Why do Newt and Mitt pay such different tax rates?

Mitt Romney has told reporters that he pays an effective tax rate of roughly 15 percent on his income. Newt Gingrich, wealthy but not in the same league as Romney, has released tax returns that indicate he paid an effective rate of 32 percent, more than twice as high as Romney’s rate.

How is that possible? Well, we still don’t have Romney’s tax returns, so all we can do is make highly educated guesses at this point. Romney tells us that “my income comes overwhelmingly from some investments made in the past,” and under federal law those dividends and capital gains are taxed at only 15 percent.

In Romney and Gingrich, then, we’ve got useful examples of two types of taxpayers: those who receive most of their income through investments, what used to be called unearned income; and those who receive most of their income through actual work, such as serving as historian to Fannie Mae. Those who earn their money directly pay much higher taxes than those who receive it through investments.

In effect, a household making $100,000 a year by getting up in the morning and going to work is going to pay roughly twice as much in taxes as a household next door with an identical income derived entirely from investments. In terms of simple fairness, I think most people would have problems with that kind of arrangement. So if you’re going to tax labor at twice the rate that you tax capital, you better have a very good public-policy reason to do so.

In general, two such reasons are offered:

1. Theoretically, by lowering taxes on dividends and capital gains, you encourage savings and investment, which is good for the economy. In practice, however, there’s no evidence that cutting taxes on investments actually works that way. In fact, a 2010 study by the nonpartisan Congressional Research Service that looked at the history of investment taxes concluded that the opposite is true:

“Capital gains tax rate reductions appear to decrease public saving and may have little or no effect on private saving. Consequently, capital gains tax reductions likely have a negative overall impact on national saving. … capital gains tax rate reductions are unlikely to have much effect on the long-term level of output or the path to the long-run level of output (i.e., economic growth).”

In other words, cutting the capital gains tax has shown no demonstrated impact on the level of private savings and investment, but it does increase the federal deficit by decreasing tax revenue. Overall, it lowers aggregate national savings and does nothing for the economy.

2.) Taxes on dividends and capital gains should be lowered or even eliminated because they amount to double taxation. The argument is that corporate profit is taxed once when it is earned by the corporation, and taxed again when that profit is returned to the investor in the forms of a dividend or capital gain. So of course that second level of taxation should be reduced.

That’s a legitimate point, to a degree. Its validity depends on whether that corporate income tax is actually paid in the first place, which is questionable in many cases. In fact, this little nugget from a column in today’s New York Times illuminates the issue perfectly.

Floyd Norris writes:

The most interesting effort to end double taxation of dividends came from President George W. Bush in 2003. He proposed that dividend payments be tax-free — but only if the company could show that the dividends were being paid out of profits on which federal income taxes had in fact been paid.

That proposal caused something close to panic among some business lobbyists. Had it been carried out effectively — and it was evident that the Bush administration had not thought through all the details before announcing the proposal — the result would have been that companies that pay taxes would have been able to offer tax-advantaged payouts, while those that managed to lobby for loopholes would have had to tell shareholders that they could get no such tax break. Shares in taxpaying companies would have outperformed shares in others, at least until a new equilibrium was reached.

The Bush proposal quickly was changed to simply lower the rate on dividends to 15 percent, the same as the new capital gains rate. Before that, the maximum tax on dividends had been nearly 40 percent, while the capital gains rate went as high as 21.2 percent. Share owners get a break whether or not the profits being paid out were actually taxed at the corporate level.

In other words, when offered the chance to eliminate double taxation of corporate profits as long as the corporate taxes were paid, the business community refused. Much as they complain about it, they like the current system just fine, thank you very much.

– Jay Bookman

457 comments Add your comment

Guy Incognito

January 20th, 2012
11:34 am

“The argument is that corporate profit is taxed once when it is earned by the corporation, and taxed again when that profit is returned to the investor in the forms of a dividend or capital gain. So of course that second level of taxation should be reduced.

That’s a legitimate point, to a degree”

OOOO, another vote for the Fair Tax………….oh no, I guess not:-( Nevermind

ByteMe

January 20th, 2012
11:36 am

Let the tax cuts from the 2000s expire already, dammit!

