Romney tax returns illuminating for policy reasons, not personal reasons

Mitt Romney has released the broad outlines of his tax returns for 2010 and 2011 — $45 million in income over those two years, with $6.2 million in taxes paid. The complete returns for 2010 and more detailed estimates of what he will pay in 2011 will be released later today.

Overall, Romney paid taxes at a 13.9 percent rate. For comparison’s sake, two other wealthy men who are prominent in American politics paid a considerably higher percentage of their income in taxes in 2010: Newt Gingrich paid at a rate of 31.7 percent; Barack Obama paid at a rate of 26.3 percent.

So why that immense difference? Why did Obama and Gingrich pay taxes at almost twice the rate of the considerably wealthier Romney?

Because while Gingrich and Obama made most of their money through work, most of Romney’s income was generated by doing nothing and allowing money to make money. Under the American tax system, that kind of self-perpetuating wealth is taxed at less than half the rate of income generated through labor.

If the gap between the rich and the rest is growing larger — and it is — the tax code is making that gap worse.

And that’s really the major issue here. Based on the two years made available so far, Romney’s tax returns are useful less as a source of insight into the candidate than as a case study of the gross inequities of current tax policy.

Why should wealth be taxed at such a lower rate? And remind us again — why would it be such a terrible idea to end the Bush tax cuts for Romney and others as a way to help address the deficit problem? If we’re going to have to cut Social Security, Medicare, Medicaid and other programs that help average Americans — and at some point we will — why shouldn’t more affluent Americans also sacrifice in some way as well?

As Warren Buffett put it yesterday, Romney is “not going to pay more than the law requires, and I don’t fault him for that in the least. But I do fault a law that allows him and me earning enormous sums to pay overall federal taxes at a rate that’s about half what the average person in my office pays.”

It’s hard to argue that someone with a net after-tax income of $38.8 million — a tidy sum during a two-year period in which millions of his fellow Americans lost their jobs, homes and careers  — would suffer much if asked to contribute more.

– Jay Bookman

434 comments Add your comment

stands for decibels

January 24th, 2012
7:53 am

$6.2 million in taxes paid.

Who’ll be the first to say “that’s more than any of you Godless Librulz posting here so shut up with your wealth envy”?

Working Class American

January 24th, 2012
7:53 am

………a tidy sum during a two-year period in which millions of his fellow Americans lost their jobs, homes and careers — would suffer much if asked to contribute more.

….and the answer might be that the working/middle class are not a part of the status quo and should carry the burden of sustaining the services needed in the United States.

Doggone/GA

January 24th, 2012
7:55 am

Doesn’t you heart just bleed for his having ONLY 38.8 million to live on for a WHOLE year?

Jay

January 24th, 2012
7:57 am

That’s $38.8 million after taxes over TWO years, Dog.

robo

January 24th, 2012
7:58 am

Yes, this money was not earned through hard work and self-reliance which is one of the supposed tenets of conservatism. It is without a doubt that Romney is a major plastic phony. While I find their politics repulsive, I would rather see Santorum or Paul get the nomination since their at least somewhat true to their core beliefs. I hope that GOP voters in Florida realize this and stop the Romney Machine which is incompetent and bloated. At this stage of the game, Romney is the weakest link. He’s been running with millions of dollars in cash for five years without any fresh innovative ideas. If he gets this nomination and wins the presidency, he will truly be this country’s worst president in history. Mitt Romney is a very dull Stepford Husband who was failed governor and businessman. I think most of this country could care less if he saved the Olympics. Please, a child working as a janitor would make a better president (OK that goes far, but really, Romney?).

gadem

January 24th, 2012
7:59 am

Granny Godzilla

January 24th, 2012
7:59 am

I’m curious about Mitt and 2008 and the 45 million he loaned his campaign and how it was written off.

Did Romney pay any taxes in 2008?

gadem

January 24th, 2012
7:59 am

stands for decibels

January 24th, 2012
8:00 am

Doesn’t you heart just bleed for his having ONLY 38.8 million to live on for a WHOLE year?

no, but as Jay’s pointing out (and I’ll patiently repeat ad infinitum), it’s not about caring whether someone is just regular-rich or filthy-rich, or not. It’s about economic policy, and about what we the people need to do, collectively.

