Romney’s Low Tax Bracket Irks Americans

The Republicans and their beloved money: Mitt Romney admitted that he is in the 15 percent tax bracket — clearly a lower rate than is paid by a majority of Americans. He calls what he earned in speaking fees, over $370,000, “not very much.” In the run-up to the South Carolina primary election a debate is taking place within the Republican party: Can a man with that much wealth represent the interests of the average citizen?

President Obama’s advisors have it easy right now. They need not deliberate for very long on how to attack Mitt Romney in a general election. The Republicans themselves are handing them the issue on a silver platter: Romney’s unexplained relationship with money.

The multimillionaire admitted to journalists in South Carolina that he was in the 15 percent tax bracket — clearly lower than most Americans. He also augmented his fortune with speaking fees for which he said he earned “not very much.” What he didn’t disclose was that those honoraria amounted to more than $370,000. Many Americans would likely consider that “very much.”

His remarks served to fuel the debate about his fortune, with Democrats saying that the wealthy Republican isn’t able to represent the concerns of the average American citizen. In December, Romney publicly offered to bet fellow Republican candidate Rick Perry $10,000, something that critics say shows how reckless he is with money.

Now Rick Santorum, his arch-conservative opponent, has accused him of profiting from tax loopholes introduced by George W. Bush that are favorable to investors. In America these earnings are taxed at a rate of 15 percent, while income earned from jobs is taxed at rates up to 35 percent.

Romney, whose net worth if estimated to be about $250 million, has thus far been reticent to reveal details of his income. Under continued pressure, he recently agreed to release his tax returns for 2011 — but not until April when they are in their final form. That’s not quickly enough for his Republican opponents: If Romney wins in South Carolina, the party’s nomination will probably be his.

Newt Gingrich said if he were a South Carolina resident he’d be asking himself why Romney doesn’t want anyone to know anything about him and why he would wait until after the people had voted to reveal anything. Analysts at Real Clear Politics show Romney at 32 percent among South Carolina voters and at 34 percent nationally. Gingrich, meanwhile, stands at 22 percent in the state and around 15 percent nationally. Rick Santorum comes in at 14 percent in both.

The weeks-long discussion about Romney’s past as a co-founder of Bain Capital Management, a firm that made its money using vulture capitalism tactics has not damaged the Republican candidate much thus far. According to The New York Times, however, the tax issue could prove to be enough to cement Romney’s image in the center of the growing national debate about income inequality.

Much of the U.S. media is outspoken about Romney’s privileged position in the 15 percent tax bracket. On average, America’s top earners in 2009 had to pay 24 percent of their earnings in taxes according to The Washington Post. In 2010, the Obamas paid around 26 percent in taxes.

Accordingly, the White House is taking the self-confident position that Romney’s 15 percent status is proof of the unfairness of the tax code. Jay Carney said everyone should be paying their fair share, adding, “That includes millionaires who might be paying an effective tax rate of 15 percent when folks making $50,000 or $75,000 or $100,000 a year are paying much more.”

At the height of the Occupy Wall Street protests, the Obama camp made it clear that it intended to make social inequality issues a focal point of their reelection campaign. This will be easier to do if Romney is the Republican nominee since he has already promised to do away with the capital gains tax and taxes on investments in general. As a wealthy person able to live off the interest of his investments, Romney would profit hugely from such tax policies.