End the war on the impoverished!

carlosgvv

January 20th, 2012
11:37 am

Jay, the two key words here are “business lobbyists”. It’s been clear for years now that Big Business, thru their lackey lobbyists, have bought the politicians, particularly the Republicans, lock, stock and barrel. It’s also clear that this money lock is so strong that no reform is ever going to take place among either the Republicans or Democrats. The only solution is for another political party with a different philosophy to be voted into office. The American people are very patient, but even their patience has it’s limits. It’s just a matter of time.

Brosephus

January 20th, 2012
11:39 am

In other words, when offered the chance to eliminate double taxation of corporate profits as long as the corporate taxes were paid, the business community refused. Much as they complain about it, they like the current system just fine, thank you very much.

All this stuff is pure bullsh*t anyway. Not one single person can point to someone who refused to invest in something OR work to make money just because they would have to pay taxes. Companies have not quit enhancing products and/or bringing new things to market just because they would have to pay taxes on any profits they earn from it. The whole debate on taxes is nothing except a ploy to get uninformed voters to keep voting politicians into office. The prize is the limitless money available to those who write the rules.

Normal

January 20th, 2012
11:39 am

getalife

January 20th, 2012
11:43 am

Where are willards tax returns?

That is the headline of the day.

Man up willard and post them coward.

willard is too weak to be President.

RB from Gwinnett

January 20th, 2012
11:45 am

“I think most people would have problems with that kind of arrangement. So if you’re going to tax labor at twice the rate that you tax capital, you better have a very good public-policy reason to do so”

How about the money one of those families invested to obtain their 15% rate capitol gains has already been taxed at 35% prior to them investing it, Jay. For some strange reason, all you liberals keep leaving that fact out of your whinyass class warfare rants against rich people. Start telling the truth for a change.

Brosephus

January 20th, 2012
11:46 am

Why do Newt and Mitt pay such different tax rates?

One of them actually works for a living. :)

People dream of being able to live off investment money and having that 1% lifestyle. Busting your ass 9-5 will not get you there unless you’re still living in your mama’s basement and she’s paying all your bills.

ByteMe

January 20th, 2012
11:46 am

Normal: did you get to the bottom of the article? The cuts to defense will be $8 billion out of a total budget of $554 billion.

Prepare for the freak-out over that. OMG!!! We’ll be defenseless!!!

ty webb

January 20th, 2012
11:48 am

“Where are willards tax returns?”

my flux capacitor is broken…can someone go back and see when it was demanded of by anyone, and when exactly candidate obama released his tax returns?…or hillary?…or kerry?…Answers: in April 2008, April 2008, and April 2004…just a reminder, but it’s only january.

RB from Gwinnett

January 20th, 2012
11:48 am

Byte – “Let the tax cuts from the 2000s expire already, dammit!”

You do know those tax cuts were across the board, right? Is that what you want? An across the board tax increase? If so, speak up and tell the Dems in congress to propose it instead of the “tax the rich” plan they’ve been pushing.

Welcome to the Occupation

January 20th, 2012
11:49 am

Question: Why do Newt and Mitt pay such different tax rates?

Answer: Because they have successfully finagled their way — one by cynical clawing and scratching, the other by birth — into the kleptocracy that rules this rotten system.

philosopher

January 20th, 2012
11:50 am

Class warfare, class warfare! (OK, that’s out of the way, now). Anyway, one could hardly call Newt classy, now could one??

saywhat?

January 20th, 2012
11:50 am

People who already have wealth are morally superior to those who don’t. They therefore deserve to pay less tax on their income.

Brosephus

January 20th, 2012
11:50 am

How about the money one of those families invested to obtain their 15% rate capitol gains has already been taxed at 35% prior to them investing it, Jay.

How about every time money changes hands, it’s taxed at the same rate. I don’t give a rat’s ass if it’s work income, capital gains, or whatever kind of frilly label you want to put on it. Income is income. Your argument is useless because the same thing can be said about the money that Suzy’s earning working at Burger King. All money is double/triple taxed, so arguing that point is like trying to argue that water is wet.

Finn McCool

January 20th, 2012
11:50 am

The definition of the W years:

and it was evident that the Bush administration had not thought through all the details before announcing the proposal

saywhat?

January 20th, 2012
11:53 am

Rich people are rich because God loves them more. It says so in the bible.