It’s not, as some will surely try to distract and re-frame in this comments thread, about what people do with their personal wealth. Nations don’t map their destiny by assuming they’ll get people to pitch in a few extra bucks here and their, paying on the freaking honor system.

also, just because it needs to be said pre-emptively–Neal Boortz sucks, and his “Fair Tax” Scientology scheme sucks worse. (I’m sure some bozo will make a pitch for it before we’ve hit 100 comments.)

barking frog

January 24th, 2012
8:00 am

As Romney said in the debate, under Newt’s tax plan,
Romney would have paid nothing.

gadem

January 24th, 2012
8:01 am

He is certainly a wealthy man, but the thing that will hurt him is that he will look to be out of touch with the average Joe. He will be labeled an elitist…

Mick

January 24th, 2012
8:02 am

Class warfare? This proves it in spades, the rich have already won that battle. The best we can do is have we the people rise and demand some equitable solution, which probably will never happen because of lobbyists and neo lobbyist consultants a la gingrich…

stands for decibels

January 24th, 2012
8:02 am

He will be labeled an elitist…

chickens, meet roost.

Doggone/GA

January 24th, 2012
8:03 am

“That’s $38.8 million after taxes over TWO years, Dog”

Oh, WELL…then my heart really DOES bleed for him. Imagine having ONLY 19.4 million that has to last for a whole year. How does he survive like that?

Atlanta Mom

January 24th, 2012
8:03 am

And, if this gentleman lived in Georgia and was 62, he would pay NO Georgia income tax starting in 2012. Thanks Sonny.

ByteMe

January 24th, 2012
8:05 am

But… but… IT’S MY MONEY!!!

Oh, wait, no it isn’t. :(

Steve Thompson

January 24th, 2012
8:07 am

In recent weeks, the mainstream media has been heavily covering the wealth of the Republican candidates. In the interest of balance, here is an article showing the net worth of President Obama:

http://viableopposition.blogspot.com/2012/01/is-barack-obama-one-percenter.html

As you can see, he is just on the margins of the one percent.

stands for decibels

January 24th, 2012
8:07 am

And, if this gentleman lived in Georgia and was 62, he would pay NO Georgia income tax starting in 2012. Thanks Sonny.

Romney turns 65 in March. (if such things interest you, Hillary Clinton turns 65 in October.)

ByteMe

January 24th, 2012
8:08 am

From the Reuter’s story:

Romney advisers stressed that the holdings in the Caymans — along with those in a Swiss bank account that was closed in 2010 after an investment adviser decided it could be politically embarrassing to Romney — were reported on tax returns and were not vehicles to avoid taxes.

Romney couldn’t conclude that pushing money offshore was politically embarrassing, so an investment advisor had to tell him?

barking frog

January 24th, 2012
8:08 am

Romney’s income tax returns are kinda like the
President’s long form birth certificate, we knew
what was there but now we got it in writing, GOTCHA!

Finn McCool

January 24th, 2012
8:08 am

Unearned income, FTW!

Doggone/GA

January 24th, 2012
8:08 am

“no, but as Jay’s pointing out (and I’ll patiently repeat ad infinitum), it’s not about caring whether someone is just regular-rich or filthy-rich, or not. It’s about economic policy, and about what we the people need to do, collectively”

Of course it is. It’s not really about how much he MAKES, it about how much of what he makes the law requires him to “give back” to help keep the country that gave him the opportunity to make that much humming along.

But given all the water carriers for the rich that will show up here, sooner or later…I will STILL have a hard time drumming up any sympathy for someone who has the money for ONE YEAR what it would take ME 690 years to earn. It would NOT break my heart if our tax laws meant he had ONLY say 15 million left.

Stevie Ray

January 24th, 2012
8:08 am

JAY,

I want to recall that Clinton reduced subject tax from 25 to 20% and the tech sector responded resoundingly. Of course it got overextended similar to mortgage debacle but interesting to note. I do agree that he should pay more, too bad that all this crying about how much is paid by the likes of Romney is moot point. Just a few more millions to go toward waste…heck, BO can assassinate a few more evil threats to our shores at $1 million per drone.

To ROBO and your anger is suspicious. Since Romney’s politics aren’t materially different from other elephant nutjobs, was as unsuccessful as any governor, and quite successful as a business man. Envy may be appropriate allegation in your case.

