Do the math

Former Gov. Mitt Romney, the Republican presidential nominee, has a beef with folks who don’t pay taxes and who take payments from the government. But he forgets that many of the folks who fall below income-tax thresholds vote Republican and that one of the largest groups receiving payments are people on Social Security, many of whom also vote Republican.

Worse, however, is that folks like Romney and his vice-presidential nominee, Rep. Paul Ryan, will always ignore one of the largest tax handouts of all, the mortgage-interest deduction—which isn’t going to many working-class people who are struggling to get by and nowhere near able to make a down payment on a house. And let’s not forget that the mortgage-interest deduction covers loans up to $1,000,000 on both first and second homes.

So, while Romney’s complaining about whether or not people making between $20,000 and $40,000 are paying taxes, somebody entering into a $1 million real-estate loan on their weekend beach house at 5 percent on a 30-year term is getting a $50,000 itemized deduction—in the first year alone. And it’s on a higher marginal rate (assuming that someone who buys a million-dollar beach house also has a higher income), so the tax relief is significantly greater than the amount that a family earning $50,000 might ever pay in taxes, with or without any deductions, tax credits or child tax allowances.

But it’s far too inconvenient to mention that one of the largest tax benefits of all disproportionately favors higher earners, especially when the working single mother who cleans that beach house might be sliding by, paying no income tax on her minimum-wage paycheck.

Of course, she’s still paying Social Security and Medicare taxes on every penny she earns, plus state taxes, sales taxes on the majority of her take-home pay (which is all being spent), and property taxes via the rent she pays to her landlord. All of that probably comes close to equaling the gross tax rate of 13 percent that Mitt Romney says he pays.

But, again, that’s just awkward to point out. And it requires pausing to, you know, think.