Welcome to the Occupation

January 20th, 2012
11:53 am

Because they have successfully finagled their way — one by cynical clawing and scratching, the other by birth — into the kleptocracy that rules this rotten system.

It’s just that Romney occupies the upper reaches of the kleptocracy, while Gingrich is on the bottom edge.

The conflict the GOP nomination is staging for us is the one between the top .015, with its astronomical wealth, and the rest of the top 1%, with its still considerable wealth.

getalife

January 20th, 2012
11:53 am

You got the family values coward newt vs the 1 % candidate hiding tax returns.

You cons need a public flogging and we will do it on this blog.

Who is your master cons?

Finn McCool

January 20th, 2012
11:54 am

How about the money one of those families invested to obtain their 15% rate capitol gains has already been taxed at 35% prior to them investing it, Jay. For some strange reason, all you liberals keep leaving that fact out of your whinyass class warfare rants against rich people. Start telling the truth for a change

How about you aren’t taxing that money while it’s invested – you are taxing the profits earned on that money! For some strange reason, all you conservatives keep leaving that fact out of your math-challenged defense of the rich people.

Recon 0311 2533

January 20th, 2012
11:54 am

I can’t vouch for the accuracy or inaccuracy of this study, so no opinion there. It’s interesting that Jay includes investments, while the study evidently only discuses savings. Boring anyway because the only ones who have interest in this would be those who’ve bought into the democrats class warfare strategy, which doesn’t appear to be resonating among the majority of voters. Jay’s doing his best to push the party line but probably only reaching the lefty’s on his blog.

saywhat?

January 20th, 2012
11:55 am

God wants rich people to be able to keep as much of the money he has bestowed upon them as possible. But God doesn’t mind if we screw the poor. Its in the bible.

ByteMe

January 20th, 2012
11:56 am

You do know those tax cuts were across the board, right? Is that what you want? An across the board tax increase?

You make it sound like the cuts were equal for all people. And you know they weren’t. They were heavily tilted in favor of the upper-end of the spectrum.

What I want is what was written into law back in the 2000’s: an expiration date for a piece of legislation to actually mean something. Or is that an argument that only gets play when it comes to regulations and fees?

Finn McCool

January 20th, 2012
11:56 am

Its in the bible.

The meek shall inherit the tip of my boot.

Union

January 20th, 2012
11:57 am

finn mccool.. the money could have been taxed before and after coming out of the investment. depends on the vehicle used and the contribution method..

AmVet - A proud, card carrying member of the EOI Union.

January 20th, 2012
11:58 am

One of the funnier bumble-moments in the conman carnival last night was when Obamneycare Mitt said, “Maybe.” when King asked him if he would do the exact same thing his father did, and release 12 years worth of tax returns. But he’s not gonna apologize for his “success” though. By Elohim, Jehovah and the Holy Spirit he stepped on a ton of people to get that money and it is his!

Spiro II couldn’t win the nomination unless he and his handlers engaged in mass genocide.

Ron Paul? Interesting but sadly, quasi-emasculated by overexposure to neo-cons.

Sanitarium is desperately going for the, “Look at me, I really am stuck in the 1950s and I’m damn proud of it!” gambit. Risky, but a winner out there on the fringe.

Mittens is still John McCain II at this point…

stands for decibels

January 20th, 2012
11:59 am

Boring anyway because the only ones who have interest in this would be those who’ve bought into the democrats class warfare strategy, which doesn’t appear to be resonating among the majority of voters.

http://www.pewsocialtrends.org/2012/01/11/rising-share-of-americans-see-conflict-between-rich-and-poor/?src=prc-twitter

RB from Gwinnett

January 20th, 2012
11:59 am

“How about every time money changes hands, it’s taxed at the same rate”

I’ll buy that line of crap when you support an across the board tax rate (a flat tax, fair tax, or whatever plan you call it) that has your Burger King girl paying the same X% Romney pays. Until then, you’re rant is an outright lie. You don’t wan’t eveybody to pay, you want everybody who makes alot of money to pay everytime their money changes hands, but not the “less fortunate”

You people’s giddyness at the prospect of getting your hands on rich peoples money is just pathetic. It’s disgusting. Geez.

Jm

January 20th, 2012
12:00 pm

Because the tax code is screwed up

Eliminate the corporate income tax and you can fix it

(ir)Rational

January 20th, 2012
12:01 pm

Admittedly without having read everything, I’m going to guess that Mitt has a better financial planner and accountant than Newt does.