Recon 0311 2533

January 24th, 2012
8:09 am

After tax dollar investments that produce profits and are then taxed at 15% shouldn’t be a target for concern. Penalizing success won’t lift up those who’ve been less successful. It only provides the government with more money to waste and that should be the target of concern.

‘You cannot further the brotherhood of man by inciting class hatreds.” Abraham Lincoln

kayaker 71

January 24th, 2012
8:10 am

Here we go again…… Buffet is right. Why demonize those who are wealthy in our society and ignore the tax code that allows them to be this way? Doing so is nothing but wealth envy. If you took away everything that the 1%ers have….. every asset…… and used it to pay down our national debt, we could get roughly 5 months out it. Pocket change compared to our national debt. You are demonizing the wrong thing, libs. Government spending and accumulation of debt will not be cured by raising the tax rate to 39% for those who are wealthy….. not by a long shot. It will only be addressed by stopping this insane spending.

Mary Elizabeth

January 24th, 2012
8:10 am

“This country does in fact have a serious deficit problem. But the reality is that the deficit was caused by two wars – unpaid for. It was caused by huge tax breaks for the wealthiest people in this country. It was caused by a recession as result of the greed, recklessness and illegal behavior on Wall Street. And if those are the causes of the deficit, I will be d*mned if we’re going to balance the budget on the backs of the elderly, the sick, the children, and the poor. That’s wrong.”
Sen. Bernie Sanders (I -VT) Senate Budget Committee, 11-18-1011
============================

Sen. Sanders is correct, of course, and I salute him for having said it.

Finn McCool

January 24th, 2012
8:10 am

he is just on the margins of the one percent.

LOL, you have no concept of the amount it takes to be in the 1%, do you? hehehe

robo

January 24th, 2012
8:11 am

…and this is all not about class warfare. Indeed, congratulations to Romney on working hard at one point in his life to become wealthy during his “Mad Men-lookalike days” at Bain. But, with that experience as a businessman, he is one of many who have the ability to become a real job creator. Romney’s record proves that he is no such person. Thusly, he ought to pay the same rate as Newt. Romney is simply not ready for prime time.

ByteMe

January 24th, 2012
8:11 am

I want to recall that Clinton reduced subject tax from 25 to 20% and the tech sector responded resoundingly.

Poor recall. The tech sector took off because of the internet and Y2K.

Reagan raised taxes numerous times and the economy took off. So what?

Causation not shown.

Keep Up the Good Fight!

January 24th, 2012
8:12 am

So if we lower his tax rate to 5%, how many more jobs will he create? He needs how much more incentive to make money?

Doggone/GA

January 24th, 2012
8:13 am

” But, with that experience as a businessman, he is one of many who have the ability to become a real job creator. ”

No matter how often something like this is said, it’ NOT the rich who create jobs. It’s their CUSTOMERS who create them.

Stevie Ray

January 24th, 2012
8:13 am

MICK,

Class warfare is the most ridiculous, dramatic term in the political vocabulary. The disparity of income may or may not be a problem…if you take a few more million from Romney how does it help you. Also who do you think allows these policies that allow those most able to pay the least amount of taxes?

Why not spend some time to be original..

td

January 24th, 2012
8:14 am

stands for decibels

January 24th, 2012
7:53 am
$6.2 million in taxes paid.

Who’ll be the first to say “that’s more than any of you Godless Librulz posting here so shut up with your wealth envy”?

I would say it but you beat me to the punch this morning. I would have used the word socialist instead of “Librulz” but the rest of the statement is true enough.

GM

January 24th, 2012
8:14 am

Fear not he could have made 1 billion and layed off millions at his companies and Newt could have had 6 wifes, this would not matter to the retards on the right, they are so hell on getting Obama out the man who earned his money the honest way and who held his family values while in office.

I wonder which generation of conservatives whites are the most dumbest and hateful? I think think this generation wins out, at least the one with the klan ended up puting country first, poor Obama ended up killing more terrorist then any President to keep this country safe yet these bigots of so called Americans on the right are out there demanding birth certificates, and calling him a communist sociallist, Mitt and his crews are making a killing off middle class low class whites, go figure

Finn McCool

January 24th, 2012
8:14 am

We should lower Mitt’s tax rate so he can create more jobs in China.

