Just in time for Tax Day, President Obama released his 2012 return to the IRS. And right on cue, conservative commentators blasted the president for paying only 18.4 percent ($112,000) of his $609,000 in income to Uncle Sam. Predictably, while CNN's Erin Burnett slammed Obama's payment to the Treasury as "pretty low and frankly almost competitive with Mitt Romney's rate," Joe Scarborough said Obama's "hypocrisy is mind-boggling."
As it turns out, right-wing rage over Barack Obama's tax rate is the real hypocrisy. After all, Obama campaigned for office in 2008 and 2012 on a platform which called for substantially raising his own taxes. Meanwhile, a President Romney would have slashed his (and his heirs') tax bill by millions of dollars.
With royalties from his books sales slowing, President Obama reported $608,000 in income for 2012, compared to $5.5 million in 2009 and $1.7 million in 2010. But as a result of giving a quarter of their income to 33 different charities (including $103,000 to the Fisher House charity for military families), the Obamas saw their effective tax rate drop to 18.4 percent from 26 percent two years ago.
But that drop was more than enough to provoke fits of apoplexy from the right. This morning, Scarborough fumed, "So a guy who I hear is worth $14 million is paying a tax rate far lower than what a teacher pays."
"This President plays class warfare for a year and a half on the campaign trail. Let's keep this graphic up. He attacks Mitt Romney for paying a lower tax rate than school teachers, repeatedly. Democrats repeatedly attacked Mitt Romney for paying a lower tax rate than teachers, than Warren Buffet's (secretary) -- poor Warren Buffet's secretary, God help her, God bless her. And yet this President, after demagoguing this issue for a year and a half, pays an 18 percent tax rate, which, by the way, is half of the tax rate that I pay."On Friday, Erin Burnett tried to get out front of the wave of conservative criticism:
His 2012 federal tax return came out today. He and Michelle paid $112,000 in taxes on adjusted gross income of $609,000. So that puts the effective tax rate for the Obama's at 18.4 percent. Pretty low and frankly almost competitive with Mitt Romney's rate in 2011 at 14.1 percent.Continue reading below the fold.
Now, NYU professor Daniel Shaviro tells us three main deductions were responsible for the president's low rate, state and local taxes, home mortgage interest and the $150,000 the Obama's donated to charity. Maybe there is a reason he doesn't want to take away the home interest deductions.
Actually, President Obama does not want to eliminate the home mortgage interest deduction that cost Uncle Sam $89 billion in 2011 because of its impact on middle-class families. Instead, with the fiscal cliff deal he signed in President Obama raised his income tax rate from 35 to 39.6 percent and his capital gains tax rate to 20 from 15 percent. And not content to rest there, Obama's proposed budget for fiscal year 2014 would reduce or eliminate several tax breaks benefitting the wealthiest Americans—a group which happens to include himself. Joe Scarborough's mythmaking notwithstanding, Obama has in fact called on Congress to pass the so-called "Buffett Rule" to ensure that those earning over a million dollars a year, like Obama will and Mitt Romney already does, will pay at least 30 percent of their income to Uncle Sam. Just as important, President Obama has proposed capping charitable deductions at 28 percent, a change that would cost him and would-have-been President Romney some serious coin.
President Romney, in contrast, would have given himself and his family a massive tax cut windfall of staggering proportions. Romney not only wanted to make the Bush tax rates permanent, he wanted a 20 percent across-the-board tax cut on top of that. That would have proven quite helpful to him even in those years when his speaking fees of $374,000 were "not that much." At no point did Romney publicly commit to a single tax deduction he'd close, even when he suggested capping their total value. On top of that, Romney called for ending the estate tax, a giveaway to the Romney clan potentially worth at least $80 million.
It's also worth recalling that Mitt Romney's 10 percent church tithe reduces his tax bill every year. (But Romney wants credit for that, too, claiming that once his charitable contributions and so-called double-taxation of corporate profits are taken into account his real tax rate is "45 or 50 percent.") Last August, Mitt announced that he never paid less than 13 percent in taxes (which ones he didn't say) over each of the last 10 years. Mitt insisted that get credit for the dollars donated to the LDS:
"Every year, I've paid at least 13 percent, and if you add, in addition, the amount that goes to charity, why the number gets well above 20 percent."As it turned out, for his 2011 return Romney did not claim the full charitable tax break to which he was entitled (claiming only $2.25 million of the $4 million he donated) in order to keep his word about that 13 percent rate.
In contrast, as President Obama explained during the campaign last year:
"To give me another tax break, or to give Warren Buffett another tax break, or to give Mitt Romney another tax break -- that would cost about a trillion dollars" in the federal budget, Obama told people in Cedar Rapids, Iowa.Apparently, the likes of Erin Burnett and Joe Scarborough not only want to forget the result of the 2012 election; they are pretending it never happened at all.
"We can't afford it," he said. "Not at a time when we're trying to bring down our deficit."