ByteMe

January 20th, 2012
12:02 pm

You people’s giddyness at the prospect of getting your hands on rich peoples money is just pathetic. It’s disgusting. Geez.

Someone didn’t get his Coco Puffs this morning….

ByteMe

January 20th, 2012
12:03 pm

I’m going to guess that Mitt has a better financial planner and accountant than Newt does.

Yes. And that Mitt has a LOT more money, which opens more doors than just Tiffany’s.

stands for decibels

January 20th, 2012
12:03 pm

You do know those tax cuts were across the board, right? Is that what you want?

phased in over a few years, hitting the wealthiest first, yes. I’ve said it a kajillion times, so has Jay.

Jm

January 20th, 2012
12:03 pm

Jay it is more complicated than you describe, buy generally accurate

The solution is to eliminate the corporate tax and raise cap gains – dividends tax rates to the same as those on wages

saywhat?

January 20th, 2012
12:03 pm

God must love RB best of all. Needle eyes and camels be damned.

CJ

January 20th, 2012
12:03 pm

The argument is that corporate profit is taxed once when it is earned by the corporation, and taxed again when that profit is returned to the investor in the forms of a dividend or capital gain. So of course that second level of taxation should be reduced. That’s a legitimate point,…

No it’s not a legitimate point. There are several problems with the double taxation argument.

First, with regard to investment income, a distinction should be made between dividend income, capital gains income, and carried interest income. Keep in mind, for example, that it’s possible for a business to have paid taxes on profits from which dividends are paid, but that’s not true for profits from an individual investments (capital gains).

In addition, ALL sources of income are double taxed and triple taxed and taxed again as money moves from one individual or business to another. The money in our paychecks is double taxed because our customers already paid taxes on the money used to purchase our products and services.

Despite this truth about the “double taxation” of earned income, the right use the same argument for getting rid of the inheritance tax, which is also taxes transfers of funds from individual to individual.

The double taxation argument isolates two of many points in our economy where taxes are paid by separate entities as money moves is transferred and pretends that those two points are somehow more special that any other (e.g., dividends and inheritances). Then, nonsensically, they just apply the apply the same argument to any tax that they don’t like (capital gains).

In short, the double taxation argument is a scam to get us to agree to allowing those who make most of their money from investments and inheritances (the extremely wealthy) to pay lower tax rates than those of us who set our alarms and go to work everyday.

ByteMe

January 20th, 2012
12:05 pm

barking frog

January 20th, 2012
12:06 pm

A financial transaction tax such as Sarkozy wants to
use to help save the EU would go a long way toward
eliminating our debt and would apply equally to rich
and poor.

Recon 0311 2533

January 20th, 2012
12:07 pm

Perceptions of the Wealthy

While the survey results show a significant shift in public perceptions of class conflict in American life, they do not necessarily signal an increase in grievances toward the wealthy. It is possible that individuals who see more conflict between the classes think that anger toward the rich is misdirected. Nor do these data suggest growing support for government measures to reduce income inequality.

stands if you’re trying to use a survey to prove the point that I think you’re trying to make, you may want to read them fully before you post.

getalife

January 20th, 2012
12:07 pm

frog,

Sounds like the best idea I have read lately.

Keep Up the Good Fight!

January 20th, 2012
12:07 pm

I can’t vouch for the accuracy or inaccuracy of this study, so no opinion there

Hmmm, a lack of information about the accuracy, facts or the science has never stopped that poster from blogivating his opinion about a poll, science or a situation before…. I wonder if its his coffee?

AmVet - A proud, card carrying member of the EOI Union.

January 20th, 2012
12:08 pm

“Eliminate corporate income tax.”

Stupid, stupid, stupid, stupid.

Stupid.

In any given year 60% of US corporations pay ZERO federal income tax.

If you advocated eliminating personal income tax and have the parasites at BP, et al pick up our share for about fifty years, just to return the favor, I’d be interested in that though…

Joe Hussein Mama

January 20th, 2012
12:08 pm

F. McCool — “The meek shall inherit the tip of my boot.”

I LOLed. :D

RB from Gwinnett

January 20th, 2012
12:08 pm

Byte – “You make it sound like the cuts were equal for all people. ”

They were equal for all people, Byte. They were an across the board cut. If you believe everybody should have received the same dollar value from the cut, you would be a socialist.

