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
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434 comments Add your comment
md
January 24th, 2012
10:08 am
“He didn’t. Was a passive income gain.”
Passive gain?? You mean there was no risk involved?
It can hardly be passive if one also stands to lose the entire investment…….
St Simons - we're on Island time
January 24th, 2012
10:08 am
The Pahhty of Hoarded Wealth
wealth that did not create a single job except for a bean counter like me
wealth that is dwarfed by the wealth that is hidden offshore
i guarantee you
and a party that is willing to shut the govt down and give 300 million
of us a Double A rating over protecting them
I do this every day, and i keep typing the truth – the game is fixed,
if you don’t understand that, i don’t know how you feed yourself &
remember to breathe.
The People are done with this System. Time for a New one.
Its like my Elders knew a thousand years ago. Here is where
the human race makes the Change. At the end of 2012
will be the epic change from the old philosophy to the new.
I know. I get it. Change is scary. That’s why Hope comes first.
Some form of glorified feudalism is all you know. We’ve been
living like this since Roman times.
You can shake your feeble fist at the wind & the tides all you want,
but you cannot stop it. Here we go.
ByteMe
January 24th, 2012
10:09 am
Get rid of the corporate tax rate and raising capital gains tax rates is perfectly fine
Why aren’t corporate profits not paid to investors ok to avoid taxation? If I become a corporation, does that mean I can stash my wealth in the corporation until I repurpose it for my own use and then it gets taxed at a low rate (because I’ll figure out a way not to use very much of it all at once)?
JOEL
January 24th, 2012
10:09 am
Enter your comments here
Matti
January 24th, 2012
10:09 am
I watched an interesting piece on public television last night (I know… it’s a sure sign I’m getting old) about British “manor houses” during the Edwardian era. It highlighted the extreme discrepancy between the extravagant wealth of the aristocracy and the lives of their lowly servants, how this system was enforced and perpetuated, and how it eventually came crashing down on those who turned a blind eye to the consequences. (Example: a home’s ballroom drapes: equivalent of $3.5 million, kitchen maid’s salary for working 364 17-hour days: $28 a year.) No such thing as upward mobility, no matter how hard a peasant worked. The sinking of the Titanic became a glaring billboard for the inequities when only the privileged were privileged enough to get lifeboats, and then WWI resulted in such horrific casualties that the imperative to adhere to the established social structure quickly disintegrated.
It was easy to watch and think, “Gee, if they’d only treated their serfs a little more humanely, paid them a little more, and spent just a fraction less on their own jewelry and horses, things would have been so much better!” But they held to their “greed is our right” principles to their own eventual demise. They screwed the people they depended on in order to BE who they were, and they lost their empire. (Many had to marry rich Americans to keep their estates afloat. OH, the horror!)
Can we learn from history? Or will the rise of the American aristocracy at the expense of everyone else require widespread nastiness to rectify? Is a man with eight houses really BETTER than a man with no roof over his head? Does it have to be this way?
md
January 24th, 2012
10:10 am
“I think she talking about outside investors and not the investment from the owner.”
All relative to scale………doesn’t change the need for “investment”.
ByteMe
January 24th, 2012
10:11 am
Passive gain?? You mean there was no risk involved?
Since when does the word “passive” imply no risk? If you’re passive with your job, is there not a risk?
retired early
January 24th, 2012
10:11 am
Step away from the capital gains tax rate argument for a moment and look at other deductions which greatly favor the wealthy; Mortgage interest deductions for example. Is it fair to allow multi million dollars mansions to be deducted from “earned income”, while the “renter” cannot deduct a “dime” of income.
This is where the tax code needs changing, not on capital gains. When these mansions are sold, there is NO CAPITAL GAINS ON THE PROFITS.
Please tell me how you rationalize this disparity between the rich and the poor as being “fair”.
(ir)Rational
January 24th, 2012
10:11 am
So just out of curiosity. What happens to the economy if people like Romney and Buffett and other investors like that were to take their money out of the economy to avoid taxes? I mean, with no income you pay no taxes. So what happens then? I’m pretty sure they would be fine, but what about the economy? Do they serve a purpose in the economy too? Or do they just serve a purpose in that they’re good “cannon fodder” for political rhetoric?
mm
January 24th, 2012
10:12 am
“Obviously my words will fall on deaf ears with this crowd, but there is a critical difference between money earned via labor and money made through investing.”
Your prediction is correct.
“One has a billion dollar warchest to seek re-election.”
The righties keep repeating this ad nauseum, but that still doesn’t make it true.
A Tax Cheat or A Wife Cheat (Is this the Best Republicans Have To Offer?)
