Mitt Romney's '47 Percent' Includes Real-Life Millionaires

In that crowd of wealthy donors at Marc Leder's Boca Raton sex palace listening to Mitt Romney blast Americans who don't pay income taxes, there were probably a few people who didn't pay income taxes.
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Republican presidential candidate and former Massachusetts Gov. Mitt Romney speaks to reporters about the secretly taped video from one of his campaign fundraising events in Costa Mesa, Calif., Monday, Sept. 17, 2012. (AP Photo/Charles Dharapak)
Republican presidential candidate and former Massachusetts Gov. Mitt Romney speaks to reporters about the secretly taped video from one of his campaign fundraising events in Costa Mesa, Calif., Monday, Sept. 17, 2012. (AP Photo/Charles Dharapak)

In that crowd of wealthy donors at Marc Leder's Boca Raton sex palace that listened to Mitt Romney blast Americans who don't pay income taxes, there were probably a few people who didn't pay income taxes.

Wonder if they're thinking of asking for a refund today.

The vast majority of what Romney calls the "47 percent," the percentage of Americans who don't pay federal income taxes --which is really 46 percent, but who's counting -- are working poor, retirees and the disabled, including disabled veterans, along with students and some people suffering long-term unemployment after the Great Recession. As Bonnie Kavoussi and others have pointed out, many in this group still pay federal payroll taxes, likely at a higher rate than Romney's own tax rate.

But a tiny sliver of this 47 percent includes the 1 percent -- the country's top earners.

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, as Kevin Roose at New York magazine points out, 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 Romney 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).

In his comments, Romney suggested that the 47 Percenters would never vote for him because a promise of a tax cut would be meaningless to them. But some of that group is probably contributing to his campaign, and they might well be hoping to keep some of the tax breaks they already have.

Are you part of the 47 percent, or part of the 1 percent that is part of the 47 percent, and want to talk about it? Feel free to email me at mark.gongloff@huffingtonpost.com. I'm also on Twitter at @markgongloff.

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