Brosephus

January 20th, 2012
12:09 pm

You don’t wan’t eveybody to pay, you want everybody who makes alot of money to pay everytime their money changes hands, but not the “less fortunate”

YOU don’t know what I want, so don’t go trying to project your crap on me. It’s obvious you can’t read worth a sh*t because I didn’t stratify my answer by any class grouping or financial status. Try reading for comprehension instead of projecting your “thoughts” on other people’s words for once. Maybe then, people would actually give a damn about what YOU think.

Finn McCool

January 20th, 2012
12:10 pm

Maybe you conservatives are using the wrong investment vehicles – if my investments don’t make profits, I don’t pay taxes. You might want to change brokers or somethinig.

stands for decibels

January 20th, 2012
12:11 pm

One of the funnier bumble-moments in the conman carnival last night was when Obamneycare Mitt said, “Maybe.” when King asked him if he would do the exact same thing his father did

I’ll say it again–when it comes to slapping Mitt around via unfavorable comparisons to his beloved, principled and courageous father, there’s gold in them thar hills.

AmVet - A proud, card carrying member of the EOI Union.

January 20th, 2012
12:11 pm

Uncle Sam collects under 7% of his revenue base from corporations.

Under Eisenhower it was over 30%. And if I recall my history correctly, that was a fabulously prosperous time for America.

The corporatocracy is absurdly undertaxed and why we run such huge deficits.

ByteMe

January 20th, 2012
12:14 pm

They were equal for all people, Byte. They were an across the board cut.

Really? Look at the table of changes between 2002 and 2003 here

http://en.wikipedia.org/wiki/Jobs_and_Growth_Tax_Relief_Reconciliation_Act_of_2003

and then tell me how that looks like it was applied evenly to all people across the board.

Kamchak

January 20th, 2012
12:14 pm

“Nothing comes between me and my Calvins.”

–Thomas Jefferson

RB from Gwinnett

January 20th, 2012
12:15 pm

Gigrich paid 32% and Obama only paid 23%. Doesn’t ahat make Gingrich a better American? Which one of you tools said dollard don’t matter?

Greed and envy define the Democrats these days. Nothing more. Everything you do/propose/rally around is about getting somebody else’s money for something you want but won’t pay for yourself.

ByteMe

January 20th, 2012
12:15 pm

Mitt said, “Maybe.” when King asked him if he would do the exact same thing his father did

And that plays well in the south, where following in Daddy’s shoes is important.

md

January 20th, 2012
12:15 pm

“In effect, a household making $100,000 a year by getting up in the morning and going to work is going to pay roughly twice as much in taxes as a household next door with an identical income derived entirely from investments. In terms of simple fairness, I think most people would have problems with that kind of arrangement. So if you’re going to tax labor at twice the rate that you tax capital, you better have a very good public-policy reason to do so.”

That is such a bogus comparison…….especially when Romney has already stated that he inherited nothing. Which for those that have no clue means he already PAID the larger tax rate in the process of making his money……..this bogus comparison takes none of that into account……….

Apples to oranges Jay…..and you should know that…..I’m guessing you do, but the idea is to stir the pot for the clueless…………

Recon 0311 2533

January 20th, 2012
12:16 pm

“Hmmm, a lack of information about the accuracy, facts or the science has never stopped that poster from blogivating his opinion about a poll, science or a situation before…. I wonder if its his coffee?”

Oh yeah the blog chihuahua seeking gratification that he can’t achieve any other way.

Joe Hussein Mama

January 20th, 2012
12:17 pm

RB — “Which one of you tools”

Stop looking at our tools, please. Don’t ask, don’t tell.

ByteMe

January 20th, 2012
12:17 pm

Gigrich paid 32% and Obama only paid 23%.

Seems Newtie made more than the President. Wonder why Newt wants an income cut. :)

Finn McCool

January 20th, 2012
12:17 pm

Jobs and Growth Tax Relief Reconciliation Act of 2003

I love the name of that – it didn’t result in any jobs or any growth.

TDone

January 20th, 2012
12:18 pm

Rich people have, do, and will do the things to make them rich. Poor people have, do, and will do the things to make them poor. No matter what the economic system.