January 24th, 2012
10:12 am
@Mick
January 24th, 2012
8:23 am
Blame it all on the non existent welfare queens-
******************************************************************
Blame it on the:
56% of WHITES get food stamps
24% of BLACKS get food stamps
14% of HISPANICS get food stamps
YEAH……………Put the blame where it belongs.
HowMUCHisENUF
January 24th, 2012
10:13 am
You liberal bed wetting SOB’s How much is enough? Fact is, nearly half pay NO income tax. How many jobs have you ever got from a POOR PERSON? There is ALWAYS going to be someone that wants to cook french frys and do the bare minimum to get by.
stands for decibels
January 24th, 2012
10:13 am
It’s like asexual reproduction in biology.
only in this case, hundreds of millions still get screwed.
/drive-by
TaxPayer
January 24th, 2012
10:14 am
So Gingrich complains about Mitt’s low tax rate yet proposes to cut it in his own tax proposal. Is that right, er, um, I mean, correct. He thinks Mitt pays too much in taxes and that’s why he whines about him paying too little in taxes.
Doggone/GA
January 24th, 2012
10:14 am
“Can you name a few?”
I can name at least 2 family owned companies that are not publically traded. Since they are private, I have no way of knowing of, or if they have, an institutional investors:
S C Johnson
Cox Enterprises
Joseph
January 24th, 2012
10:14 am
You failed to mention the $7 million of charitable giving that the Romneys donated. Add that to the enormous amount of taxes they paid and his rate of giving goes way up don’t it????
ByteMe
January 24th, 2012
10:14 am
What happens to the economy if people like Romney and Buffett and other investors like that were to take their money out of the economy to avoid taxes? I mean, with no income you pay no taxes. So what happens then? I’m pretty sure they would be fine, but what about the economy? Do they serve a purpose in the economy too?
It means they would have no “income”, not no money. And they would have to spend some of their assets to live, so that money goes into the economy. 70% of the economy is consumer spending, NOT investment money. Eventually no income and their assets depleating, they would have to get a job (or not, if you’re as rich as they are). But that’s pretty much true of everyone.
As an aside: This is why a flat tax that takes more tax money from poor people is a really stupid idea… because it’ll cut into consumption from the very people whose consumption drives the economy.
Welcome to the Occupation
January 24th, 2012
10:16 am
ByteMe: “You’re assuming that what he’s saying now is exactly what going to happen when he gets into office”
Oh I see what you’re saying.
Well that’s certainly true, as the example of our current president amply demonstrates. By which I mean that he played a nice little trick on his supporters, sticking to his promises in some narrow legalistic sense but in a broader sense deliberately inflaming the desire of many people for radical transition with no intention of actually doing so. And I see no reason that a president Newt Gingrich wouldn’t continue dancing to that beat perfectly, a right wing Barack Obama if you will.
It’s a great example of the increasing contempt that leaders hold for their democratic populaces.
Usually there is at least a tentative connection between what a president
Steve - USA (I support "None Of The Above")
January 24th, 2012
10:17 am
retired early@10:11
A. I didn’t know everyone who owned a home and claimed the Mortgage Interest deduction was rich.
B. I thought there was a $250,000 limit before you had to pay capital gains on your primary residence.
Perhaps St. Simons could help with this because this seems to be his area of expertise.
retired early
January 24th, 2012
10:18 am
Matti
Public TV is too educational for many on this blog. They prefer their daily feed of propaganda from their puppet masters on the right.
CJ
January 24th, 2012
10:18 am
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.”
You can’t fault Romney for the current law. But he’s running on proposals that would exacerbate the problem. He wants to make the Bush tax cuts permanent, including cuts to tax rates on unearned income.
Adding insult to injury, Romney wants to eliminate the inheritance tax. The argument that applies to taxing investments at the same rates as labor also applies to taxing inheritances at the same rates as labor. No source of income should receive special tax treatment, including income you lucked into by being born into a wealthy family.
TaxPayer
January 24th, 2012
10:18 am
What happens to the economy if people like Romney and Buffett and other investors like that were to take their money out of the economy to avoid taxes?
When investors take their money out of the economy, we typically end up going through a downturn of some magnitude. As for the avoiding taxes part of that question, that depends on many factors including the timing of pulling out said money and it it resulted in a gain or loss, etc.
Welcome to the Occupation
January 24th, 2012
10:19 am
Joseph: “You failed to mention the $7 million of charitable giving that the Romneys donated”
Charity is voluntary, Joseph, and as they say, therein lies all the difference.
So from the standpoint of society as a whole, charity is essentially irrelevant.
I love this latest right wing meme to collapse the distinction between compulsory taxation and charity.
ByteMe
January 24th, 2012
10:20 am
Well that’s certainly true, as the example of our current president amply demonstrates.
