Jan 23, 2012
When Mitt Romney said that he pays 15% of his income in taxes – about half the rate at which wage earners are taxed – his rivals in the presidential race attacked him.
Romney’s “defense”? That’s how “investment income” is taxed. It’s true – in the past two decades, the White House and Congress, under both Republican and Democratic control, worked together to pass one tax cut after another on “capital gains.”
The accurate name for that type of income is unearned income. While workers face higher and higher taxes on the money they earn from their work, those who make money on money – that is, the rich – pay less and less tax. According to the Congressional Research Service, after-tax income, adjusted for inflation, rose by about 75% for the top 1% from 1996 to 2006, while it dropped by about 5% for the bottom 20%. And the top 0.1% doubled their income.
Yes, Romney, who uses his money to get even richer, needs to be put on the hot seat. But how about the rest of his class – the big industrialists, bankers and “private equity” speculators?