I have never seen a poor man give anyone a job.

ByteMe

January 20th, 2012
12:19 pm

Which for those that have no clue means he already PAID the larger tax rate in the process of making his money

Hmm… someone doesn’t know about the “carried interest” loophole that lets hedge fund managers get taxed on their job income at the capital gains rate instead of the income rate.

getalife

January 20th, 2012
12:19 pm

Libertarian

January 20th, 2012
12:19 pm

“Much as they complain about it, they like the current system just fine, thank you very much.”

And as long as they pay for all of our candidate’s campaigns nothing will ever change.

I’d also like to point out that many small businesses are taxed at the highest rates. A lot of people don’t get that a business owner who’s business makes over $350,000 a year is in the “top 1%.” But they are in that top 1% with people like Buffet and Romney who pay 15% tax and are multi billionaires. Meanwhile, the business owner making $350,000 a year (which is a good living, don’t get me wrong) is paying 33%-35% and having to hear people everyday screaming about the 1% not paying their “fair share”.

ByteMe

January 20th, 2012
12:20 pm

Jobs and Growth Tax Relief Reconciliation Act of 2003

I love the name of that – it didn’t result in any jobs or any growth.

Who says legislators don’t get irony?

Doggone/GA

January 20th, 2012
12:20 pm

“I have never seen a poor man give anyone a job”

Yep, you have. They are the ONLY ones who give people jobs…because they buy things. What you’ve never seen is a rich man whose wealth was wholly and completed separated from the spending of those poorer then he is.

Finn McCool

January 20th, 2012
12:20 pm

bassackwardness and idiocy define the Republicans these days. Nothing more. Everything you do/propose/rally around is about giving somebody else’s money to the wealthy.

AmVet - A proud, card carrying member of the EOI Union.

January 20th, 2012
12:21 pm

In the past few years a report was released that showed that 12 major corporations, including Honeywell, Verizon and General Electric made $167 billion – yep, billion with a b – in profit, and for three years paid ZERO tax, and got $2.5 billion back from the Treasury. (Another b.)

Multiply that by the huge factor involved for countless other US corporations and you ostriches might just finally start grasping the unimaginable size of corporate welfare…

Guy Incognito

January 20th, 2012
12:21 pm

Jay,

Etta James is dead:-(

md

January 20th, 2012
12:21 pm

“How about every time money changes hands, it’s taxed at the same rate”

Somehow I don’t think the masses will like that when their own capital gains rates move up too……folks need to remember that home values, 401ks and pensions also fall into the capital gains category…..most just like to bitch when it’s somebody else’s gains being discussed.

Finn McCool

January 20th, 2012
12:23 pm

The narrative of contemporary Iraq is becoming etched in stone: United States troops are leaving, and the country is falling apart. Iraq, we are told, is once again on the brink of dictatorship, this time under Shiite politician Nouri al-Maliki, the prime minister since 2006.
http://feeds.slate.com/click.phdo?i=a0135d245febc105632a4c3130cc6d0d

Dear George W Bush,
Thank you for handing an entire country over to our enemy, Iran. Such a well thought out plan! You are a genius!
Love, Finn

Joe Hussein Mama

January 20th, 2012
12:24 pm

TDone — “I have never seen a poor man give anyone a job.”

And I doubt you’ve ever seen a rich man give anyone a job, either.

If you work for Home Depot, it’s not like Arthur Blank came to your house to give you the good news.

If you work for Microsoft, it’s a safe bet that you didn’t get a personal call from Bill Gates telling you to show up at 9 AM on Monday.

If you work for Apple, I bet you never even MET Steve Jobs.

Rich people rarely give anyone jobs. Businesses do.

barking frog

January 20th, 2012
12:24 pm

TDone, 12:18, Many small business owners are poor with
the vision of being rich. Some get rich. Most don’t, and remain
poor. Try it, you might not like it.

stands for decibels

January 20th, 2012
12:24 pm

Meanwhile, the business owner making $350,000 a year (which is a good living, don’t get me wrong) is paying 33%-35%

on a modest chunk of that 350 grand, yes. Not all of it though.

Face facts–the upper class have it pretty friggin’ sweet in the USA.

