As the Presidential election heats up Mitt Romney and President Barack Obama are proposing extremely different tax plans. Under President Obama the rick would be taxed at higher rates while Mitt Romney wants the rich to receive even more tax breaks to “create jobs” for the middle class and poor.
If Obama wins the election and enacts his tax plan Romney could be forced to pay an additional $5 million in taxes, almost double what his own proposal would force him to pay. Ironically if Mitt Romney wins President Obama will earn nearly $90,000 per year more as part of the Romney tax initiative. Yet it Obama wins and has his tax plan passed he’ll also have to pay more on his own 2013 return.
Here’s how the taxes for each political candidate break down:
If we take into account Romney’s $23 million in earnings he would pay an effective tax rate of 34% under President Obama’s plan, while paying just 13% (only slightly less than he pays now) under his own plan. So Romney would pay approximately $7.8 million under President Obama’s tax the rich plan and just $3 million under his own plan.
On the other hand Obama would claim an effective tax rate under his own plan of 28% which based on income of $790,000 in 2011 would mean a payment of $248,000 for 2013 taxes, while Romney’s plan Obama’s 2011 tax rate of 21% would actually fall to $158,000.
The tax debate is likely to be a focal point for at least part of the election cycle as the US economy continues to sputter along.
