.
After rolling tape of Romney's statement . . .
MIKA BRZEZINSKI: 15% capital gains tax rate.
JOE SCARBOROUGH: This is a problem on a lot of levels. Mark Halperin, campaigns are sometimes defined in a moment that the candidate doesn't realize. We can go back--I don't want to overstate this--but we can go back to Michael Dukakis in the tank. We can go back to 1980 and Ronald Reagan saying Mr. Green, I paid for this mic in Nashua. In this case you've got a guy worth $250 million talking about how he's paying a lower tax rate than most secretaries, something we talk about on this set all the time.
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Comments
⇒ Morning Joe
Submitted by Cool Arrow on Wed, 01/18/2012 - 10:06am.
Joe is evidently one of those relocated DC rats Rush was joking about yesterday.
No Bain, no pain
Submitted by CO2Maker on Wed, 01/18/2012 - 10:07am.
I think Romney's Bain "problem" just went away for the general election, if he wins the Republican nomination. The president appointed a Bain executive to the new director of OMB.
http://campaign2012.washingtonexaminer.com/blogs/beltway-confidential/ne...
So the dim's want to
Submitted by Captain Repus on Wed, 01/18/2012 - 10:51am.
So the dim's want to eliminate the Capital Gains Tax and tax all income at the maximum income tax rate. Ok, run on that platform.
A solution:
Submitted by c5then on Wed, 01/18/2012 - 11:27am.
Everyone pays the EXACT same rate on all income no matter the source with no (nada, zip) deductions or credits. This of course includes corporations.
12% out to do it if we eliminate all the unconstitutional departments and agencies.
OMG!!!! What will the democrats and the liberal media do when they can't generate bogus class envy and jealousy???!!!
Madison and Jefferson and Franklin built a Republic - Roberts killed it!
⇒ The Texas model
Submitted by Cool Arrow on Wed, 01/18/2012 - 11:32am.
Although we don't have a State Income Tax, we do have a sales tax of 6.25%. I honestly don't hear too many people complaining about it and everybody, rich or poor, pays it.
Division
Submitted by Unsane on Wed, 01/18/2012 - 11:38am.
I like the idea of a division of taxation: the feds charge everyone, regardless of income, a 17% income tax which falls automatically to 10% when the national debt hits zero. The states charge sales taxes (and whatever other taxes they come up with), and that's it.
No one much complains about the sales tax because it is low; at least the TX share is. Municipalities get to charge some on top of it which means typically in TX you pay a combined rate of about 8.25-8.5%.
"CONSUMED DEMOCRACY RETURNS A SOCIALIST REGIME" - Slayer, "Fictional Reality", from Divine Intervention (1994)
⇒ I like it too
Submitted by Cool Arrow on Wed, 01/18/2012 - 3:05pm.
Americans should be too busy to concern themselves with the intricacies of our current tax system. The answer is simplification.
My admiration of the sales tax is that I can choose how much I wish to pay in taxes.
Really?
Submitted by Unsane on Wed, 01/18/2012 - 8:40pm.
You can with the income tax too.
"CONSUMED DEMOCRACY RETURNS A SOCIALIST REGIME" - Slayer, "Fictional Reality", from Divine Intervention (1994)
All I can say is...
Submitted by Scrap Iron in Texas on Wed, 01/18/2012 - 11:57am.
So what?
If you don't like the tax code as written, GET RID OF IT.Now, we still have a federal government to fund, and that pesky $16 TRILLION debt that MUST be repaid, and the best solution I have found is the Fair Tax.
You want a "fair" system, one that treats ALL citizens equally?
That would be the Fair Tax.
You want to encourage investment and job creation?
That, too, would be the Fair Tax.
Get more information at fairtax.org
Bad idea
Submitted by Unsane on Wed, 01/18/2012 - 8:47pm.
Here's the information you need on the Unfair Tax:
I pay 8.25% in sales taxes. The Unfair Tax raises that to 31.25% on everything I buy. Even TX has the sense to exempt groceries. The Unfair Tax does not.
I don't know how investment and job creation can happen when the Unfair Tax will cause people to slam their wallets shut.
Oh, but we are supposed to feel better because to make up for it, the government will dish out allowance money (the so-called "prebate check") to everyone in America to cover what IT considers as the "essentials". And the government, in their infinite wisdom, will determine how much people will get in allowance money.
So, I get to throw out a crappy tax code, just to replace it with the absolute most regressive tax regime on offer, paired with a system of transfer payments. No thanks.
Make the income tax 17% across the board until such time as the national debt is paid off in full, then lower the rate to 10%. And put that in the Constitution to prevent Congress from constantly tinkering with the tax code, tinkering which had led us to the morass the tax code currently is!
"CONSUMED DEMOCRACY RETURNS A SOCIALIST REGIME" - Slayer, "Fictional Reality", from Divine Intervention (1994)
RINO joe
Submitted by angelann1 on Wed, 01/18/2012 - 12:23pm.
He is a huge disappointment!!!
Ok...
Submitted by retrocon on Wed, 01/18/2012 - 12:27pm.
First, people like Romney have "administrative assistants" and not secretaries, usually.
A senior admin could easily earn 80k to 120k a year, depending on how "important" their boss is.
Second, this doesn't matter. Romney advocated 28% in the debate, but he pays 15%, he was stupid to say 28%, he should be called on it.
With every debate, i am favoring Newt a little more.
called on taxes
Submitted by Agnostic on Wed, 01/18/2012 - 2:58pm.
As all things in politics it just isn't simple enough to explain with a bumper sticker. You pay 38% on your income then invest what the government lets you keep and the return on that investment is taxed at 15%. The truth lies somewhere in between but the media have a horse to beat so stand back and forget any real explainations.
Not to mention the tax breaks like EIC and others.
Submitted by drsamherman on Wed, 01/18/2012 - 2:54pm.
The earned income credit (EIC) and certain other deductions are available to lower wage taxpayers, in many cases resulting in income tax "refunds" larger than they ever paid in the first place. Granted it is not a fortune, but when you almost half of the population paying no income tax whatsoever, then all of these idiots who want to raise income taxes really don't have much to say about that.