ByteMe

January 20th, 2012
12:24 pm

Meanwhile, the business owner making $350,000 a year (which is a good living, don’t get me wrong) is paying 33%-35% and having to hear people everyday screaming about the 1% not paying their “fair share”.

That person needs a different accountant. We’re near that and our tax rate is in the 20’s, just because we know where to look for deductions.

The 1% don’t pay their fair share, because the myriad deductions and loopholes are written especially for them. When 60% of corporations don’t pay taxes and yet they’re profitable, there’s something wrong with the tax code that tweaking the rates isn’t going to fix.

md

January 20th, 2012
12:25 pm

Recon 0311 2533

January 20th, 2012
12:25 pm

Well looks like Jay’s has his Bolshevik parade in full march until he rewards them with a musical recess later this afternoon and through the weekend. Y’all have fun.

Brosephus

January 20th, 2012
12:26 pm

Libertarian @ 12:19

Most people don’t think about that, but there is a reason why the tax rates are always given as “averages”. Average means that some are paying more and others are paying less.

md

If money were taxed every time it changes hands, it would probably be at a rate where some people would see an increase where others would see a decrease. That said, if everybody’s paying the same rate all the time, there’s not mutch to bitch about.

ty webb

January 20th, 2012
12:26 pm

Etta James is dead.

Another success for Obama.

Thank you President Obama.

Too bad for you cons.

md

January 20th, 2012
12:27 pm

“Hmm… someone doesn’t know about the “carried interest” loophole that lets hedge fund managers get taxed on their job income at the capital gains rate instead of the income rate.”

And does that apply to the situation with Newt and Mitt……no.

Using the exception to argue the norm isn’t a wise strategy either……..

Keep Up the Good Fight!

January 20th, 2012
12:27 pm

especially when Romney has already stated that he inherited nothing

What bullnonsense! By the time Romney’s father died, Romney had already benefited from his father’s money, wealth and contacts to create his own wealth and so the money was transfered to another generation.

AmVet - A proud, card carrying member of the EOI Union.

January 20th, 2012
12:28 pm

The masses and capital gains.

Too funny…

Kamchak

January 20th, 2012
12:28 pm

At least someone on the left is honest:

The rest of the sto-ry — Jeff Bussgang is general partner at venture capital firm Flybridge Capital Partners.

Finn McCool

January 20th, 2012
12:28 pm

Meanwhile, the business owner making $350,000 a year isn’t in the 1% but probably thinks they are close.

Delusion!

ByteMe

January 20th, 2012
12:29 pm

If you work for Apple, I bet you never even MET Steve Jobs.

Actually, this is not true. My brother worked for them for 10 years in sales and met with Steve a bunch of times. He works for Dell now in Austin and has had a bunch of conversations with Michael. I worked at HP as a lowly engineer back in the ’80’s and got to meet Bill and Dave.

The engineering-oriented companies are much flatter than you might imagine.

RB from Gwinnett

January 20th, 2012
12:30 pm

Byte – “The 1% don’t pay their fair share, because the myriad deductions and loopholes are written especially for them.”

Name one.

getalife

January 20th, 2012
12:30 pm

ty lost it.

Small businesses just wants to make a decent living.

Enough of government for the 1 %.

It was designed for all the American people not just the wealthy.

We get it cons, you carry the 1 % water and that will not change.

ty webb

January 20th, 2012
12:32 pm

explaining how lower capital gains tax benefits the masses(through charity, pensions, etc.) is an exercise in futility for the one size fits all simpletons of the left.

CJ

January 20th, 2012
12:32 pm

Somehow I don’t think the masses will like that when their own capital gains rates move up too……folks need to remember that home values, 401ks and pensions also fall into the capital gains category…..most just like to bitch when it’s somebody else’s gains being discussed.

Actually those of us who think all sources of income should be taxed at the same rates haven’t forgotten that we have 401(k)s and pensions. Believe it or not, everybody isn’t as greedy as you imagine.

But the larger point is that tax rates on earned income are and will always be higher than they need to be because earned income is subsidizing investment activity (and heirs), not just through lower rates on investment and inheritance income, but also through the ability to deduct investment losses such that, if your marginal tax rate is 25 percent and you gamble and lose $100 in the stock market, you actually lose $75 and Uncle Sam loses $25.

The bottom line is that if earned income taxes were to stop subsidizing investment activities, win or lose, taxes on unearned income could either be lowered or wouldn’t have to raised as needed to fund government services or pay down our debt.

