Mitt Romney says “every year I’ve paid at least 13 percent [of my income in taxes] and if you add in addition the amount that goes to charity, why the number gets well above 20 percent.”
This is supposed to be in defense of not releasing his tax returns.
Assume, for the sake of the argument, he’s telling the truth. Since when are charitable contributions added to income taxes when judging whether someone has paid his fair share?
More to the point, Romney admits to an income of over $20 million a year for the last several decades. Which makes his 13 percent — or even 20 percent — violate the principle of equal sacrifice that lies at the core of our notion of tax fairness.
Even Adam Smith, the 18th century guru of free-market conservatives, saw the wisdom of a graduated tax embodying the principle of equal sacrifice. “The rich should contribute to the public expense,” he wrote, “not only in proportion to their revenue, but something more in proportion.”
Equal sacrifice means that in paying taxes people ought to feel about the same degree of pain regardless of whether they’re wealthy or poor. Logically, this means someone earning $20 million a year should pay a much larger proportion of his income in taxes than someone earning $200,000, who in turn should pay a larger proportion than someone earning $50,000.
But Romney’s alleged 13 percent tax rate is lower than that of most middle class Americans who earn a tiny fraction of what he earns.
At a time when poverty is increasing, when public parks and public libraries are being closed and when public schools are shrinking their offerings and their hours, when the nation’s debt is immense, and when the 400 richest Americans have more wealth than the bottom 150 million of us put together — Romney’s 13 percent is shameful.
I’m pretty sure I’ve discussed here before that my tax rate runs somewhere near 30% when you look at federal and state income taxes. Nearly a third of my income goes to the government. My husband and I make very good money. Not Mitt Romney money, but we’re at the bottom end of the upper 5% in terms of household income. We are very fortunate, and for the most part, it doesn’t bother me that upward of $30,000 of our combined paychecks goes to the government.
However, when I hear that someone with the kind of money that Mitt Romney makes only has a 13% tax rate… Do you know what a 13% tax rate would mean for my family? That would be an extra $20,000 a year. There are so many things I would do with an extra $20,000/year. Pay off my car and half of my husband’s car. Pay off the rest of my student loans. Pay off a third of my husband’s student loans. I could actually have a second child and afford the childcare. Or I could start a really sizable college fund (and if the cost of college keeps going at the rate it’s going, it’s going to cost me $300,000 to send Isla to the same public, 4-year university I attended.)
I try to imagine what that difference would mean if we were talking an income of $20 million/year. That’s $3.4 million Mitt Romney weasels out of every year with dressage horses and god knows what else to lower his tax rates. If he were paying the same tax rate I do, he’d be $3.4 million poorer every year. And that would be a drop in the bucket for him. That’s nearly 30 times what I make in a year.
So why, when I pay 30% a year and make far, FAR less money, should I feel like Mitt Romney is paying his fair share? And why on earth, when he’s not paying his fair share, should I give any credence at all to his whining about how little people who make far, FAR less than I do pay into the system?