Look no further than the effective tax rates paid by President Obama, Vice President Biden, Speaker Gingrich and Governor Romney to see the inefficiency, economic distortions, budget deficits, and unfairness caused by the US tax system. Obama, Gingrich, and Romney all have annual incomes in excess of $1 million, but their effective tax rates range from 15% to 31%.
While Governor Romney refuses to release so far his tax returns, he says that his effective tax rate is around 15% on what apparently is many millions of dollars of annual income from returns on investments. Of this elite group, Romney by a great deal has both the highest annual income and the lowest effective tax rate.
By comparison, President Obama and the First Lady paid an effective tax rate of 26% on $1,728,096 of income derived mostly from sales of books. Vice President Biden and his wife had an effective tax rate of 23% on 2010 income of $379,178.
Of this gang of four, Speaker Gingrich, who released yesterday his 2010 taxes, has the dubious distinction of paying the highest effective tax rate--31% on his income of $3.1 million. Gingrich paid more than 3 times the national average effective tax rate of 9.3%, but his income was about 63 times the national median income.