Tuesday, January 24, 2012

$1.4 Million Per Month--Now THAT Is A Paycheck

You may recall that a few days ago, I estimated what Mitt Romney had as wealth and income, and what he paid in taxes.
The main number thrown around is that Mitt Romney is worth 250 million dollars. Let's be conservative and say that it's 200 million. And then let's speculate that he was able to make 5% return on that wealth last year, which I think is probably very conservative as well.

That would be $200 million x 5% equals $10 million annually. That's a monthly paycheck of $833,333.33. Four times a year he would be sending into the IRS a self-estimated tax payment of $375,000 (assuming 15% tax rate for him, which he just affirmed yesterday). That would leave a monthly net income of $708,333.00.
Well, the numbers have been released and indeed, I was being conservative. Here's what the Washington Post said this morning:
Mitt Romney offered a partial snapshot of his vast personal fortune late Monday, disclosing income of $21.7 million in 2010 and $20.9 million last year — virtually all of it profits, dividends or interest from investments.

The couple gave away $7 million in charitable contributions over the past two years, including at least $4.1 million to the Church of Jesus Christ of Latter-day Saints. Romney’s family has for generations been among the Mormon Church’s most prominent members.

The Romneys sent somewhat less to Washington over that period, paying an estimated $6.2 million in federal income taxes. According to his 2010 return, Romney paid about $3 million to the IRS, for an effective tax rate of 13.9 percent.
So it looks like Romney made a good return of about 10% on his investments of over $200 million. He gave something like 16% of his income to charity, including a tithe (10%) to his church, the Church of Jesus Christ of Latter Day Saints.  He paid about 14% in total federal taxes.  (By comparison, we paid about 22% of our joint income that year in total federal taxes--income and FICA.)

The Romneys took home (so to speak) about $1.4 million a month last year.  And he wasn't even working.  Somehow, as a consultant and private-equity manager for some 15 years in the 80s and 90s, he brought home enough bacon to retire for the rest of his life on $1.4 million a month.  And he doesn't even start drawing his Social Security check for another year yet....

What a country!  Over the last 30 years, using mostly other people's money (leverage), Romney and people like him have bought and sold companies, tinkering here and there, firing these workers, lowering those wages and benefits, eliminating that pension plan, outsourcing those jobs, taking those 'special dividends'.  And VOILA, all of a sudden, they're multi-millionares.  Where did their money come from?  Mostly lost wages, benefits, jobs on the part of all those middle-class workers who are, in many cases, no longer middle-class.

It's no wonder that Mitt Romney's uncomfortable when it comes to discussing his wealth, his income, and his taxes.  As he should be.  He's says he earned his money the old fashioned way.  Right--he basically stole it--from workers and their families, and from their communities. 

However, to his credit, he did tithe his filthy lucre (I Timothy 3:3) so we could be sure and have more Mormon missionaries in every corner of the world, passing out the Book of Mormon.  (Great.)

It was all 'legal', of course.  The finance and corporate elite made sure of that, through their political whores in Washington.  But that doesn't make it right.  In fact, it's all very unseeming, even obscene.  And the American people, increasingly, believe that is the case.

The inequity and unfairness of our current economy is a discussion that America needs to have, if we hope to somehow stay--or again become--a decent society.  How ironic, though, that we're having it in the midst of the Republican primaries.

Mitt Romney will stay rich, no doubt, as will his children and grandchildren, for generations to come.  But, it seems to me, he will not be President.

1 comment:

  1. In the beginning of this country, if memory serves me well, only white males with land could vote and hold office. Now everyone can vote, even corporations. But unfortunately money still rules our politics and policies. In essence, not much has changed in how our government funds elections since our country was founded. The rise in the middle class was hard fought but brought a new kind of prosperity and hope to Americans. But the battle between the 1% and the 99% continues. It's been a slow and steady decline for the middle class for the last 30 years...so slow that it ran under the radar so most of us didn't notice until we hit the 'Great Recession' of 2007-09 which revealed that those of us who thought we were entering or were securely ensconced in the middle class had now lost our savings and the value in investments like homes, IRAs, etc. Today we have the OWS movement (not backed by the Koch Bros.) mostly made up of children of the former middle class, and it is just getting started. The Genie cannot be put back into the bottle.