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):
Republican presidential candidate Mitt Romney released tax records on Tuesday indicating he will pay $6.2 million in taxes on a total of $42.5 million in income over the years 2010 and 2011.
Bowing to increasing political pressure to provide more detail about his vast wealth, the former private equity executive released tax returns indicating he and his wife, Ann, paid an effective tax rate of 13.9 percent in 2010. They expect to pay a 15.4 percent rate when they file their returns for 2011.
Romney's tax rate is below that of most wage-earning Americans because most of his income, as outlined in more than 500 pages of tax documents, flows from capital gains on investments.
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:
How does Romney's effective tax rate compare to other Americans? The average effective tax rate of American taxpayers is 11%, according to an analysis by the non-partisan Tax Foundation. Millionaires pay about about 25%, the foundation says.
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.
Associate Editor’s note: As you are likely aware, since the financial collapse of 2008, charities and non-profit organizations have seen a sharp reduction in donations. Although the environment has improved, contributions are still nowhere near where they were prior to the recession. Unfortunately, the Media Research Center has not been immune. With this in mind, your support has become more important than ever. With a critical election approaching, the liberal media needs to be monitored 24/7. As we have been predicting for months, the press are willing to do anything to get their beloved politicians elected and/or reelected. As such, we need your help to fight this fight. Any contribution, even $10, is greatly appreciated. Please consider a tax-deductible gift to the Media Research Center to help us battle the liberal media. Thank you.