There was more tax-hike propaganda from the New York Times on Wednesday's front page, as reporters Nicholas Confessore and David Kocieniewski matched President Obama's campaign strategy by taking an obsessively detailed look at Mitt Romney's recently released tax returns while suggesting the findings bolstered Obama's argument that the rich are undertaxed: 'For Romneys, Friendly Code Reduces Taxes [1].'
There was even a small photo of the top of Romney's tax return included in the story, which was tucked under Wednesday's lead story - Obama's State of the Union address - in a manner suggesting the two were linked.
Mitt Romney and his wife, Ann, made $27 million in 2010. They held millions of dollars in a Swiss bank account and millions more in partnerships in the Cayman Islands. His family's trusts sold thousands of shares in Goldman Sachs that were offered to favored clients when the storied investment house first went public. The couple's effective federal tax rate for the year worked out to 13.9 percent, a rate typical of households earning about $80,000 a year.
Yet the hundreds of pages of tax documents released by Mr. Romney's campaign on Tuesday morning did not readily reveal any elaborate financial legerdemain or exotic tax shelters. What Mr. Romney's returns illustrated, instead, was the array of perfectly ordinary ways in which the United States tax code confers advantages on the rich, allowing Mr. Romney to amass wealth under rules very different from those faced by most Americans who take home a paycheck.
Those differences leapt to the front of the national debate on Tuesday when President Obama - whose family's income was less than a tenth of Mr. Romney's in 2010 but whose effective federal rate was double - called for higher taxes on the wealthy in his State of the Union speech.
The couple paid about $3 million in federal taxes on an adjusted gross income of $21.6 million, the vast majority of it flowing from myriad of stock holdings, mutual funds and other investments, including profits and investment income from Bain Capital, the private equity firm Mr. Romney retired from in 1999.
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And like most of the wealthy, the Romneys paid only a tiny sliver of their income in payroll taxes, which cut heavily into the weekly paychecks of wage earners but is barely a blip on the returns of the rich. While payroll taxes eat up 6 percent of the income of Americans earning the national median income of $50,221, Mr. Romney and his wife paid just one-tenth of 1 percent of their income in payroll taxes.
The MRC's Brent Baker [2] Tuesday rebutted the premises of the liberal storyline about Romney's taxes, as advanced by the Times and other media outlets:
In fact, Romney pays at a much higher rate than most Americans and most people at Romney's wealth level pay a significantly higher rate....[ABC reporter] David Muir failed to point out how that rate (estimated to be closer to 15 percent for 2011) is far greater than most Americans pay. As NewsBusters's Noel Sheppard noted last week, after accounting for deductions, 97 percent pay an income tax rate lower than 15 percent – a number confirmed in this table [3] posted by the liberal Tax Policy Center.