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Wednesday, August 15, 2012

Mitt's Millions

            In recent months much has been made over Mitt Romney’s vast wealth and whether he pays taxes. I’m not kidding.

First of all, do you think for one minute that a man who garners the sort of eight-figure income that Romney does is not high on the target list at the IRS? Mr. Harry Jacobson, writing for Forbes Magazine, points out what those who are considered to be rich pay in taxes in a given year. Let’s look at the numbers. Using data from the Internal Revenue Service in 2009, the top 1% of earners, including individuals with incomes of $343,927 or greater, represented 16.9% of all income and paid 36.7% of all federal taxes. Their average tax rate was 24.01%. The top 0.1% who had incomes of $1,432,890 or greater represented 7.8% of all income and paid 17.11% of all taxes. Their average rate was 24.3%.”

The top 1% of those who earn income in the United States of America pay close to 37% of federal taxes. The class warfare mantra is that the wealthy do not pay their fair share of taxes. On the surface this is laughable. It is because of the very wealthy that the United States has enjoyed such an amazing level of productivity and business growth. As I mentioned in a previous article, you don’t get a job from a poor person.

Mr. Jacobson further elaborates, “The average tax payer in the top 0.1% of all earners (the group which includes the vast majority of millionaires and billionaires) pays a tax rate over four (4) times that of an average secretary.” Mr. Romney is squarely in this category.

“I pay all the taxes that are legally required and not a dollar more.” Romney said earlier this year. “I don't think you want someone as the candidate for president who pays more taxes than he owes.” Good point!

The attempt by his opponents is to paint Romney as a man who is not being honest in his financial dealings. It has been reported that he has accounts in Switzerland and the Cayman Islands, implying that he’s avoiding paying taxes on this money. The truth is he has declared these monies and is not avoiding paying taxes.

Admittedly, Mr. Romney is fabulously wealthy. You and I could not even begin to appreciate just how much money this man has made in his life. However, I remember as a kid growing up that part of the American Dream was to get an education, work hard and you might just become a millionaire some day. It was the classic Horatio Alger story. Alger was born on January 13, 1832 and died July 18, 1899. “He was a prolific 19th-century American author, best known for his many formulaic juvenile novels about impoverished boys and their rise from humble backgrounds to lives of middle-class security and comfort through hard work, determination, courage, and honesty.” This story of “rags-to-riches” used to be touted as the model for success, and people would applaud the hard work and grit of such an individual. When did it become wrong in the United States for a person to succeed and prosper?

Now here’s the kicker. “When Mr. Romney, a multimillionaire and presidential candidate, revealed that while he reported he made $42.5 million over the past two years (2009-2010), he also gave away $7 million.” That, my friends, is 17% of his income which he chose to give to charitable organizations. Putting that another way – For every six dollars he made, he gave one dollar to a charity. Just as a counter-point, Vice President Joe Biden and his wife had a combined income of $380,000 in 2011. On the latest return, the Biden’s listed $5,540 in donations to charity.” Ummmm, this means the Biden’s gave away 1½ percent to charity. The Obama’s made over $2.6 million in 2005-2006. Their charitable giving was $138,000. That figures out to 5% of their income being donated to charitable organizations.

It is interesting to see what organizations the Romney’s support. They have been Mormon’s for several generations, and Mitt has been very involved in the leadership of his church. Practicing Mormons are expected to tithe 10% to the church, officially known as the Church of Jesus Christ of Latter-Day Saints. So that’s an automatic. Besides this, in 2010 the largest beneficiaries of the Tyler Charitable Foundation (a trust fund established by the Romney’s) included the Friends of George W. Bush Library, and the Center for Treatment of Pediatric MS (Multiple Sclerosis). However, the foundation also made contributions to organizations including the US Equestrian Team Foundation, Harvard Business School, and Homes for Our Troops. In past years, some of Romney’s contributions have gone to conservative groups such as the Heritage Foundation, the Becket Fund (for religious rights legal aid), and the Federalist Society, which seeks reform of the current legal system. In 2007, he wrote a check to Citizens for Limited Taxation, a Marblehead, Massachusetts organization that strives to limit taxes and the size of government.”

So let me conclude by asking some questions. Does Romney make a lot of money? Without a doubt. Does he pay his taxes? Certainly. Does he give to charities? Unquestionably. So ignore his opposition’s flailing (and failing) attacks which call to question his financial ethics. Armed with the facts, you can see through the smoke and mirrors.

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