Mitt Romney says he pays 13 percent in taxes. How low is that?
Mitt Romney says he paid an average federal income tax rate of 13 percent during the past 10 years.
Who else pays the same rate?
One answer would be registered nurses and accident appraisers for insurance companies.
According to the Bureau of Labor Statistics, nurses and appraisers make about $60,000 a year on average, which gives them an individual tax rate of about 15 percent, or actually a little higher than Mr. Romney.
They get to that tax rate because, like most wage earners, they owe payroll taxes 鈥� the money that gets deducted from a paycheck and goes to Social Security and Medicare.聽As a self-employed person, though, Romney's payroll tax "borders on the insignificant,鈥� says聽Joe Rosenberg, a research associate at the Tax Policy Center, a joint venture of the Washington-based Urban Institute and the Brookings Institution.
In total, Romney paid聽$29,000 out of $20.7 million in income in 2010 for聽Medicare and Social Security.
If the nurses and appraisers didn't have to shell out for payroll taxes, their actual average tax rate would be only 4 percent,聽says Rosenberg.
Another group that pays at about the same rate as Romney is made up of CEOs, dentists, and anesthesiologists. Their earnings of between $163,173 and $210,998, on average, puts them in the 90th聽to 95th聽percentile of wage earners, and their effective tax rate is 13.8 percent.
One group that did not pay the same rate as Romney? People聽who made roughly equal amounts of money 鈥� those in the top 0.1 percent of earners. Households making about $20.7 million paid at a 23.6 percent rate, says聽Scott Klinger, associate fellow of the Institute for Policy Studies in Washington, citing a Tax Policy Center analysis.
Romney pays at a lower tax rate than the top 400 earners did in 2009, Mr. Klinger says. Their income averaged $202 million and they paid taxes at a 19.91 percent rate.
The reason Romney鈥檚 overall rate is so low is because the bulk of his income 鈥� earned when he ran Bain Capital 鈥� is considered 鈥渃arried interest.鈥� That means聽it is taxed at the capital-gains rate, which is 15 percent. He also has very large deductions that lower his tax rate further. According to his 2010 return 鈥撀爐he only final tax return he has released 鈥撀爃e gave $3 million in charitable contributions, including $1.5 million to the Church of Jesus Christ of Latter-day Saints.
