Guess what! Among the 47 percent who pay no income taxes are thousands of millionaires!
Well, well, well. It seems that some of those rich folks who glad-handed Mitt Romney at that now-infamous fundaiser in Florida this past spring probably were among the 47 percent of Americans whom Mittens disparaged for not paying federal income taxes.
Mark Gongloff EXPLAINS:
According to the non-partisan Tax Policy Center, some 3,000 of the 76 million taxpayers that were expected to pay no federal income taxes in 2011 were members of Romney’s cohort, making nearly $2.2 million per year, which puts them in the top 0.1 percent income bracket.
Another 24,000 taxpayers expected to pay no income taxes last year were in the top 1 percent income bracket, according to the TPC, making between $532,613 and $2.2 million per year.
How the heck does this happen? For one thing…these wealthy earners benefit to an unusual degree — as Mitt Romney himself does — from tax breaks on investment.
Capital gains on investments are taxed at 15 percent, much lower than the top income-tax rate. “Carried interest” income, which Romny and other private-equity executives enjoy, is taxed at the capital-gains rate. And many wealthy taxpayers take advantage of a feature that lets them recognize past investment losses to lower or eliminate their tax bills.
But the main (legal) reasons the One Percenters pay no income taxes are far less exotic, according to an Internal Revenue Service study of 2009 tax data. For the most part, these people get off with paying nothing because of run-of-the-mill stuff like getting their income from tax-free municipal bonds and plain-vanilla itemized deductions (monocle prescriptions, top-hat cleaning, manservant housing).