TaxPayer

January 24th, 2012
8:16 am

Poor Newt. Paying a higher tax rate than Mitt. Can’t you just feel his pain. But wait! Newt’s own tax plan would yield an even lower tax rate for Mitt relative to his own. So he must want it to be that way. Why is he whining about it then? I think we know the answer and it is not because Newt is actually a closet Democrat. :lol:

td

January 24th, 2012
8:16 am

“$6.2 million in taxes paid”

That is $6.2 million more then the bottom 47% paid combined.

robo

January 24th, 2012
8:17 am

Who knows how much Mitt is hiding in the Caymans…..Yes, with Mitt’s track record, even if he were inspired to create jobs, they would most likely be in Bangladore and China.

stands for decibels

January 24th, 2012
8:17 am

Just a few more millions to go toward waste…

gotta love that can-do attitude!

TaxPayer

January 24th, 2012
8:17 am

If I didn’t have to pay taxes, I would be willing to hire me several Republicans at $0.73/hour. But they better not slack off.

barking frog

January 24th, 2012
8:18 am

Mitt should be asked to show how many more jobs he created
than Newt with the lower tax rate.

TaxPayer

January 24th, 2012
8:18 am

I see td still has not learned what we all pay taxes on.

Recon 0311 2533

January 24th, 2012
8:19 am

“It’s their CUSTOMERS who create them.”

Who creates a customer or how are they created?

stands for decibels

January 24th, 2012
8:19 am

That is $6.2 million more then the bottom 47% paid combined.

yay! slipped in just under the half-hour mark

Finn McCool

January 24th, 2012
8:19 am

Say what?????????????????? Asia is moving ahead in science NOT because Asian countries are spending on R&D in Asia but because AMERICAN companies are spending on R&D in Asia???????

The National Science Foundation has just released its biennial report on global investment in science, engineering and technology. The NSF warns that the United States is quickly losing ground to Asia, especially to China. America’s share of global R&D spending is tumbling. In the decade to 2009, it dropped from 38 percent to 31 percent, while Asia’s share rose from 24 to 35 percent.

One big reason: According to the NSF, American firms nearly doubled their R&D investment in Asia over these years, to over $7.5 billion.

http://www.salon.com/2012/01/23/the_secret_to_making_american_workers_competitive/

Thanks American companies!!

Keep Up the Good Fight!

January 24th, 2012
8:19 am

td: $6.2 million in taxes paid” That is $6.2 million more then the bottom 47% paid combined

Ahh more of the no taxes paid crowd have shown up to spout foolishness proven inaccurate time and time again. Okay td, time to show your work. Don’t forget sales taxes and all the other taxes paid by those 47% and while we are at it, how about the 1400 or more taxpayers who paid nothing on their millions.

Or just admit that you post foolishness. Bet you can’t tell the truth.

Fly-on-the-Wall

January 24th, 2012
8:20 am

Everyone should pay their fair share and 15% on unearned income isn’t fair. There shouldn’t even be a distinction between incomes – it is ALL income regardless of the source. Tax them all the same.

And – NO – it will not give more money to the government to waste. It will give us the funds necessary to upgrade our infrastructure so we can actually move into the 21st century and complete with the rest of the world that has already done that.

Peter

January 24th, 2012
8:21 am

How are we going to change the TAX CODE, when the rich are in charge ?

Finn McCool

January 24th, 2012
8:22 am

from the same link:
GE recently announced a $500 million expansion of its R&D facilities in China. The firm has already invested $2 billion.

GE’s CEO Jeffrey Immelt chairs Obama’s council on work and competitiveness.

We are sooooooooo screwed…..

Stevie Ray

January 24th, 2012
8:22 am

BYTETHMOI,

Good morning. My point is that any correlation between government action and actual results is very difficult to link. Everyone believes all the talking points about how government can affect job creation but no definite correlation can be concluded. The investment in dotcom companies produced record tax revenues for Clinton era….even he admits that this was a great help but with the exception of the timing of recognizing investments, I still see no correlation since if he left the rate at 25%, unlikely that would have measurable impact on recogntion by stock holders.

These things make great talking points for the info based biased folks, but have no reality in result.

