# Mitt's Average vs. Effective Tax Rate...

#### mshan

##### Diamond Member
"That 20 percent figure sounds a lot better than 13 or 14 percent, right? Well, here&#8217;s the problem: It all turns on how that 20 percent figure was calculated.

Roberton Williams, a senior fellow at the nonpartisan Tax Policy Center, tells me there are two ways to calculate it.

First, the campaign could simply have averaged the rates against each other &#8212; treating the rates themselves as a collection of individual numbers &#8212; to calculate the overall average rate.

The second way to calculate it would be to add up all the income Romney earned over the 20 years, add up the total amount he paid in taxes during that period, and calculate the overall average rate paid that way.

The Romney campaign confirmed to me just now that the 20 percent figure was calculated the former way &#8212; it represents an average of the rates themselves.

Williams tells me that this is a far less meaningful way to calculate the overall rate than the second way, which actually calculates the real tax rate Romney paid over the period.

Here&#8217;s why: The first way obscures the fact that income may have fluctuated quite markedly from year to year. If Romney paid his lowest rates in a number of the higher income years, the overall 20 percent figure would overstate the rate he actually paid over the whole period. Williams provided the following purely hypothetical example:

&#8220;Let&#8217;s say you have 10 years in which you paid 13 percent in taxes, and 10 years in which you paid 27 percent,&#8221; Williams told me. &#8220;If you average those rates, you&#8217;ll get an overall rate of 20 percent. But if the 13 percent years were high income years, and the 27 percent years were low income years, then his total taxes paid as a share of total income over the 20 years would be less, perhaps significantly less, than 20 percent.&#8221;

Yet in that scenario, the Romney campaign would be claiming, by its chosen metric, to have paid 20 percent.

How realistic is it that Romney could have had far higher income some years than others?

&#8220;You can be a person like Romney and have a highly fluctuating income year to year,&#8221; Williams said. &#8220;Some years Romney&#8217;s income could be much lower than in other years. When you average just the rates, you can distort the rate you&#8217;ve paid relative to your income over the whole period.&#8221;

Williams concluded: &#8220;The only way we can know for sure what rate he actually paid is to see what his tax payment and his income was for each of the 20 years.&#8221;

http://www.washingtonpost.com/blogs/plum-line/post/expert-romney-may-have-paid-less-in-taxes-over-20-years-than-it-appears/2012/09/21/41b27e00-041e-11e2-91e7-2962c74e7738_blog.html

Amazing how anything Romney's says doesn't even hold up to the slightest bit of real scrutiny or thoughtful analysis...

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#### Anarchist420

##### Diamond Member
What if there had been no 16th Amendment (if you know what I mean)?

#### mshan

##### Diamond Member
Oh, and the tax deductions he didn't take in 2011 to keep his rate above 14%.

Well, a talking head on tv said Mitt the Twit can go back and later amend his 2011 tax return to claim those tax deductions he didn't take now...

:sneaky:

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#### Anarchist420

##### Diamond Member
Oh, and the tax deductions he didn't take in 2011 to keep his rate above 14%. Well, a talking head on tv said Mitt the Twit can go back and later amend his 2011 tax return to claim those tax deductions he didn't take now...
Didn't he pay corporate tax though? Does that boost his rate enough for you liberals (since absolute dollar amounts aren't enough to make you happy)?

Don't get me wrong, I think liberals are either being hypocrites or stupid by continuing to promote higher top marginal income tax rates like it's going to reduce inequalities in wealth... Adams and Jefferson (but not Tax the poor Whiskey farmers to make me richer Washington) were much more progressive/pro-soak the rich than today's liberals on govt revenue collection. Hell, Adams and Washington (although not the proto-Austrian/proto-Jacksonian economist Jefferson) were much more radical in their day as far as spending goes than Obama is today.

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#### mshan

##### Diamond Member
Ah, yes, the minds of fools and their simplistic labels...

It's like Chris Christie's us or them speech at the RNC.

Either party, when controlled by wingnut extremist outliers of their party, would vigorously defend and vote for Adolf Hitler as long as he was the officially sanctioned candidate that their party leaders put forward to them.

