Obama's tax rate is 18.4 percent. Is that too low for a millionaire?
Loading...
Has President Obama been taking advice from Mitt Romney鈥檚 tax accountant?
Months after attacking Mr. Romney for his low tax rate, some critics are now turning the tables on the president, saying his 2012 tax rate is too low.
The president in federal income taxes on an adjusted gross income of $608,611 in 2012, making his effective federal tax rate 18.4 percent. (The Obamas also paid $29,450 in Illinois income tax.)
Apparently, that鈥檚 a lot less than some folks at MSNBC鈥檚 鈥Morning Joe鈥 pay.
鈥淭he president was talking about how shameful it is that Mitt Romney paid less in taxes than teachers paid in taxes, and yet Barack Obama, reportedly worth $14 million, paid less in taxes than teachers or Warren Buffet鈥檚 poor, overworked secretary,鈥 鈥淢orning Joe鈥 host Joe Scarborough said on . 聽
Is Obama鈥檚 tax rate too low?
Well, for starters, it鈥檚 still higher than Romney鈥檚 2011 rate of 14.1 percent 鈥 though that鈥檚 not saying much.
It鈥檚 also higher than US taxpayers鈥 average income tax rate of about 11.8 percent in 2011, according to the Tax Foundation, a tax research group in Washington. And it鈥檚 higher than the rate some 46 percent of Americans, mostly poor or elderly, pay 鈥 that is, no federal income taxes, according to the Tax Policy Center, a tax think tank.
Then again, Mr. Obama is not your average taxpayer, nor is he poor or elderly (though those gray hairs may fool you).
In fact, the Obamas鈥 2012 tax rate is 2 percentage points lower than last year鈥檚, when their rate was 20.5 percent.
There are a few reasons for this. Most obviously, the Obamas made less money in 2012 than they did the previous year 鈥 $608,611 in 2012 compared with $789,674 in 2011. That鈥檚 largely due to a drop in sales of the president鈥檚 two bestsellers, 鈥淒reams From My Father,鈥 and 鈥淭he Audacity of Hope,鈥 both of which made Obama a millionaire. (Both years Obama made $400,000 from his presidential salary.)
And as the White House likes to point out, they also donated almost a quarter of their income, some $150,034, to 33 different charities, lowering their tax rate.
Nonetheless, almost all of the Obamas鈥 income was subject to the top tax rate of 39.6 percent in 2012, .
Still, even the president himself appears to think his tax rate is too low, and he鈥檚 using his own tax return to promote the Buffett Rule, a minimum tax rate for the wealthy.
The White House鈥檚 2014 budget proposal includes a proposed Buffett Rule, named for billionaire investor Warren Buffett, who has publicly complained that his tax rate is lower than that of his secretary.
"The president believes we must reform our tax system which is why he has proposed policies like the Buffett Rule that would ask the wealthiest Americans to pay their fair share while protecting families making under $250,000 from seeing their taxes go up," White House press secretary Jay Carney said in a . "Under the President鈥檚 own tax proposals 鈥 he would pay more in taxes while ensuring we cut taxes for the middle class and those trying to get in it."
If it鈥檚 an effort to make those who shoveled vast swaths of their paychecks to Uncle Sam feel better on this most grim of Mondays (脿 la Obama鈥檚 plan to give back 5 percent of his pay in solidarity with government workers affected by the sequester), it鈥檚 probably not working.聽