Public perception is a silly thing. President Obama and Republican presidential candidate Mitt Romney have both publicly released their 2011 tax returns (estimated in Romney’s case), and the response to each man’s resulting tax liability can best be summarized as:
Obama = 23.4% effective tax rate, man of the people
Romney = 15.4% effective tax rate, scourge of humanity
But the truth is, both men simply played the hand they were dealt, properly reporting their items of income and deduction in accordance with the tax law. Sure, Romney’s income was largely subject to the preferential 15% tax rate currently applied to qualified dividends and long-term capital gains, but that’s no fault of his own; rather, it’s a product of legislation enacted before Romney even became a political figure.
Don’t believe me? Check out this illustrative, interactive flowchart prepared by the geniuses over at the Tax Policy Center, showing exactly why each candidate paid what they paid in federal income tax:
As I’ve written before, you’re certainly entitled to be angry that Romney paid a mere 15.4% tax rate on $21,000,000 of adjusted gross income; just don’t be mad at Romney. His tax rate was not the result of complicated tax planning, he was simply the beneficiary of the nonsensical tax loophole afforded private equity fund managers in the form of “carried interest,” compounded by the 15% rate on certain investment income enacted by President Bush in 2001 and 2003.