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Ryan McVay/Photodisc/Thinkstock(WASHINGTON) -- Some GOP presidential candidates may have more to lose than political points if the debt super-committee adopts President Obama’s deficit reduction plan, one provision of which would raise taxes on some millionaires to ensure that high-income earners do not pay a lower tax rate than middle-class Americans.
According to his 2010 tax return, Obama’s effective federal income tax rate was about 24 percent. With a reported income of about $1.7 million, the president paid the same rate as a married couple who earned $101,000 after deductions. Under the Buffett Rule, the president would undoubtedly have to pay higher taxes to push his taxable income into the highest 35 percent tax bracket.
GOP presidential candidate Mitt Romney would likely have a much heftier tax burden as well because the majority of his income came from his investments, many of which are taxed at a lower rate than salary. Romney is the wealthiest candidate on the GOP primary ballot bringing in between $9.6 million to $40 million in 2010, according to campaign disclosure forms.
By ABC’s approximations, Newt Gingrich reported the second-highest income, totaling between $2.6 million and $2.7 million. Almost all of Gingrich’s income was paid in the form of dividends from his company, Gingrich Productions. Although Gingrich falls into the millionaire category, he probably would not pay significantly higher taxes under the Buffett Rule because dividends are taxed at virtually the same rate as salary.
Herman Cain, on the other hand, could see a fairly large increase in his taxes under Obama’s Buffett Rule because a large portion of his income stream is from less-taxed capital gains. Cain’s disclosure forms showed that he took in between $230,000 and $1.3 million from capital gains in 2010.Cain’s total income for the year was between $1.1 million and $2.4 million, making him the third wealthiest GOP presidential candidate.
Rick Santorum, the fourth-highest paid GOP candidate, would probably not see his tax burden increase significantly because his 2010 income of between $1.4 million and $1.6 million came almost solely from salary. The former Pennsylvania senator earned $1.3 million in consulting and news media contributor fees.
All of Jon Huntsman’s reported income came from his investments, but it was unclear whether the bulk of it would fall under the higher-taxed dividends or lower-taxed capital gains. Huntsman reported earning between $688,700 and $3.7 million in 2010 making him the second wealthiest candidate if his profits came in on the high end of the approximation or the sixth wealthiest if he earned closer to the low end of his reported income range.
Depending on where his income level actually lies, Huntsman may fall short of the Buffett Rule tax increases. The same is true for his fellow GOP contender Ron Paul, who reported earning between $400,000 and $1.3 million in 2010.
About $174,000 of Paul’s income is from his congressional salary, which would theoretically not be taxed at a higher rate under the Buffett Rule.
Neither Perry nor Bachmann would be affected by the Buffett Rule, seeing as their incomes were significantly less than the $1 million threshold.
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