That’s why it’s all an ink-blot test. We project on our candidates that which we want to see in them, but the reality of governing is so filled with messy compromises, that what we want isn’t necessarily what we end up with and we have to be satisfied with moving the ball in the direction we want to go and not get caught up in the details.
A Tax Cheat or A Wife Cheat (Is this the Best Republicans Have To Offer?)
January 24th, 2012
10:20 am
@Matti
January 24th, 2012
10:09 am
I watched an interesting piece on public television last night (I know… it’s a sure sign I’m getting old) about British “manor houses” during the Edwardian era. It highlighted the extreme discrepancy between the extravagant wealth of the aristocracy and the lives of their lowly servants.
Can we learn from history? Or will the rise of the American aristocracy at the expense of everyone else require widespread nastiness to rectify? Is a man with eight houses really BETTER than a man with no roof over his head? Does it have to be this way?
******************************************************************************
This country suffers from SELF-RIGHTEOUS HEDONISM and social inequality.
Until we stop the class warfare between the haves and have nots it will always be that way.
Jm
January 24th, 2012
10:20 am
Byteme
Fine. If you want a corporate tax rate, then you have to have a lower cap gains tax to be fair
ByteMe
January 24th, 2012
10:22 am
Fine. If you want a corporate tax rate, then you have to have a lower cap gains tax to be fair
No, that’s not where I’m going with it.
What I think is that there needs to be a corporate rate, but exclude money returned to investors… as long as investors are taxed at the nominal personal income tax rate on that money. THAT seems fair to me. Profits retained by the corporation still needs to be taxed, just so that they have an incentive to either return it to their investors or put it to work by purchasing capital equipment or additional labor.
Steve - USA (I support "None Of The Above")
January 24th, 2012
10:24 am
A Tax Cheat@10:12
It is always helpful to everyone to provide a link when you provide stats.
Are you sure you meant that 56% of white people are on food stamps or did you mean that of all the people who receive food stamps, 56% of those are white?
retired early
January 24th, 2012
10:25 am
Steve
I am not suggesting that everyone that gets a mortgage deduction is “rich”. I am pointing out that there is “no cap” on the amount you can deduct. Kobe Bryant’s ex wife just got 3 mansions via their divorce totaling $18.8 million. These are all “tax shelters”.
Paul
January 24th, 2012
10:25 am
TaxPayer
“So Gingrich complains about Mitt’s low tax rate yet proposes to cut it in his own tax proposal. Is that right, er, um, I mean, correct”
I think that’s what Newt calls a “Grandiose Idea, ’cause I’m a Grandiose Thinker!”
Martin
January 24th, 2012
10:25 am
And all he can say for himself is that he paid all that was legally required. He doesn’t think that law can be changed, but does think that laws providing health insurance for millions who couldn’t get it before, should be “repealed.”
Welcome to the Occupation
January 24th, 2012
10:25 am
irrational: “What happens to the economy if people like Romney and Buffett and other investors like that were to take their money out of the economy to avoid taxes?”
It’s already “out of the economy, don’t you see?
We’re already there.
Major corporations and manufacturers have moved massive amounts of capital investment outside of this country, to low-wage countries for ex., but also to other capital-friendly locales.
And as we discussed yesterday, there is nothing in the current arrangement or in Republican proposals to further slash taxes – nothing – to keep this process from deepening. Which means the addiction to tax cuts and deregulation will only further accelerate the final destruction of the middle class and workers in this country.
Brosephus
January 24th, 2012
10:29 am
All relative to scale………doesn’t change the need for “investment”.
True, but the owner’s investment could be “labor” as opposed to finances. Not necessarily the same for an outsider.
TaxPayer
January 24th, 2012
10:30 am
I love this latest right wing meme to collapse the distinction between compulsory taxation and charity.
If you want to re-kindle that flame just try suggesting a cut in the “charitable contribution” tax deduction and watch those Republican head essplode.
Jm
January 24th, 2012
10:30 am
Byteme
That’s not all crazy (although corporations should decide for themselves whether to invest, duh)
But the corporate tax code is a riddled mess. Better to scrap it and just raise cap gains taxes and dividends taxes
Money not taken out isn’t actual realized cash profit
So just taxing dividends and gains is perfectly rational
And eliminates a crapload of lobbying, waste, and stupidity
Tommy Maddox
January 24th, 2012
10:30 am
“…most of Romney’s income was generated by doing nothing and allowing money to make money”.
THE SHAME OF IT!!!! INVESTMENT INCOME!!
Just ridiculous.