(and for the record, I am not a liberal. I don't like such simplistic and sweeping generalizations, but if I had to pidgeon hole myself, it would be as an Obama-ican or moderate Republican, or probably more precisely, as an Independent / pragmatic centrist. Economic issues are much more important to me than social ones, but I do support greater equality and a more level playing field for everyone whenever possible).

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#### Anarchist420

##### Diamond Member
Either party, when controlled by wingnut extremist outliers of their party, would vigorously defend and vote for Adolf Hitler as long as he was the officially sanctioned candidate that their party leaders put forward to them.
Well then be glad for Romney.
(and for the record, I am not a liberal. I don't like such simplistic and sweeping generalizations, but if I had to pidgeon hole myself, it would be as an Obama-ican or moderate Republican, or probably more precisely, as an Independent / pragmatic centrist. Economic issues are much more important to me than social ones, but I do support greater equality and a more level playing field for everyone whenever possible).
If they had taken 100% of Romney's income for the past 10 years, then what good would it have done for you or for anyone else? Would it really have made any poor people better off in the long run? Why should Romney be forced to give his salary away so the govt can protect and bailout more corporations?

#### cybrsage

##### Lifer
The old "cause I demand to see his returns" loonie returner reason. Boooring!

#### mshan

##### Diamond Member
That's not the point.

Romney appears to be deliberately distorting his effective tax to create the impression he paid a higher effective tax rate than it sounds he did.

His press releases says "owes", not "paid"

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#### shira

##### Diamond Member
Another grossly-dishonest aspect of this "20-year-average" tax rate is that from 1990 through 1997 (8 of the 20 years), the maximum long-term capital gains rate was 28%. And from 1998 through 2003 (another 6 years), the maximum long-term capital gains rate was 20%. It's clear from Romney's 2011 return that a high percentage of his income comes from long-term capital gains and qualified dividends, both of which are taxed at the capital gains rate. So presumably most of his income from 1990 through 2003 was also taxed at the maximum capital gains rate.

So of course Romney's "average" is going to be 20%: If almost ALL of his income for 8 years was taxed at the 28% rate and almost ALL of his income for another 6 years was taxed at 20%, then (using Romney's own, dishonest "averaging" method) the ONLY way his average rate could be as low as 20% over the entire 20 years would be if his average rate the past 6 years has been 10%.

Romney is a total slime-ball.

#### mshan

##### Diamond Member
"If almost ALL of his income for 8 years was taxed at the 28% rate and almost ALL of his income for another 6 years was taxed at 20%, then (using Romney's own, dishonest "averaging" method) the ONLY way his average rate could be as low as 20% over the entire 20 years would be if his average rate the past 6 years has been 10%. "
LOL, as Bill Clinton said in a different context, it's arithmetic, simple arithmetic...

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##### Diamond Member
Oh, and the tax deductions he didn't take in 2011 to keep his rate above 14%.

Well, a talking head on tv said Mitt the Twit can go back and later amend his 2011 tax return to claim those tax deductions he didn't take now...

:sneaky:
Which is what he will be doing the day he loses the election. We're talking about a lot of money here, at least to po' folk like me.

#### HomerJS

##### Lifer
Fox News will only be talking about the 20% this weekend, nothing else.

#### Budmantom

##### Lifer
Did anyone see how much he gave to charity and did anyone see how much Obama gave to charity?

Lets do what democrats like to do a "thoughtful analysis..."

#### Herr Kutz

##### Platinum Member
"That 20 percent figure sounds a lot better than 13 or 14 percent, right? Well, heres the problem: It all turns on how that 20 percent figure was calculated.

Amazing how anything Romney's says doesn't even hold up to the slightest bit of real scrutiny or thoughtful analysis...

WTF? Being taxed 13 or 14 percent sounds a lot better than 20 percent to me. Whoever wrote that article is a f*cking retard.

#### Budmantom

##### Lifer
WTF? Being taxed 13 or 14 percent sounds a lot better than 20 percent to me. Whoever wrote that article is a f*cking retard.
This is democrat speak, someone else paying higher taxes is always better..... just don't look for honest tax payers at the White House.

#### Budmantom

##### Lifer
thoughtful analysis...

Did Barrack Hussein Obama get a paycheck while he was "working" as a senator? he was really he was campaigning for the last 2 years of his long career?

#### sportage

##### Diamond Member
Issue isn't his 2011 taxes. He knew then he was running for prez.
The issue are those before years when he was not running.
The years he refuses to release.
Hmmmmmm.

