For the Press
Romney's Tax Rate Lower Than Any President Since NixonSeptember 26, 2012
Tax Analysts' Joseph Thorndike Examines the History of Presidential Tax Rates
FALLS CHURCH, VA — Gov. Mitt Romney's tax rate for 2011 is lower than for any President since President Richard Nixon, who started the modern tradition of presidential tax disclosure when he was lambasted for paying similarly low rates of tax, Tax Analysts’ Joseph J. Thorndike has found.
Romney paid an average tax rate of 14.1 percent in 2011, slightly higher than what he paid in 2010, according to Thorndike, director of the Tax History Project at Tax Analysts and a contributing editor for Tax Notes.
By comparison, Thorndike found for a September 26 piece for Tax Notes Today, President Obama’s average effective tax rate during his Presidency is 26.45 percent; Bill Clinton’s was 20.15 percent and George W. Bush's was 27.17 percent.
"Average rates vary dramatically among presidents," Thorndike writes. "Over the decades, rates have declined; with rate-raising loophole eliminations offset by an overall trend toward tax reduction. Governor Romney’s rate is so low principally because he gets a significant percentage of his income from capital gains — an estimated 65-75 percent — and our current system gives preference to this investment income with particularly low tax rates."
President Nixon's rate was extremely low, thanks in part to a very large charitable deduction he claimed for donation of his official papers to the National Archives. The donation, which was valued quite high, offset his income for several years, with the result of a 0.3 percent tax rate for 1970 and 1971. When word got out about his tax avoidance, however, Congress and the IRS launched an investigation that forced the president to pay $465,000 in back taxes and interest.
"No one has accused Romney of anything like Nixon’s aggressive tax avoidance,” notes Thorndike. “But Nixon’s experience is still a cautionary tale. Right or wrong, Americans care a lot about the taxes paid by their presidents."
In addition to his work with Tax Analysts, Thorndike is the author of numerous publications on tax policy. Thorndike is the author (with Steven Bank and Kirk Stark) of War and Taxes (Urban Institute Press, 2008) and the editor (with Dennis J. Ventry Jr.) of Tax Justice: The Ongoing Debate (Urban Institute Press, 2002). He is currently writing a history of tax fairness and social justice in the 20th century.
Media Notes: A full copy of the article can be found here.