Sorry Charlie
January 24th, 2012
10:30 am
Dog,
Not all companies use their investors money soley on labor.
harvey
January 24th, 2012
10:31 am
What bias!! He paid the income tax rate of 35% on the initial income he received. He has invested in American companies, and he is risking losing it all. He won’t get anything from the government if he loses the whole investment. So for that risk he is rewarded with a lower tax rate. What a bunch of dumbies people are who simply don’t know that. I invest, and over the years have lost as much as I have gained. does the market in 2009 come to mind? Get over this wealth envy thing. It is so unbecoming.
Steve - USA (I support "None Of The Above")
January 24th, 2012
10:32 am
Warren Buffet sings to the Chinese people.
http://www.youtube.com/watch?v=QBKwTSBBn7U
MiltonMan
January 24th, 2012
10:33 am
Bush tax cuts??? The same tax cuts that Obama extended??? According to Ms hyphenated wingbat in Florida, it is Obama’s economy now.
Mr Bookman – you contradict yourself here. First Mitt: “…doing nothing…” then you quote Buffett: “…earning…”
ByteMe
January 24th, 2012
10:33 am
And eliminates a crapload of lobbying, waste, and stupidity
You really think it’ll eliminate that much lobbying? If it’s not the tax code, it’s regulations or even foreign intervention. Lobbying is with us whether we like it or not. Best we can do is to shine a spotlight on it every time it happens by making every lobbyist contact with a politician public within 24 hours via the Internet. Heck, there could even be a new service for it, like Twitter. I’m sure the gang here could come up with a good web 2.0 name for it. All you need is a way from their phones for politicians to report every contact with a lobbyist and how much that lobbyist spent on them. 140 chars or less
Matti
January 24th, 2012
10:34 am
A Tax Cheat or a Wife Cheat,
True. I’m not naive enough to believe that we can create a class-less society. ALL societies have classes, though they may define them differently.
What (in my understanding) made this great experiment known as the United States of America GREAT, was the underlying principle (or at least the possibility) that any common man could improve his plight with hard work and perseverance. This has proven true for a great many people, even though a Civil War and Civil Rights Movement were necessary to advance that goal.
What’s so disturbing in 2012 is that the ability of Americans to be upwardly mobile is falling off as the middle class stagnates, shrinks, and sinks — and still there are azzwipes screaming “Wealth envy!” and “Pull your own bootstraps!” Any American who pulled his own bootstraps did so because there was opportunity for him to work hard and climb up. That’s rapidly changing.
Even so, we will always have poor people among us. What makes THIS country better than most (like India, where our tech support jobs went), is that OUR poor people are better off. Our poor people don’t die in a puddle of their own excrement on the streets of a major American city. (At least, not until August 2005….) How we treat the “least” among us says so much about who we are. IMO.
Welcome to the Occupation
January 24th, 2012
10:34 am
Byte :”That’s why it’s all an ink-blot test. We project on our candidates that which we want to see in them..”
It’s just another step down the road towards a purely cynical going-through-the-motion-ism as a substitute for anything resembling true participatory democracy, a euthanasia of the system if you will, carried out by technocrats. We’ve already seen this creep into the developed world from the Southern European periphery as Italy now effectively has a leader appointed by bankers in Brussels and Frankfurt.
I would suggest that we may not be as far away from having a presidency effectively decided at the Manhattan headquarters of Goldman Sachs as some might like to think. If you peel away all the pomp and pageantry of this political horse race, which the media plays up every 4 years, you can see that we’ve already gone a long way in that direction.
Brosephus
January 24th, 2012
10:34 am
But the corporate tax code is a riddled mess. Better to scrap it and just raise cap gains taxes and dividends taxes
The same could be said about the personal tax code. That said, I don’t see any chance of those who benefit the most making any changes that will benefit others without giving themselves even more benefit.
monty
January 24th, 2012
10:35 am
Just think of all the extra “Obama phones” we could give to the poor if he paid more taxes! It’s just not RIGHT!!!
Bruno
January 24th, 2012
10:36 am
Appreciate the answers to the questions. I was asking just as a point of debate, and that was achieved without all the name calling and stuff.
What are you talking about, you blankety blank so and so???
(Sorry, didn’t want you to feel cheated, Bro)
Union
January 24th, 2012
10:36 am
do you kids “stomp” your feet when you go on these “its not fair” rants.. lol
ByteMe
January 24th, 2012
10:36 am
Byte :”That’s why it’s all an ink-blot test. We project on our candidates that which we want to see in them..”
It’s just another step down the road towards a purely cynical going-through-the-motion-ism as a substitute for anything resembling true participatory democracy, a euthanasia of the system if you will, carried out by technocrats.
You know we do the same thing with movie stars, right? And yet we still buy tickets to see their movies.
YOUR party SUCKS! But MINE is GRRRRRREAT! (formerly That Black Guy)
January 24th, 2012
10:37 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”?
_______________________________________________________________________________
Obviously, YOU are the first to say that.