Mick

January 24th, 2012
8:23 am

td

January 24th, 2012
8:23 am

Yes, lets raise the capital gains tax rate. Lets make the teachers and firefighters retirement plans pay double their tax rates so their funds can be underfunded and the tax payers can bail them out. Let make it so that the senior citizen can live of 15% less money and be able to start receiving food stamps and having to cut their pills in half again. Let us not forget that we must punish hard work. If a person works hard and puts some money back to have a better life later and has already paid taxes on the original money then let us punish the person for not spending all that money to begin with.

Is this not what you libs solution to the problem is?

Mona Lawrence

January 24th, 2012
8:23 am

How many jobs has he created with such wealth in the last 5yrs ????

ByteMe

January 24th, 2012
8:24 am

Here’s something to consider:

Studies have shown that changes to the tax code — regardless of direction — work their way through in about 4-5 quarters. After that, it has limited effect on GDP.

But it does have a difference on the amount of debt the government runs up on our behalf.

Repeal the tax changes from 2001 and 2003 after the election and reap the improved economic situation in 2016!

Jay

January 24th, 2012
8:25 am

“Who creates a customer… “

Their mommy and daddy.

… or how are they created?

Sorry, this is a family-friendly blog. If you want to know HOW, Recon … ask YOUR mommy and daddy.

Granny Godzilla

January 24th, 2012
8:26 am

It is grossly unfair that income from WORK is taxed at a higher rate
than income from investment.

ByteMe

January 24th, 2012
8:27 am

Everyone believes all the talking points about how government can affect job creation but no definite correlation can be concluded.

There’s definitely correlation between the types of government programs and the velocity of money, which is a major component of GDP. Taxes for wealthy people doesn’t increase velocity of money; unemployment payments do (since the unemployed spend it immediately on items like food).

Stevie Ray

January 24th, 2012
8:27 am

GM

That may be the single most ridiculous post of the week. Far from being a Romney supporter, his 5 or so “failed” investments at Bain resulted in about 6000 job losses while Staples alone (granted only 10% player) generated 90k jobs thus far. Also, most of BO’s income is from book sales from that trash he published…without name in spotlight, it wouldnt get published. If you think that BO isn’t practicing cronyism with our cash, you are gullible and should change the channel from MSNBC or America Left for a change.

td

January 24th, 2012
8:28 am

Keep Up the Good Fight!

January 24th, 2012
8:19 am
td: $6.2 million in taxes paid” That is $6.2 million more then the bottom 47% paid combined

Ahh more of the no taxes paid crowd have shown up to spout foolishness proven inaccurate time and time again. Okay td, time to show your work. Don’t forget sales taxes and all the other taxes paid by those 47% and while we are at it, how about the 1400 or more taxpayers who paid nothing on their millions.

Or just admit that you post foolishness. Bet you can’t tell the truth

I thought we were discussing Federal income taxes paid? My statement is totally accuate to that point. The $6.2 million Romney paid is just in Federal income taxes. We do not know how much he paid in sales tax, property taxes, state taxes or any other. Have to compare apples to apples here.

Steve - USA (I support "None Of The Above")

January 24th, 2012
8:29 am

Romney was never in the House or Senate so he never made any decisions that produced tax policy. He didn’t make the rules he just played by them.

He paid more in taxes and gave more to charity than I did you so: Thank you Mr. Romney

George P. Burdell

January 24th, 2012
8:30 am

I think it is important to remember that there is a difference between your marginal tax rate and your effective tax rate. 13.9 percent may seem low, but it is still higher than a large majority of tax payers, including most of us. Using 2008, the top 1% pay on average 23.27%, the next 4% pay 17.21%, the next 5% pay 12.44%, the next 15% pay 9.29%, the next 25% pay 6.75%, and the last 50% pay only 2.59%. While Romney and Buffets rates may seem low, there are less than 10% of taxpayers that pay a lower effective rate. There is of course variability from one individual to another, but Newt and Obama are more the exception than the rule. I think it is important to remember the distinction between marginal and effective tax rate and that point is being muddled in the discussion. I pay income tax at the 25% rate on a portion of my income, but my effective tax rate is under 10%.

