After a week of attacking Romney on taxes – for not releasing his own tax returns for more years, and for supporting tax breaks on millionaires – both the Obamas and the Bidens released their tax returns to the public late last week.
Obama has been a long-time proponent of tax reform and has recently proposed the “Buffett Rule” to ensure that the wealthiest Americans pay at least 30% of their income in federal taxes. However, the legislation was shot down by Senate Republicans last Monday. The proposal takes its name from billionaire Warren Buffett’s complaint that his secretary pays a higher tax rate than he does.
But then again, so does Obama’s.
In 2011, the Obamas paid $162,074 in federal taxes on an adjusted gross income of $789,674. Half of this income comes from the president’s salary, and the other half comes from the President’s book sales. This translates to a tax rate of approximately 20.5%. So, yes, he does pay a lower tax rate than his secretary, but that is precisely why, the Obama camp argues, that we need to reform our tax code.
However, the president’s income has declined significantly (by almost $1 million) from last year, effectively knocking him out of the millionaire’s bracket that would make the Buffet Rule apply to him.
The White House has also released the Obamas’ tax returns from the last 10 years on its website. You can check out the Obamas’ full tax returns here.
The Bidens, too, released their tax returns. This past year, they reported an adjusted gross income of $379,035 and paid $87,900. This translates to a tax rate a little over 23%.
You can check out the Bidens’ full tax returns here.
Romney, on the other hand, has filed for a six-month extension on his tax returns, something his campaign assures is routine.
In January, Romney released his 2010 tax returns and estimates for his 2011 returns after pressure from his then Republican competitors. His estimates for 2011 showed that he earned approximately $21 million and paid about $3.2 million in federal taxes. This translates to tax rate of 15.3%.
To put this into perspective, most taxpayers pay around a 35% tax rate.
The Obama camp, though, is pushing for Romney to release not only last year’s tax returns, but a number of his previous tax returns as well – from when he was governor of Massachusetts, or an executive at Bain Capital, repeatedly asking, “What does he have to hide?”
But Romney claims he needs the extension, because some of the companies he has invested in haven’t reported their earnings, and so therefore he can’t calculate his actual income.
There is something to be said about the American tradition of complete disclosure. Even Nixon in 1952 disclosed his full finances to the public. This isn’t something new, but why do we as the public demand it? Because when candidates disclose information about their lives, they feel more real – more like us.
So, rest assured: Even though Romney hasn’t released his tax returns yet, he will. Even if his millionaire status might hurt him in the end.