Simple answers to simple questions and all that…
mm
January 24th, 2012
10:37 am
“One has a billion dollar warchest to seek re-election.”
I see the righties don’t understand capital losses.
Bruno
January 24th, 2012
10:37 am
For my love, PB:
http://www.youtube.com/watch?v=5djkVhLjw18
getalife
January 24th, 2012
10:38 am
willard can’t even beat the newt.
Shawny
January 24th, 2012
10:38 am
“most of Romney’s income was generated by doing nothing and allowing money to make money.”
Yes, that is true, but consider that money invested that earns dividends has ALREADY been taxed. If I earn a dollar, it is taxed, then AFTER tax, I can invest the remains of that dollar that will earn dividend income which is also taxed (though at 15% and not the higher rate).
“the tax code is making that gap worse.” True. Instituting a flat tax with no deductions would fix that.
Tonight’s state of the union address will be about income inequality. It is the wrong message. For a better explaination, and a better op-ed, read the following from David Brooks. This guy gets it.
http://www.nytimes.com/2012/01/24/opinion/brooks-free-market-socialism-.html?_r=2&nl=todaysheadlines&emc=tha212
It isn’t about beating down the rich, it should be about lifting up the non-rich.
Brosephus
January 24th, 2012
10:38 am
Bruno
You didn’t quite do it right though. You know that, as a conservative, you were supposed to say you Black blankety blank so and so.
Paul
January 24th, 2012
10:40 am
Somewhere here I thought I read Romney contributed a mil and a half or so to charity.
“Jan. 24 (Bloomberg) — Republican presidential candidate Mitt Romney donated $7 million to charity in the past two years, more than the $6.2 million the candidate and his wife paid in federal taxes in that period, documents the campaign released show.
Romney and his wife, Ann, who jointly file taxes, gave $1.5 million cash in 2010 and $2.6 million cash in 2011 to the Church of Jesus Christ of Latter-Day Saints, the tax documents show.
In total, the Romneys donated about 16.4 percent of their adjusted gross income of $42.5 million in the two-year period, according to their 2010 tax returns and an estimate for 2011 taxes. The 2010 return shows $3 million in charitable contributions, and the 2011 estimate shows $4 million.”
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/01/24/bloomberg_articlesLYA8ZY6K50XT01-LYADC.DTL
I find that pretty amazing, especially with what we’ve read of his peers.
Doggone/GA
January 24th, 2012
10:40 am
“Not all companies use their investors money soley on labor”
They do, ultimately…because if they do not have enough workers to service their customer base they will lose business. Everything they use money for is to make it possible for their employees to do the work their customers have hired them to do.
Union
January 24th, 2012
10:40 am
Romney’s Tax Returns and Effective Tax Rates of the Rich
by Scott A. Hodge
Mitt Romney’s statement that he pays an effective tax rate of around 15 percent has generated a great deal of confusion over how much wealthy taxpayers actually pay in taxes and at what their “effective,” or average, tax rates are after credits and deductions. So it is helpful to review the latest data from the IRS for 2009. [Much of this is a reposting of a blog I wrote last September 21st.]
The table below shows that of the more than 140 million tax returns filed in 2009, roughly 237,000 reported adjusted gross incomes above $1 million. Those 237,000 returns had a combined income of $727 billion, about 10 percent of all the income earned that year.
After taking their credits and deductions, there were roughly 235,000 taxable returns that paid a total of $177.5 billion in income taxes that year. They had an average tax liability of $754,000. (There were 1,470 “millionaires” that had no U.S. income tax liability after credits and deductions.) Combined, these high-income taxpayers paid 20 percent of all the income taxes paid in 2009. That’s a greater share of the tax burden than what is paid by everyone earning under $75,000 combined.
The table also shows the average, or effective, tax rate that taxpayers in each income group pay. For the entire universe of American taxpayers, the average tax rate is 11 percent of our AGI. The highest average tax rate paid by anyone earning under $100,000 is 8 percent. That shows the power of the sundry tax credits available to the “middle-class.”
By contrast, millionaires pay an average rate of 25 percent. Although taxpayers earning between $2 million and $5 million pay an average tax rate of 26 percent, while those earning more than $10 million pay an average of 22 percent. We can speculate that one of the reasons for this is that much of their overall income comes from capital gains, which is taxed at 15 percent (only 20 percent of the total AGI for these $10 million-plus taxpayers is from salaries). However, even with this “preferential” tax rate on capital gains, the data clearly shows that their overall average tax rate is at least twice that of the nation as a whole.
Link
http://www.taxfoundation.org/blog/show/27899.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TaxPolicyBlog+%28Tax+Foundation+-+Tax+Foundation%27s+%22Tax+Policy+Blog%22%29
getalife
January 24th, 2012
10:40 am
A word of advice to Bruno.