Peadawg

January 24th, 2012
8:30 am

“non existent welfare queens”

Just b/c YOU haven’t seen one doesn’t mean they don’t exist at all.

carlosgvv

January 24th, 2012
8:31 am

It’s no supprise whatsover that our bought and paid for Congress will benefit their wealthy patrons any way they can, including making tax laws that benefit the rich while sticking it to the poor. And naturally, the simple tool Republicans here will accuse me of spreading “wealth envy”. One can only wonder how much longer the electorate will put up with this.

JamVet

January 24th, 2012
8:32 am

“Penalizing success”.

“Demonizing wealth”.

“Class warfare”.

“Punishing hard work”.

As always, you cons have your own language. One that is not remotely rooted in reality.

And thus the impossibility of having any intelligent discourse with most of you.

BTW, the pigs at the trough like Newt have never “worked a hard day” in their lives.

And I suspect neither have most of you paper shuffling Republicans, whose greatest threat of injury on the job is a paper cut.

All hat, no cattle…

Stevie Ray

January 24th, 2012
8:34 am

BYTEME,

Find me an economist who supports your position and I will find you one who doesn’t. Since we waste and pay debt with so much of our tax dollars plus change policies every 6-8 years, who really knows. Surely you can’t point to the stimulus crap as an example…

Finn McCool

January 24th, 2012
8:35 am

The strategic responsibility for making Americans more globally competitive can’t be centered in the private sector because the private sector is rapidly going global, and it’s designed to make profits rather than good jobs. The core responsibility has to be in government because government is supposed to be looking out for the public, and investing in public schools, colleges, infrastructure and basic R&D.
http://www.salon.com/2012/01/23/the_secret_to_making_american_workers_competitive/

Stevie Ray

January 24th, 2012
8:36 am

STEVE,

Stop making sense! Jays column supports your point. Too bad most of the posters here only offer talking points from their favorite pundits who supply their opinions…

Agreed

Doggone/GA

January 24th, 2012
8:37 am

“That is $6.2 million more then the bottom 47% paid combined.”

And that says a LOT about what poor shape our economy is in right now.

Normal

January 24th, 2012
8:38 am

You don’t recon that ol’ Newt thought his Tiffany’s account was a tax write off do you?

Brosephus

January 24th, 2012
8:41 am

Because while Gingrich and Obama made most of their money through work, most of Romney’s income was generated by doing nothing and allowing money to make money. Under the American tax system, that kind of self-perpetuating wealth is taxed at less than half the rate of income generated through labor.

There’s much less sweat equity involved, therefore the tax rate is lower. :)

On a serious note, why would anybody expect things to be any different. When the majority of our Congress belongs to the top 1%, what else would anybody expect? The salary of Congress alone easily puts them in the top 20% of income earners in the country, and probably the top 10% as well. Why would the rules NOT be written to protect those with means as opposed to those without. How many of us would NOT write to rules to protect self interests if we had the chance to write legislation?

Now, I’ll go back and read the comments. I’m sure there’s some good comedic relief out there.

Rabbit

January 24th, 2012
8:42 am

Think Newt will attach to your argument, Jay? Unlikely, but he has flirted with it already. The GOP establishment has a vein popping out in their collective temple.

Steve - USA (I support "None Of The Above")

January 24th, 2012
8:44 am

Brosephus@8:41

True….there is no interest like a self interest. :)

Red

January 24th, 2012
8:47 am

I though a tithe was 10%. Romney only gave $1.5 to the Mormon Church- isn’t that less than a tithe?

ByteMe

January 24th, 2012
8:48 am

Find me an economist who supports your position and I will find you one who doesn’t

Show me an economist who has studied the issue and I’ll show you one who takes the same position :)

Same with climate science. Lots of FUD by people who aren’t climatologists.

Cowering CNN Moderator

January 24th, 2012
8:48 am

So change the tax laws and either force the wealthy to pay at least 50% on all earnings, or if under 50% allow the wealthy to either pay the difference in taxes OR donate it to meaningful charities?

Generation$crewed

January 24th, 2012
8:48 am

what percentage should he be paying?

TaxPayer

January 24th, 2012
8:48 am

The Republican Party constituency must be thoroughly confused by the exchange between Mitt and Newt. Should the wealthy pay more taxes as Newt suggests now and how does he reconcile this position with the well-established Republican mantra that job creators must pay no taxes or else they will take away the jobs. The party constituency’s heads must be essploding all around us. Watch out! They make such a mess when they go off.

