Obama’s 2011 Tax Returns Show 20.5 Percent Rate

U.S. President Barack Obama

President Obama paid an effective tax rate of 20.5 percent in 2011, according to tax returns he and first lady Michelle Obama released today. That makes the president’s tax rate lower than Warren Buffett’s secretary, who pays upwards of 35 percent and whom Obama often cites on the campaign trail as justification for increasing taxes on millionaires like Buffett.

But at 20.5 percent, the president paid a markedly higher percentage of his income to the federal government in 2011 than his Republican rival Mitt Romney reported paying in 2010. Despite earning more than $21 million in 2010, Romney’s effective tax rate was a mere 14 percent.


President Obama reported earning about $790,000 last year and paid $162,000 in total taxes. He and the first lady donated $172,000 to charity, or about 22 percent of their adjusted gross income, according to their tax returns. The majority of the first family’s donations went to the Fisher House Foundation which provides scholarships to veterans’ children.

Obama has pushed hard the so-called “Buffett Rule” in campaign speeches this week. The proposed tax reform would require people earning more than $1 million to pay a minimum effective tax rate of 30 percent.

With an income less than $1 million, Obama would not see his tax rate increase under the rule. Romney, on the other hand, would see his rate from 2010 more than double.

The likely GOP nominee has yet to release his tax returns for 2011, a fact the Obama campaign was quick to criticize him for today after the president released his own returns.

“Governor Romney has yet to provide tax returns from the period in which he made hundreds of millions as a corporate buyout specialist, or as governor of Massachusetts, the experience he says qualifies him to be president,” Obama campaign manager Jim Messina said in a statement. ” What does he have to hide?”

Romney’s spokesman Andrea Saul said the former Massachusetts governor will release his 2011 return “when it is filed.”  She knocked Obama for trying to “distract” voters from his economic record by putting the focus on taxes.

“It’s no surprise with the worst job creation record in modern history that President Obama would try to distract Americans from the real issues with a series of sideshows,” Saul said.

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Five People Who Turned $1,000 Into $1 Million

Million Dollars

Most millionaires are self-made millionaires, but becoming one is something that still seems out of reach for most people.

In many cases, we dismiss the idea of building a million-dollar business because, well, you need a lot of money for that, right? You've got to spend money to make money, don't you?

As it turns out, you don't really have to spend that much.

I spent the last few weeks interviewing dozens of millionaire entrepreneurs. Many of these individuals started businesses with less than $1,000 and are now earning more than $1 million per year in revenue. All of them bootstrapped their own business with no outside cash and a minimal capital investment from their own bank account. Here is a brief primer on bootstrapping a business.

So how does one start with very little money and turn that into $1 million per year? Here are five stories of regular people building million-dollar businesses.

PostcardMania. Joy Gendusa was a freelancer who wanted to buy some postcards to advertise her business. She was shocked by the unnecessary fees she had to pay just to get some postcards made, so she decided to start her own postcard business with a friendly price structure for customers. PostcardMania was born.

Gendusa started the company with no capital investment and used the money from the first customer to pay the printer for her first postcards. In the early days, the payment schedule was tight. She had to get money from the customers and use that cash to pay her printer, but she kept bringing in new business and eventually built up a little bit of cash.

As PostcardMania continued to grow, Gendusa noticed customers asking for other services. They would say things like, "Who built your website?" or "Can you do email marketing too?" So PostcardMania started branching into those areas as well. Today, the company offers all sorts of advertising and marketing for its clients and makes close to $20 million per year.

The success of PostcardMania is a direct result of the sales and marketing techniques Gendusa used to get her company off the ground. Here are more tips and tricks for effective sales and marketing.

Blue Buddha Boutique. Rebeca Mojica went to a Renaissance Festival and noticed a unique metal belt made from chainmaille rings. After searching for something similar, she couldn't find the belts anywhere and decided to try and make her own.

Mojica spent $20 on that first set of rings and sold a few belts to a few friends and family. However, it wasn't until she started teaching other people how to make the belts that she really saw the potential for a business.

Mojica began teaching chainmaille classes and decided to sell the rings and pliers needed to make the belts to her students. She made $300 the first time she sold the supplies. Soon after, Blue Buddha Boutique was born and it rapidly became one of the top sellers of chainmaille jewelry supplies. Blue Buddha Boutique now has 13 employees and is set to break the million dollar mark in 2012.

FIELD Beef Jerky. Matt Levey, Tom Donigan, and Scott Fiesinger were three friends who went on a ski trip together and couldn't stop talking about the homemade beef jerky they picked up in the mountains.

For a few years they would playfully say, "We should make our own beef jerky and sell it!" Eventually the trio decided to talk with grocery-store managers and owners about their idea.

The founders asked the grocery stores if they liked the idea of a natural, organic beef jerky made from quality meat. The response was unanimous: Every store owner wanted something that fit the description, but they couldn't find it anywhere.

After spending a little money playing with different recipes and figuring out how to package and ship the jerky to grocery stores, the three friends formed a new company called FIELD Beef Jerky.

In the early days, the owners took orders themselves and delivered them to grocery stores in New York City on their bicycles. After a few months of hustling around the city, their product was picked up by a distributor and has since exploded in popularity. FIELD Beef Jerky is now available in more than 600 locations nationwide and is starting to gain traction in major chains like Wegmans. The company is on pace to break $1 million in 2012.

M&E Painting. Matt Shoup worked as a painter during the summers in college. When he was let go from his job his financial services job a few years later, he decided to start a painting business.

Starting with just $100, Shoup woke up the next day and went door to door in his neighborhood, knocking on houses that looked like they could use a paint job. He enlisted a few friends for help and M&E Painting made more than $500,000 in that first year. Seven years later, the company has more than 4,000 customers and makes between $1.5 and $2.5 million every year.

Stories like this one inspire you to ask: Should you quit your job to follow your dreams?

AddressTwo. Nick Carter used to run a marketing consulting agency. When a client came to him and asked if they could figure out a Customer Relationship Management (CRM) software for his company, Carter decided to build their own software solution. Carter used the money from that first client to finance the creation of AddressTwo and soon after, selling the software became his primary business.

Using a growth method that Carter calls "customer capital," he added features to the software when new clients were willing to pay for an addition. Slowly, the software improved and gained more customers. Today, Carter has built a successful CRM software that serves more than 500 businesses every month without any outside funding or large investment.

How can you get started? One of the common themes I noticed in my interviews with successful entrepreneurs was that they have the ability to decide. Simply put, most people want to work for themselves, but few people decide to take that first step.

If you're looking for ways to make that first step easier, you can ease into working for yourself by freelancing. For example, here are 7 ways to earn an extra $1,000 this month.

Building a million-dollar business from scratch isn't easy, but it is possible.

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