Obama’s misleading tweet on Romney’s taxes — WaPo Fact Checker
“FACT: In 2010 and 2011, Romney paid less than 15% in taxes on $42.5 million in income—much less than what many middle-class families pay.”
— Tweet by @BarackObama, July 3, 2012
We are avid readers of tweets by @BarackObama, though of course it is not the president himself but his campaign team that posts them. We are also very curious when politicians claim they have uttered “a fact.”
So, is it really true that the presumptive Republican presidential nominee, who is very wealthy, pays a tax rate “much less” than “many” middle-class families.
Romney released his 2010 tax return and an estimate of his 2011 return earlier this year. He earned a little more than $20 million each year, a good chunk of it in capital gains and dividends, which are taxed at a preferential rate as low as 15 percent.
But that’s not the only reason why Romney’s tax rate is at that level. He also donates about 14 percent of his income to charity, which gives him a pretty big tax deduction. (As we have noted, President Obama in 2010 also gave about 14 percent of his income to charity.)
Indeed, Romney gives about as much to charity — $3 million — as he pays in taxes. Those itemized deductions are counted against income that would ordinarily be taxed at a 35-percent rate. We figure that without those donations to charity, his effective tax rate would be at least 19 percent. [...]
Skipping to the conclusion:
The Pinocchio Test
The Obama campaign’s tweet relies on a very slippery “fact.”
Romney, by receiving much of his income in capital gains and dividends and giving millions of dollars to charity, is certainly able to keep his effective tax rate relatively low, especially compared to a wealthy person who earns much of his or her income in salary. But, even so, Romney still pays an effective tax rate that is higher than the tax rate paid by most Americans.