How Much Is 13 Percent?
A front-page headline in today’s New York Times: “Romney Says He Paid At Least 13% in Income Taxes” over the last 10 years. That sounds low, but it represents lots of dollars. Which is more important, percentages or dollars? I hope the American people give that some serious thought.
I’ve always struggled to overcome my own shortcoming of being “penny wise and pound foolish” and giving percentages more weight than they deserve. My most egregious failure occurred in Soule, South Korea, during the 1997-1998 Asian financial crisis. A couple of us went to a well-known shopping district to look for bargains. I found some beautiful silk ties and bought three for $7.00 each. There were a couple of $10.00 ties that I also liked very much, but I couldn’t bring myself to pay almost 43% more than I was paying for the first three. I knew $10.00 was a good deal, but not nearly as good as $7.00. I wasn’t going to be a chump. (By the way, these were local brands, not knock-offs.)
Buyers’ remorse—or, more accurately, non-buyers’ remorse—didn’t fully set in until I was back home seeing similar ties for over $100.00 each. My frame of reference changed. I remind myself of my tie stupidity as I fight the tyranny of percentages every day. Even so, I still occasionally go to another store to save 10 percent even when the dollar savings wouldn’t cover the additional cost of gasoline and time. I try not to sweat the small stuff, but I can’t help it. The small stuff usually wins.
I hope I’m in the minority on that, but I fear I’m not. In Mr. Romney’s case, 13% is a heck of a lot of money—much more than my 30% or so. If he’d asked my advice, I would have told him to announce the amount rather than the percentage. At least make the critics do their own arithmetic
Bob, look at it this way:
Mr Romney earns $1,000,000.00
Mr Romney paid $130,000.00 in income taxes
Mr Romney keeps $870,000.00
13 percent is a lot of dollars in Romney’s case. But, as John B pointed out, he is still keeping 87 percent of the millions and possibly billions of dollars he makes every year. Think of the person who makes $30,000 a year or less, as many, many working Americans make and still try to support families, may mortgages and make car payments. If they paid 13 percent, they’d pay $3,900 a year. Not a lot to Mr. Romney, but that only leaves such an individual with 26,100 to live on. Now consider the fact that that same individual does not pay 13 percent, they pay more more than that in taxes each year.
The dollar amount Romney makes in a year is unattainable by the average American who simply wants to settle down, earn a living wage and raise a family. I don’t believe that a wealthy person’s lifestyle would truly suffer if they were made to pay the same tax rate a normal person pays because they are still left with millions of dollars. By making the middle and lower class pay more, the old adage is true: The rich get richer and the poor get poorer. Meanwhile, all the average person can do is hope that the wealthy put that money back into the economy and not into a down payment on another mansion.
I have a feeling that if the rich did have to pay the same as most people, their investments in the economy and commerce would go away before they made concessions that involved selling off any luxury items. Then, they would blame those who pushed for such a tax hike on the rich for the slumping economy and push for more trickle down economics and ultimately would win as they always seem to. The rich own this country and that will never change.
mere pocket change to romney
I believe that dollars are probably more important, but more important than either type of number is what those tax dollars are going towards.
At the end of the day, it all comes down to a person’s ethics and moral value towards money.
This redistributive bent is becoming disturbing. 46% of American earners don’t pay any taxes. Those in Romney’s income bracket also pay around 8% of their income every year through corporate taxes..
By the way, that new mansion.. well that’s part of the economy too. The annual taxes on his homes probably amount to more than I’ll make in my entire life.
Average Americans try and maximize their deductions every single year. It’s not like Romney is some sort of criminal, the truth is that if the capital gains tax was higher, the rich would keep their assets unrealized.
The income distribution figures are outrageous as it is, they pay enough.
“Because we’re moving from a society where the goal of government is not to equalize opportunity but to equalize the results of our lives. … The more we ask government to do for us, the more government can take from us. … Government is doing so much in our lives that we have less freedom to govern ourselves.”
- Paul Ryan
This is the best theoretical explanation I have heard that suggests low; taxes/regulation/interference from the Govt.
(“Romney Says He Paid At Least 13% in Income Taxes” over the last 10 years. That sounds low.) – DUH – THAT IS LOW!!!
Wow, can’t believe you guys fell for the demagoguery and spin. You cannot compare the 13% “overall tax rate”, with a “30% or so” marginal tax rate. 97% of Americans pay less than a 13% overall tax rate. So, Wayne, it is not as low as it sounds. And, I don’t think there are many who pay a 30% overall tax rate.
I should have elaborated a little more. Yes, with a high earned income, and little write-offs or income from cap gains or dividends, it is possible to get over 30% overall tax rate.
I guess I just get frustrated by the twisting of statistics people are using to castigate the higher earners. Most people pay less than 13% “overall”, but think they pay 25% or more. They do not make the proper comparison, confusing “overall” with “marginal”. And the media are happy to let them believe that.