If the Gingrich tax proposals had been in place in 2010, Romney would have paid almost nothing in Federal taxes despite a gross income of $20.9 million that year. An analysis of his recently released tax returns by Roberton Williams, a senior fellow at the nonpartisan Tax Policy Center, concluded that his taxes would have totaled only about $30,000 on this $20.9 million in income, for an average tax rate of only 0.14%. Note this is 0.14%, not 14%, but one-hundreth of that. The figures are reported in an article in the Washington Post today.
Under the tax system in place for 2010, Romney had to pay an already low rate (for someone with his income) of just 14%. Under Gingrich’s proposal, he would have gotten a 99% cut.
Ordinary income in 2010 was taxed at a rate of 35% for income above $373,650, but Romney benefits from the low tax rates on capital income. He noted when he released his returns that he paid all that was owed “and not a dollar more”, and I would take this as an honest statement. That is, I do not believe that Romney was doing anything illegal.
But this is precisely the problem: the tax system is now structured so that the extremely rich in Romney’s position can legally pay a far lower rate than those in the middle. Gingrich would have the rich legally pay almost nothing. And when Obama says this is just not right, the Republicans loudly assert he is waging class warfare.