But who cares about taxes or 14%, 5%, =0= % ....?

What "I" want to know is which of one of Sheldon Adelson's mob tried to sabotage the Romney aircraft?
Could it be Sheldon is getting a little irritated at the return rate on his Romney investment?
Watch your back Mittens. These guys expect heavy payback, not screw ups.
Especially at this stage of the game...

#### Budmantom

##### Lifer
Issue isn't his 2011 taxes. He knew then he was running for prez.
The issue are those before years when he was not running.
The years he refuses to release.
Hmmmmmm.

But who cares about taxes or 14%, 5%, =0= % ....?
Democrats care about taxes.... not their own of course, they like to look at them thoughtfully but nothing is as thoughtful as charity. Am I right?

"From 2000 through 2004, they(Obamas) reported giving a total of \$10,770(to charity), or less than 1% of the \$1.2 million they earned during that period."

I agree when people aren't under the microscope they could care less....less than 1%..... really.... this doesn't sound thoughtful.

#### her209

##### No Lifer
LOL now even arithmetic has a liberal bias.

#### HomerJS

##### Lifer
Democrats care about taxes.... not their own of course, they like to look at them thoughtfully but nothing is as thoughtful as charity. Am I right?

"From 2000 through 2004, they(Obamas) reported giving a total of \$10,770(to charity), or less than 1% of the \$1.2 million they earned during that period."

I agree when people aren't under the microscope they could care less....less than 1%..... really.... this doesn't sound thoughtful.
Did it occur to you the Obamas weren't rich all their lives. They earned their living from the ground up. They didn't get wealthy by beginning their careers rounding third base then claiming after crossing home plate, "I did it all on my own" Started in the dugout like the rest of us.

Both of them had hundreds of thousands of dollars in college loand to pay back during that time.

#### Budmantom

##### Lifer
Did it occur to you the Obamas weren't rich all their lives. They earned their living from the ground up. They didn't get wealthy by beginning their careers rounding third base then claiming after crossing home plate, "I did it all on my own" Started in the dugout like the rest of us.

Both of them had hundreds of thousands of dollars in college loand to pay back during that time.
Over 4 years they made 1.2 million dollars and they gave less than 1%..... what happened to giving back to the community? what happened to being your brothers keeper of course that doesn't apply to Obama since his brother lives in a hut.

Yes to democrats giving less than 1% may seem like to much but as we know people make more than \$250k per year can give back so much more, especially if they are thoughtful.

#### Budmantom

##### Lifer
So just to be clear Romney paid all his taxes and he gave to charity MILLIONS more than Obama has every dreamed of and this is not good enough for the leftists.

Romney pays his taxes unlike the ideal rich democrat Warren Buffet who is the poster child for the democrats saying rich people like him should pay more taxes, of course this doesn't include him as he still owes back taxes, like many in the White House.

And the left wants to show their outrage?

#### HomerJS

##### Lifer
Over 4 years they made 1.2 million dollars and they gave less than 1%..... what happened to giving back to the community? what happened to being your brothers keeper of course that doesn't apply to Obama since his brother lives in a hut.

Yes to democrats giving less than 1% may seem like to much but as we know people make more than \$250k per year can give back so much more, especially if they are thoughtful.
If you make 250K per year but owe 500K and up in loans the banker will not give you room to be your brothers keeper so you do what you can.

Maybe if Obama had rich parents he would have done more

#### HomerJS

##### Lifer
So just to be clear Romney paid all his taxes and he gave to charity MILLIONS more than Obama has every dreamed of and this is not good enough for the leftists.

Romney pays his taxes unlike the ideal rich democrat Warren Buffet who is the poster child for the democrats saying rich people like him should pay more taxes, of course this doesn't include him as he still owes back taxes, like many in the White House.

And the left wants to show their outrage?
Actually we don't know that because he only released 2 years that he could retrofit their appearence to run for President. How about releasing some of the ones older then 3 years that can't be amended.

That was George Romney's rationale.

#### Budmantom

##### Lifer
Actually we don't know that because he only released 2 years that he could retrofit their appearence to run for President. How about releasing some of the ones older then 3 years that can't be amended.

That was George Romney's rationale.
Do you and George Romney both wish that he was as transparent as Obama?