Now that Mitt Romney has a good shot at becoming the next President of the United States, it seems time to give his tax returns a good read.
After all, Mitt Romney is an unusual Presidential candidate, in that he is totally loaded. (Not just rich--loaded).
And unlike some loaded people who run for office, Mitt Romney isn't just living off of a massive stash of cash he made long ago. Yes, Mitt Romney has a massive stash--most estimates put it in the neighborhood of $250 million--but he's also hauling in more year after year after year.
When Mitt Romney's tax returns were first released during the primaries, everyone focused on the top and bottom lines: How much money Mitt Romney made--and how little (on a percentage basis) he paid in taxes.
In the accompanying interview, my colleague Aaron Task and I discuss Romney's effective tax rate when it was released in January with for former investment banker Bill Cohan.
(Romney's return, incidentally, looks just like any other tax return, except that it's 232 pages long. And also the numbers are huge.)
And before we jump into the numbers, one observation/question:
Romney's private-equity firm, Bain Capital, was extraordinarily successful, no doubt about it. But the amount of money Romney made running the firm appears huge even in light of that success, especially when you consider that he was only there for 15 years. Given that Romney may well become President of the United States, it would be helpful to know exactly how Romney made all this money, year by year, deal by deal.
We'll be reading Mitt Romney's tax return for a while. We'll toss out interesting nuggets as we find them. In the meantime, here are the top and bottom lines:
The top line: $21.7 million of income
The bottom line: $3 million of tax
Now, $3 million is a lot of taxes.
$3 million, in fact, is more tax than most people will pay in their entire lives.
But it's also only 14% of what Mitt Romney made in 2010.
14% is a lot lower than the 35% tax bracket that most people assume those who make a lot of money pay.
It's also lower than the 15% capital gains and dividends tax rate.
It's also lower than the 15% income tax rate paid by Americans who make between $8,500 and $34,500 per year.
So, you can understand why some people think Mitt Romney pays a pretty low tax rate.
And you can understand why some people wonder how it is, exactly, that Mitt Romney pays such a low tax rate--and where and how he has stashed all of his money.
More to come as we read on...