The release of Gov. Mitt Romney’s tax returns on Tuesday highlights the Presidential candidate’s wealth and the low 14% tax rate that investors enjoy, far less than the 25-35% tax rate that the average American pays for wages.
Yes, Gov. Romney’s annual earnings of about $20 million indicate that his dividends and interest received in one day are close to the average household annual income of about $57,000. This should surprise no one. Let’s put some perspective on this, relative to individuals with his business expertise – by some accounts, he is underpaid.
Gov. Romney presents himself as a “regular guy” while at the same showing pride for his business acumen and success. This is in no way unusual for public figures with comparable annual income. So do television personalities such as Matt Lauer, at $17 million per year (some mornings, I can almost believe the “regular guy” image.)
Should the public be shocked that a successful business person earns the average annual salary in a day? In the private sector such as Bain Capitol, described in their website as an:
alternative asset management firms whose affiliates manage approximately $60 billion
….or, for that matter, a hedge fund firm such as Appaloosa Management that:
primarily invests in equities and debt of distressed companies, bonds, exchange warrants, options, futures, notes, and junk bonds. The firm also seeks to invest in companies in bankruptcy
— It is not uncommon for their CEO to earn not $20 million per year, but well over $1 billion. In the case of Appaloosa Management, founder and President David Tepper recently earned $4 billion, or $16 million per day. That corresponds to earning the average American’s annual income in not one day but in less than two minutes!
So is Gov. Romney undervalued? You decide.