Stop hitting on other women when she reads this blog.
Quotemeister
January 24th, 2012
10:41 am
“I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country.” Thomas Jefferson
“Corporations are people.” Mitt Romney
“Have you met my newest staffer, Marie?” Newt Gingrich
GaVet
January 24th, 2012
10:42 am
I’m an old man who never had any money to amount to anything but that isn’t Romney’s fault. Since I was a child, I’ve felt that, since money earned is taxed at the time it is earned, it should not be taxed again from being invested. Those reinvested earnings are the backbone of our Capitalistic system and we just need more of it.
Jm
January 24th, 2012
10:42 am
Byteme
Yes, there would still be lobbying related to regulations
But the corporate tax causes tons and tons of lobbying
Welcome to the Occupation
January 24th, 2012
10:42 am
harvey: What bias!! He paid the income tax rate of 35% on the initial income he received.
Are we talking about Romney here? He paid nothing of the sort. Did you read the post?
He has invested in American companies, and he is risking losing it all. He won’t get anything from the government if he loses the whole investment
If you think Mitt Romney is putting his entire wealth on the line where it is truly at risk of being lost in full, then I would suggest you are mistaken.
Besides, since when did we start accepting as legitimate what is effectively the blackmail of gamblers.
Chris Jones
January 24th, 2012
10:42 am
@robo I disagree with your premise that tax policy ought to encourage/discourage individual activities. I do agree that the income tax has become a tool for doing just that, and I want it to stop. I do agree that the government should act as referee. But the rules need to consist of laws for preserving our freedoms and outlawing abuse, not cash incentives or disincentives for this or that economic behavior. And certainly not a tool for implementing rewards or punishments based on resentment, envy, or a desire to redistribute the rewards of effort from one person to another. P.S. nice to hear from you:-)
Brosephus
January 24th, 2012
10:43 am
md
If you’re still around, Greg Sargent has an interesting thread that backs up a point you brought up a while back about the attacks on Romney in relation to his involvement with Bain…
http://www.washingtonpost.com/blogs/plum-line/post/what-the-battle-over-romneys-wealth-is-really-about-in-one-poll-finding/2012/01/24/gIQAiVMNNQ_blog.html
Today the Post has released some new polling that contains a remarkable finding: Romney’s unfavorability rating has spiked massively among these voters.
Among overall Americans, Romney’s favorability rating — a measure of broad acceptability — has dropped eight points since earlier this month, to 31 percent. His unfavorable rating has jumped 15 points, to 49 percent. That’s a net swing of 23 points. His negative rating now tops 50 among independents.
But the most interesting finding is among whites with incomes of under $50,000: His negative numbers among them have jumped 20 points, from 29 percent to 49 percent.
Granted it’s a WaPo/ABC poll, but it does back what you stated, if I remember it correctly, about doing themselves in by attacking Romney on Bain.
http://www.washingtonpost.com/wp-srv/politics/polls/postabcpoll_012212.html
Steve - USA (I support "None Of The Above")
January 24th, 2012
10:43 am
Romney – $4.1 million to his church. I guess we know who paid for the “I am Mormon” commercials.
Doggone/GA
January 24th, 2012
10:44 am
“it should not be taxed again from being invested. ”
You can now rest easy. It ISN’T. What is taxed is the income derived FROM that money. The original investment is NOT taxed again.
Joseph
January 24th, 2012
10:45 am
Welcome to the Occupation:
So its much better that the gubmint forces you to give them money? Wow you freaks on the left make so much sense…..
Joseph
January 24th, 2012
10:47 am
If you libbys don’t like how much Romney pays in taxes I have some advice for you. Call your President and your lib dem congressmen and have them rewrite the tax code… All I hear is whining because Romney only pays 14% in taxes but no whining that the dems won’t pass legislation to fix it….
Steve
January 24th, 2012
10:47 am
Jay has wealth envy…I am sure you make ten times more than some people in rural Georgia and south Atlanta…maybe you should donate what “you don’t need” to them. Lead by example Jay.
Hypocrite…
Union
January 24th, 2012
10:47 am
worst part about all of this.. while all of this concerted effort is put forth by jb and the other “media”.. obama continues to derail us even further with more failed policies.
Welcome to the Occupation
January 24th, 2012
10:48 am
Jm: “But the corporate tax causes tons and tons of lobbying”
Sheer nonsense, Jm. If that were true, then lobbying would have exploded into the stratosphere under the Republican Dwight Eisenhower, a time where top tax rates were in the 90+% range.
