Under the budget plan proposed by Mitt Romney’s vice presidential nominee, Rep. Paul Ryan (R-WI), Romney would have paid an effective tax rate under 1% in 2010, according to an analysis by The Atlantic.
Romney’s 2010 tax rate—he has only released complete information for that year, so it is unclear what his burden would have been in other years—would have come in at a tiny 0.82 percent for the year, far lower than the already low 13.9% rate he actually paid.
That huge drop would come primarily from the Ryan plan’s proposal to eliminate taxes on capital gains, interest and dividends. Romney’s income in 2010 came largely from those sources, so those taxes made up the bulk of the overall effective tax rate on his reported $21.6 million income.
Romney would also enjoy the Ryan plan’s reduction in the marginal tax rate from 35 to 25 percent which, in conjunction with other measures like eliminating the Alternative Minimum Tax, would drop his effective tax rate down under one percent.
That finding comes amid allegations made by Sen. Harry Reid (D-NV) that Romney paid zero taxes for a decade. While that claim is highly suspect, both stories yet again bring a caricature of Romney as a wealthy, perhaps tax-dodging businessman back to the forefront of the election—and based on recent polls, attacks labeling Romney as such appear to be working.
Romney has said in the past that he did not totally back the Ryan budget, though a top advisor confusingly said Sunday that Romney “would have signed” it. Romney also, during the GOP primary debates, hammered Newt Gingrich for offering a similarly drastic overhaul of the tax code, noting at the time that such changes would result in him paying almost no taxes at all.
Jon Terbush is a Boston-based writer whose work has appeared in Talking Points Memo, Business Insider, the New Haven Register, and elsewhere. He tweets about politics, cats, and baseball via @jonterbush.
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