Speaking earlier today, Mitt Romney fessed up to the fact that he doesn’t want to release his tax returns because he pays an embarassingly low tax rate. But it’s pretty well known that many economists and basically all conservatives think investment income should be taxed at a lower rate than labor income. I think the real news Romney made is that he lacks perspective on what constitutes “not very much” income:
“What’s the effective rate I’ve been paying? It’s probably closer to the 15 percent rate than anything,” Romney, a GOP presidential candidate, said. “My last 10 years, I’ve — my income comes overwhelmingly from some investments made in the past, whether ordinary income or earned annually. I got a little bit of income from my book, but I gave that all away. And then I get speaker’s fees from time to time, but not very much.”
It turns out that Romney “collected more than $360,000 in speaking fees from such companies as Barclay’s Bank and Goldentree Asset Management over a 12-month period ending last year, according to his financial disclosure filing.” To put that in perspective, that’s over 7.2 times the median household income in the United States. If you earned over $360,000 last year and lived in the richest county in America, you’d be earning about triple the local median household income. You would be, in other words, a rich person even if you didn’t have any investment income, hadn’t made a fortune in your earlier career, and weren’t only a part-time income earner who was mostly focused on his presidential campaign. I think it’s lame to criticize politicians for being “out of touch,” but it suggests an unfamiliarity with important, policy-relevant, and not-particularly-obscure economic statistics for Romney to characterize this as “not very much” income
