Why Mitt Romney's Tax Rate Matters

Image: FreeDigitalPhotos.net

Romney released his tax returns yesterday.  During the past two years, he made $42 million and paid about $6 million in taxes... an effective rate of about 14 %.   The rest of us pay between 25 and 35%.  Put aside issues of fairness on one hand and jealousy on the other.  Why does this matter?  Here's why:

If Romney and the rest of the 1% get to keep all this money --- due to low tax rates on investment income and low inheritance taxes --- they are assured of being a permanent upper class.  But even this is not the most important reason.

The most important reason is where that money winds up.  If Romney and his ilk paid fair taxes... say 50%... that money goes to the US Treasury and most of it will be spent in the US.  Any jobs created will be created in the US.  Any students educated will be American kids.  Any poor people helped will be the American poor.

But he gets to keep most of it.  You can be sure that he, and the rest of the 1%, and the big corporations are investing that money anywhere in the world where it brings them the best returns on investment.  They move manufacturing overseas.  They create low paying jobs in other parts of the world, while stripping Americans of middle-class jobs.  They put their money in banks beyond the US government's reach.  They make themselves more rich and more powerful, while weakening America and impoverishing more and more members of the late, great American middle class.

And that's why its really matters whether the Romneys among us get to keep most of their money or are required to pay their fair share of taxes.