When Ronald Reagan came to Washington, lobbying was a fairly small-scale operation, with the total number of lobbyists in Washington numbering in the hundreds. But now, as tax rates have continued plummeting across the board in historical terms, we’ve seen an explosion of lobbying, with tens of thousands of lobbyists, armies of lobbyists proliferating in our political system.
So, want to try again?
Welcome to the Occupation
January 24th, 2012
10:50 am
Steve: “Jay has wealth envy…I am sure you make ten times more than some people in rural Georgia and south Atlanta…maybe you should donate what “you don’t need” to them. Lead by example Jay.”
And with thinking like this, the subjugation of the rube population is virtually complete.
They have agreed to drop the weapon of their mind and their voice and accepted the claim to royalty of their new masters, whom their happy to serve:
the royalty of wealth.
Yet they think their the clever ones. Amazing to watch.
St Simons - we're on Island time
January 24th, 2012
10:51 am
Steve – retired early – i get back to the screen when i can
a) silly, subjective question, rich – i get 1000/hr for subjective questions
b) true, only if you own 1 home, AND you’ve owned it more than 1 year.
(how many “rich” people fit that description? yeah)
all other items, “retired early” is pretty much on the money
with no addl information, that’s my first take
the accounting knowledge, i’ve said before, is astoundingly good
on this blog, except for one poster, who i believe is being
deliberately buffoonish. I’ll call BS if it warrants it.
Good show, both Steve & retired early.
getalife
January 24th, 2012
10:51 am
willard hid his taxes because it proves the gop is losing the tax argument.
I liked the way he hit newt on being a freddie lobbyist and pay back the money .
Our President is getting all the ammo he needs to win from the gop.
retired early
January 24th, 2012
10:52 am
Donations to religious organizations should not be deductible on personal income tax and would have been ruled unconstitutional were it not the fact that 70% of Americans are “religious”. It is, in effect, a government subsidy.
Mitt was able to support his Mormon faith to the tune of 4 million dollars in one year alone. How the hell can that not be wrong.
(ir)Rational
January 24th, 2012
10:52 am
Okay, so I got a few answers to my questions. Some ridiculous some not so ridiculous.
ByteMe – So what I got from your post is that 30% of the economy is driven by investments. I think that number is probably a tad small considering many of those consumers are only able to consume because they invest. And because the goods they’re consuming were largely only produced because someone invested in the company producing them. However, 30% works just fine for my argument. What shape do you think the country would be in today if suddenly 30% of the economy was removed? And, at 65, I’m fairly certain that Romney could afford to live off the money he already has without having to find a job in the future. Plus, I hear his next job has a salary of around $400,000. (Couldn’t resist, just to poke the bear/have fun)
TaxPayer – That’s the point I was trying to make. And I was basically saying he would pay taxes on it this year, but after that, if it wasn’t earning anything, he wouldn’t be taxed on it as there would be no income.
Welcome to the Occupation – Really? You don’t think invested money is a part of the economy? Cool story bro.
monty
January 24th, 2012
10:57 am
That’s the solution by those on the left, “just throw enough money into the system” and everything will improve by leaps and bounds.” How’s that been working? Believe it or not, money is not the solution to life’s(America’s) problems. Constantly being told it is, only distorts reality and creates class envy. “We just need more of the rich man’s dough.” It aint fair he’s rich and we’re poor! So we’ll just take it from him. Now with that attitude, try to sell staying in school and making something of yourself to a young gang member.
philosopher
January 24th, 2012
10:58 am
Just dropped in and saw this:
Chris Jones
January 24th, 2012
9:10 am
Since investors are rarely motivated by immediate survival needs, you need some other way of encouraging them to perform their valuable function. Lower taxes work nicely in that regard.
Computer screen needed cleaning after that one! Hilarious. Oh, please-let’s all make a concerted effort to make those poor little guys who work so very hard investing money so they can get richer, more willing to play with their money. If we don’t, who knows, there’s a real danger that they will quit their jobs and go do something non-productive…like maybe firefighting, or building houses, or…who knows?!
TaxPayer
January 24th, 2012
11:00 am
All I hear is whining because Romney only pays 14% in taxes but no whining that the dems won’t pass legislation to fix it….
So you listened to Newt too. It’s just terrible the way he went on about Mitt’s low tax rate. Mitt’s a job creator after all.
(ir)Rational
January 24th, 2012
11:01 am
retired early – Just for fun, can you point me to where exactly in the Constitution it says there shall be a strict separation of church and state? I’ll wait while you pull that one out of nowhere.
Matti
January 24th, 2012
11:02 am
retired early: Mitt was able to support his Mormon faith to the tune of 4 million dollars in one year alone.
The Mormons in Utah took millions of dollars to California for the sole purpose of overturning the law the people had already voted on, allowing same-sex couples the same marriage rights as (the monogamous) Mormons enjoy. While it was very thoughtful of them to support the slanderous advertising industry with their donations, it does not seem right that such blatant political manipulations should be tax deductions for them as well.
