Mitt Romney is paying ... too much in taxes?
- In 2011, Romney earned $14 million, mostly from investments that are taxed at a lower, preferential rate. He also gave a very large amount of money to charityâ€”more than $4 million. So, thanks to the charitable deduction in the tax code, he was technically allowed to reduce the amount of income subject to the income tax even further.The trouble is, if Romney did that, he would have ended up paying less than 13 percent of his income in federal taxes (back-of-the-envelope calculations suggest the amount would have likely been somewhere around 9 to 11 percent). That would have conflicted with his statement in August that he has paid at least 13 percent the past ten years. So Romney opted to limit his charitable deduction to just $2.25 million, essentially agreeing to pay the government more in taxes than he needed to. In the end, Romney had an effective federal tax rate of 14.1 percent.Thereâ€™s nothing wrong with voluntarily donating a bit more to reduce the federal deficit. Although there is this awkward quote from Romney during a primary debate in January: â€śI pay all the taxes that are legally required and not a dollar more,â€ť he said. â€śI donâ€™t think you want someone as the candidate for president who pays more taxes than he owes.â€ť