In fact, nearly half of US taxpayers will probably pay no taxes at all for 2011, including 24,000 in the top 1 percent of incomes, according to the Tax Policy Center, a think tank in Washington. Some low-income families even get back more than they pay because of the Earned Income Tax Credit and other programs.
The average tax filer, earning just over $65,000 a year, pays about 9 percent in US income taxes, even though couples who earn that much would fall in the 15 percent tax bracket and individuals in the 25 percent bracket.
“A negligible percent of the population actually pays an effective tax rate at or above’’ the highest rate for their income bracket, said David Logan, an economist with the Tax Foundation, a nonprofit research organization.
Romney, the front-runner for the Republican presidential nomination, has come under fire from rivals for his leadership of the Boston private equity firm Bain Capital, which earned huge profits by buying and selling companies, and sometimes laying off workers. His opponents have also pressed him to release his tax returns, which he has not done so far. He has promised to release his 2011 returns in April.
Romney, who amassed a fortune of as much as $250 million and continues to earn millions from investments and other sources of income, responded to a reporter’s question Tuesday by saying he pays close to 15 percent of his earnings in federal income taxes.
Congress decreed a decade ago that the wealthiest Americans pay a top income tax rate of 35 percent. But as Romney shows, hardly anyone - even billionaires and multimillionaires - pay anywhere close to that.
Romney said the bulk of his income is taxed at the 15 percent rate for long-term capital gains for dividends and other investment returns, rather than the ordinary rates for salaries and other wages. Typically, most of the pay for hedge fund managers, venture capitalists, and private equity executives is structured as investment earnings, so they pay the lower capital gains rate.