ByteMe

January 24th, 2012
8:50 am

what percentage should he be paying?

Same nominal rates as a millionaire who makes his money via a salary for work performed.

JOEL

January 24th, 2012
8:51 am

Yet another reason why investment income is taxed at a lower rate… We all know that money was already earned by the individual who invest it. When they invest the money they also stand a chance to lose it, correct? When you go to work for someone, you take no risk, you are definitely getting a paycheck. This is not the case in investing.

Paul

January 24th, 2012
8:53 am

g’morning, sfd at 7:53

“Who’ll be the first to say “that’s more than any of you Godless Librulz posting here so shut up with your wealth envy”?”

td at 8:16 “That is $6.2 million more then the bottom 47% paid combined.”

You’re getting pretty good at predicting probable outcomes, you know that?

g’morning, newbie robo

Some bloggers use a tag line or identifiable line in their posts. You may want to end yours with

“Rah, Rah, Sis Boom Bah! Newtie, Newtie, RahRahRah!!!”

:-)

ByteMe

January 24th, 2012
8:55 am

When they invest the money they also stand a chance to lose it, correct?

Yes, and they get a deduction against future (or concurrent) gains.

Soothsayer

January 24th, 2012
8:56 am

stands for decibels

January 24th, 2012
8:56 am

Romney only gave $1.5 to the Mormon Church- isn’t that less than a tithe?

Maybe the LDS considers capital gains to be tithed differently.

I did a bit of googling–the official church website didn’t reveal anything immediately, but if someone feels like drilling down, here it is.

http://lds.org/ldsorg/v/index.jsp?locale=0&sourceId=e141f73c28d98010VgnVCM1000004d82620a____&vgnextoid=bbd508f54922d010VgnVCM1000004d82620aRCRD

Brosephus

January 24th, 2012
8:57 am

“Greed is good.”

–Thomas Jefferson

ByteMe

January 24th, 2012
8:57 am

Here’s a funny thought: had Romney run as a Democrat, I might have voted for him, because he wouldn’t have had to change so many of his positions.

Mystery Meat and AmVet's Official Occupying Leghumper.

January 24th, 2012
8:57 am

JamVet, I think you’re using a fairly large brush to paint your picture. There are plenty of hardworking middle and low income Republicans that get their hands dirty to earn a meager income. It’s hard to comprehend, but I think the reason this class of income earners props up the rich is because they actually think they can become one of them. Obviously, the chances are slim.

JOEL

January 24th, 2012
8:58 am

Byte,

Absolutely they get to deduct it, just like they pay taxes if they make money on it.

Brosephus

January 24th, 2012
8:58 am

When you go to work for someone, you take no risk, you are definitely getting a paycheck.

Not if you’re straight commissioned. You don’t get a paycheck if you’re fired as well. Yet, you can’t use that income loss to offset your taxes for the following year.

Paul

January 24th, 2012
8:58 am

Okay, gotta do the on-topic thing.

So…. should the equalizing earned and unearned income tax rates apply only to people? Should retirement savings be tax exempt? If we want to tax everyone’s income the same, are savings off limits? Retirement savings? So what happens to pension funds for teachers, cops, firefighters, union members? We going to tax those contributions before they go into the fund? Or do we slice off 39% from pension funds? And if it’s an employer-provided contribution, so what? It’s designed to end up as income for an individual, so shouldn’t we tax it?

________________________________________

There are public support pitfalls in taxing investment income at earned income rates in states like Florida with a high retiree population, which is likely one reason Romney advocates eliminating any tax on investments for taxpayers with AGIs below $200k.

TaxPayer

January 24th, 2012
9:00 am

JOEL,

Are you trying to say that workers take no risk? Is that because the enemy’s bullets bounce of our soldiers. Is that because oil refineries have perfect safety records. How about sugar refiners? Do they ever go boom? … Personally, I feel very secure sitting at my desk shuffling money between stocks and bonds and watching those dividends come in. Then again, who knows what sort of deadly radiation is leaking out of my LCD monitor. Never mind. I feel very unsafe all of a sudden. What if I lose my internet connection. My entire portfolio would be in jeopardy because I would not be able to monitor it… I could lose everything. The companies I invested in could go bankrupt and all those employees with their secure jobs could suddenly stop earning me my money and they’d have to move on to other secure, risk-free jobs and… I feel faint. How about you.

stands for decibels

January 24th, 2012
9:01 am

You’re getting pretty good at predicting probable outcomes, you know that?

