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Media Push Myths About Mitt Romney's 15% Tax Rate


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Investors Business Daily:

Taxes: Mitt Romney's admission that his effective tax rate is around 15% prompted the usual class warfare rage from the left. But it also prompted news reports to repeat several myths about the country's income tax code.

As CNN put it in the first paragraph of its story, Romney's 15% tax rate means "the multimillionaire pays a smaller percentage of taxes on his income than many middle-income Americans."

This is a favorite canard of the left these days — that the super-rich often pay taxes at lower rates than do struggling middle-class families.

It was propelled by Warren Buffett, who claimed that his tax rate was lower than his secretary's, prompting President Obama to quickly propose a "Buffett rule" surtax on millionaires.

But like many "facts" about the tax code, this one evaporates upon closer inspection.

First, it's simply false that Romney's tax rate is lower than "many middle-income Americans." The middle 20% of income earners pay taxes at an average rate of just 2.3%. The next highest 20% pay at an average rate of only 6.1%.

Even when you include payroll taxes, the effective rate for families in the middle of the income spectrum is less than 13%, according to data from the Tax Policy Center.

IRS data, meanwhile, show that families with incomes of between $50,000 and $100,000 paid an average 8.9% in income taxes, while those earning between $100,000 and $200,000 paid an average 12.7%.

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So where are all these overtaxed middle-class families the media keep talking about?

This fixation on tax rates also overlooks the fact that the wealthy pay the vast bulk of all federal income taxes. In fact, the top 10% of income earners pick up 70% of all federal income taxes paid, and the richest 1% account for more than a third.snip
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