Adriene Hill: After a whole lot of back and forth on the campaign trail, Republican Presidential Candidate Mitt Romney has released his tax returns.
We asked Marketplace’s Jennifer Collins to run the numbers and give us a little perspective.
Jennifer Collins: Mitt Romney’s returns show he makes more than $20 million a year. That means he could fall into the highest tax bracket: 35 percent. But because much of his income comes from investment, he’s paying about $3 million a year, which brings his effective tax rate to… about 15 percent. Sounds low, but it actually may be higher than you and I pay. And that’s because taxes are complicated. The tax bracket you fall into doesn’t always tell the whole story. Because of nuances in the tax code, the effective rate is a better reflection of what we pay than the tax bracket.
Chris Bergin is with the news and analysis nonprofit Tax Analysts.
Chris Bergin: I pay a larger effective tax rate now than I did when I was starting out as a young editor writing about tax. I earn more income. I think that’s fair.
The Tax Foundation says the average person pays an effective tax rate of 11 percent. Still Bergin says many will find Romney’s tax burden too light.
Bergin: This is a self-inflicted wound. I’m not so sure it heals with just what he’s releasing. I’m sure he’s hoping it is.
And Romney is still paying lower taxes than the average millionaire. The Tax Foundation says most of them pay around 25 percent.
I’m Jennifer Collins for Marketplace.