Friday, September 21, 2012

Mitt Romney's Tax Issue Just Went Away

I always thought this was a stupid issue and in many ways it was a trap.  The Democrats worked themselves into a tizzy saying that Romney is some sort of greedy tax cheat.  Instead there doesn't seem to be anything wrong with his taxes (nor was there a problem for the last 20 years) and if you figure in his generous charitable donations, his average effective tax + charity rate is almost 40%.  That's a pretty amazing number.  Sure you could argue that maybe his effective tax rate should be higher. However, given that the needy are better served by charitable donations rather than inefficient government organizations, the needy were helped more by Romney giving to charity instead of to government.  Anyway, here are the highlights:

Regarding the PWC letter covering the Romneys' tax filings over 20 years, from 1990 – 2009:

  • In each year during the entire 20-year period, the Romneys owed both state and federal income taxes.
  • Over the entire 20-year period, the average annual effective federal tax rate was 20.20%.
  • Over the entire 20-year period, the lowest annual effective federal personal tax rate was 13.66%.
  • Over the entire 20-year period, the Romneys gave to charity an average of 13.45% of their adjusted gross income.
  • Over the entire 20-year period, the total federal and state taxes owed plus the total charitable donations deducted represented 38.49% of total AGI.

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