President Barack Obama's campaign and much of the media is trumpeting the “fact” that Mitt Romney’s tax rate is lower than the average American’s.
But that’s not necessarily a fact, FoxNews.com
, calculates. It holds true only when both income and payroll taxes are included. Romney is charged very little in payroll taxes, as he derives almost all his income from investments. His effective tax rate was 14.1 percent in 2011.
The Obama estimate that Romney’s rate is lower than the average American’s also doesn’t take into account deductions and other tax benefits.
When all this is taken into consideration, Romney’s effective rate actually dwarfs that of most Americans.
Someone with income between $50,000 and $75,000 on average paid an effective rate of 7.8 percent in 2010, according to the IRS. And even those making between $100,000 and $200,000 paid a 12.1 percent rate.
The Obama campaign makes a big deal that Romney pays a 15 percent tax rate on his investments, which account for the bulk of his income, while Americans with a full-time job pay up to 35 percent on their ordinary income.
But that 35 percent figure shrinks sharply once deductions and exemptions are included. Indeed, the Tax Foundation estimated in January that Romney's rate 14 percent rate in 2010 exceed that of 97 percent of Americans.
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