Finn McCool

January 20th, 2012
12:33 pm

If money were taxed every time it changes hands,

Well it is the federal government that lays the foundation for safe transactions. Shouldn’t a small percentage go to that entity to make sure it continues to exist?

I mean, RB buys his Hanes from the Hanes people but the actual purchase takes place at WalMart – shouldn’t Wal Mart make a little money on that exchange so they can stay in business? Or do you hate profits that much?

md

January 20th, 2012
12:33 pm

“They are the ONLY ones who give people jobs…because they buy things.”

I’m guessing you didn’t mean to say it like that, as the poor are not the ONLY ones that buy things….

getalife

January 20th, 2012
12:34 pm

ty,

You pretend to have credibility when we all know you do not.

Bow down to the 1 %.

TBone

January 20th, 2012
12:35 pm

Why is what someone pays for taxes so compelling to some? Are you afraid you are not paying enough or they are paying too much? If you are the 50% and pay taxes chances are it is too much. Why is noble and just or even newsworthy for the media elitists to bring this to light? The only argument I see from our liberal friends is that raising taxes is the only right thing to do to pull us out of the mess we have gotten ourselves into and cutting spending of any sort is just crazy talk. In reality the other 50% that are not contributing are going to have to contribute to the tax base. How does raising someone else’s tax rate make you feel better?

AmVet - A proud, card carrying member of the EOI Union.

January 20th, 2012
12:36 pm

“…lower capital gains tax benefits the masses…”

Another rib tickler…

md

January 20th, 2012
12:36 pm

“By the time Romney’s father died, Romney had already benefited from his father’s money, wealth and contacts to create his own wealth and so the money was transfered to another generation.”

And so does the High School kid given a car by mom and Dad……or the allowance for taking out the trash…….where do you plan to draw that arbitrary line??

willie lynch

January 20th, 2012
12:37 pm

One question Newt Gringrich asked concerning the greed in America was, “What would have been wrong with a person taking $90 million in profit as opposed to $180 million?” Now everyone understands it’s within a persons rights to do this but when your fellow citizens are on the losing end of your exorbitant gain, wouldn’t you think to do what’s best for all?

This seems to be the difference in the approaches of the people who understand America as a “We the people” and the, well, Republicans.

ty webb

January 20th, 2012
12:37 pm

“ty lost it.”

no, I just finished reading “haikuish nonsense by anonymous commenters on democrat blogs of fledgling regional newspapers for Dummies” and I thought I’d give it a go…got any pointers?

ByteMe

January 20th, 2012
12:37 pm

CJ

January 20th, 2012
12:37 pm

shouldn’t Wal Mart make a little money on that exchange so they can stay in business? Or do you hate profits that much?

Corporate income taxes are only due IF there’s a profit. No profit, no corporate income taxes to pay. As you know, the tax rate 35 percent of the profit (less whatever credits and deductions you can find), so yes, they get to make a little money so they can stay in business.

That said, I agree with those who want to eliminate the loopholes and reduce the rate so that some corporations aren’t paying 35 percent of profits while others paying 0 percent of their profits.

md

January 20th, 2012
12:38 pm

“The rest of the sto-ry — Jeff Bussgang is general partner at venture capital firm Flybridge Capital Partners.”

Who happens to vote Democrat…….and doesn’t agree with republican policies. At least give the guy credit for telling it like it is………….

Doggone/GA

January 20th, 2012
12:38 pm

“I’m guessing you didn’t mean to say it like that, as the poor are not the ONLY ones that buy things”

Wrong, I did mean it that way. Sure the rich buy things, but they don’t buy enough in the aggragate to actually keep people working. It is that 99% who are poorer than they are who give people jobs and keep them in them.

getalife

January 20th, 2012
12:38 pm

I can’t help you ty.

You cons are beyond help.

Brosephus

January 20th, 2012
12:39 pm

Finn

Don’t know if that was directed at me, since I was the first to make that statement, but I have no problem with companies making profits. My concern is what you stated. Contrary to popular opinion, the government is responsible for ensuring not only our safety, but the safety of our finances, transactions, and even our food to a degree. I would much rather pay taxes to ensure this country remains great as opposed to continued tax reductions to the point that the government could no longer function worth a damn.