Fish in a barrel, Paul. Fish in a barrel.

Brosephus

January 24th, 2012
9:05 am

Paul

You raise a very interesting question. I know that, if I withdraw money from my retirement account before I’m retired, I get taxed on it big time. Is that not the same thing as earning income from dividends and other investment vehicles? Why can someone live off of investment earnings at a lower tax rate, but if I borrow into my investment money, I’m taxed far higher than 15%?

Doggone/GA

January 24th, 2012
9:06 am

“You don’t get a paycheck if you’re fired as well”

and you don’t get a paycheck if the company goes under

Paul

January 24th, 2012
9:07 am

Red

“I though a tithe was 10%. Romney only gave $1.5 to the Mormon Church- isn’t that less than a tithe?”

Good question. I asked an LDS friend. Tithe is 10 percent. Their guidance says 10 percent of their increase. They do not dictate how that is computed. The leave it up to the individual. Some do it based on gross income, some on net. Some include the value of employer-provided benefits, some don’t.

I like the idea they don’t make a big deal of it and leave it up to the individual.

sfd – your 8:56. Nice job with source material -

JOEL

January 24th, 2012
9:07 am

Taxpayer,

Turning up the drama a little high for 9 am, huh?They are not taking monetary risk. Yes, accidents do happen on the job. This country is extremely safe to work in. Everybody chooses their job know that things could go wrong. They go to work and get a paycheck. Do companies go out of business? Yep!

scott

January 24th, 2012
9:07 am

It is so simple. The money has already been taxed at the higher rate when he first earned it. It was also already taxed by the companies that made the profit. How hard is it for you guys to understand such a simple concept? If you really want to start talking about being fair, why are we not questioning why a majority of the people do not pay anything at all. Why is it that there are people out there that have a few hundred bucks taken out of their taxes throughout the year and then get a nice big huge refund that far surpasses the amount taken out? To me, THAT is unfair. You want fairness? Then by all means, let’s have fairness. Let’s have everybody pay the same amount regardless of how much you make. I really do not care about what rate you tax it at…..just make everybody pair the same. After all, we are all taking advantage of the same services being offered with this tax money. Defense, infrastructure, etc. I am just so sick of hearing this over and over again without the other side of the argument ever being questioned.

ByteMe

January 24th, 2012
9:08 am

I want a deduction against future income in case I’m fired, too.

Look Beyond the Numbers

January 24th, 2012
9:08 am

Imagine the catastrophic impact if capital gains rates were significantly raised. A very significant portion of money currently invested in the stock market would be pulled out to lock in gains. Remember, income that is currently invested was originally earned and taxed at ordinary rates (setting aside carried interest for the time being). If we want to encourage investment in our markets, eliminating the long term capital gains rates will be catstrophic.

Also, don’t forget what Judge Learned Hand famously wrote:

“Anyone may arrange his affairs so that his taxes shall be as low as
possible; he is not bound to choose that pattern which best pays the
treasury. There is not even a patriotic duty to increase one’s taxes.
Over and over again the Courts have said that there is nothing sinister
in so arranging affairs as to keep taxes as low as possible. Everyone
does it, rich and poor alike and all do right, for nobody owes any
public duty to pay more than the law demands.”

JOEL

January 24th, 2012
9:09 am

Brosephus,

You get taxed for taking money out of a specifically alotted retirement fund early because that money was either not taxed initially, or taxed at a lower rate. Depending on the tyoe of retirement fund.

td

January 24th, 2012
9:09 am

ByteMe

January 24th, 2012
8:50 am
what percentage should he be paying?

Same nominal rates as a millionaire who makes his money via a salary for work performed.

So you think a person that worked hard, paid taxes on wages and saves some money to invest should pay the same rate on that money as he paid on the original money? If he spends all his money then he only has to pay sales tax on the money (7 or 8%) and if he saves the money and invest it then he should pay 35% on the money earned?

Now with you logic why should a person invest their money in a capital invest company that creates jobs?