Mitt Romney is now making the laughable claim that his effective tax rate is “really closer to 45 or 50 percent.”
Josh Marshall at Talking Points Memo explains the spurious rationale:
Romney’s argument is that even though he pays only 13.9%, he’s really paying something like 45% to 50% because the investment income he lives on comes from corporations. And those corporat[ion]s also pay taxes. The nominal corporate tax rate is 35%, though of course many pay much lower. But if you add Romney’s rate together with this completely unrelated corporate tax he doesn’t pay, you get 50%, which Romney is now saying is real tax rate. In other words, he’s claiming he pays both taxes.
But what jumps out at me is this: “of course many pay much lower.” Exactly. For example, in 2010, GE paid zero corporate taxes. Large corporations lobby for loopholes, and their tax lawyers work the loopholes to drastically reduce the effective tax rate — the same thing that a lot of uber-wealthy individuals (like Mitt) have done. In fact, creative reduction of tax liability is one of the things that a lot of “turnaround artists” do to “trim the fat” of a sputtering company. I would bet that it’s one of the first things Bain Capital did with every new acquisition.
So let’s see those corporate tax returns, Mitt. Let’s see if Bain Capital’s portfolio companies actually paid anywhere near 35% in corporate taxes. If he wants to claim that the burden of those companies’ corporate taxes drove his effective rate up somehow, then he needs to prove it.