Thulsa Doom
January 24th, 2012
11:02 am
I’ve recommended several times on here that the cap. gains tax rate be raised to 18-19% because from the tax tables I’ve studied in the past it looks like this would raise revenue without affecting investor behavior and entreprenurial activity. Anything more than that I suspect would be detrimental and counter productive both in terms of economic growth and tax revenues collected by the federal govt.
http://www.house.gov/jec/fiscal/tx-grwth/capgain/capgain.htm
Here’s an interesting read from the joint economic committee study on the capital gains tax rates. Its from 1997 the Clinton years. Its about a 10 minute read but quite illuminating.
Tax Revenue. The historical evidence suggest that capital gains tax reductions tend to increase tax revenue. When capital gains tax rates were lowered in 1978 and again in 1981, revenue climbed steadily. Conversely, when the tax rate was increased in 1987, revenue began declining despite forecasters predictions it would increase. For instance, capital gains tax revenue in 1985 equaled $36.4 billion after adjusting for inflation, yet $36.2 billion was collected in 1994 under a higher tax rate. In other words, tax revenue in 1994 was slightly less than it was in 1985 even though the economy was larger, the tax rate was higher, and the stock market was stronger in 1994.
For instance, capital gains tax revenue equaled $36.2 billion (0.5 percent of GDP) in 1994 (the last year for which finalized IRS data are available). In contrast, $36.4 billion (0.6 percent of GDP) was collected in 1985, after adjusting for inflation. Thus, tax revenue in 1994 was slightly lower than in 1985 even though the tax rate was higher, the economy was larger, and the stock market was stronger in 1994. The historical data suggest that the government could collect more revenue if the capital gains tax rate were reduced
Effects on Tax Revenue
The result that tax revenue tends to increase following a reduction in the tax rate may seem counterintuitive; however, there are many offsetting factors which must be considered. In the static analysis, tax revenue inevitably falls because the same level of realizations is being taxed at a lower rate. In addition, tax receipts may fall if taxpayers reclassify regular income as capital gains in order to take advantage of the lower rate.
So who benefits from capital gains tax cuts?
Who Would Benefit?
Earlier legislation to reduce the capital gains tax rate was defeated in large part because opponents of a tax cut portrayed it as a windfall for the rich. It is obvious that affluent investors would benefit from a capital gains tax reduction, but benefits would also accrue to individuals across the income spectrum. The DRI/McGraw-Hill study notes: “Often overlooked benefits flow to all workers and middle income citizens, and the overall economy wins. The middle class will benefit from greater appreciation in their pensions…Small businessmen will gain from more generous tax treatment of the gains on their enterprise. And all employees will see wage gains tied to investment-driven higher productivity.”[12] DRI’s research director, David Wyss, notes that “The capital gains cut helps most people and hurts no one.”[
VI. Conclusion
Saving and investment are crucial to economic growth and rising living standards. However, high costs of capital, double and triple taxation of saving, and taxation of inflationary gains discourage these activities, thus lowering economic efficiency and long-term growth prospects. While broad tax reform is needed to address the deficiencies of the existing tax code, many economists believe that reducing the capital gains tax rate is the single most effective policy measure which can be enacted immediately to promote efficiency and economic growth.
hryder
January 24th, 2012
11:02 am
I have additional income, not remotely close to millions, generated as was the reported income of Mr. Romney. I earned the funds which were invested with its associated risk rather than spending it and paid taxes according to IRS directives. These monies were then available to others as loans to pursue legitimate objectives. Just because Mr.Romney invested a greater amount than I is not a logical acceptable reason to “confiscate”, a greater amount, note that he placed a much greater amount at risk. The same opportunity is and should be available to all and it is IF you are willing to place your money which has previously been taxed at risk. Vote all incumbent elected office holders OUT in the November, 2012, elections.
Jimmy62
January 24th, 2012
11:03 am
Just think, if the government wasn’t forcing you to pay social security for old people who already have more money than you anyway, then you could take that money and invest it and also earn a lower rate.
The system is rigged to keep you poor, not to keep them rich. Why? Because the Democrats can control you with class warfare if you are poor. If you actually can create wealth, then your mind will be free and you will realize the evil of their ways.
Talking Head
January 24th, 2012
11:03 am
Obama’s address tonight will be painful to watch/hear. He will no doubt talk about what direction he wants the country to go in and enforce his point will the “Buffett Rule” and other class warfare themes, while at no time actually promoting anything that is actually going to get our economy in the right direction.
Welcome to the Occupation
January 24th, 2012
11:04 am
monty: “That’s the solution by those on the left, “just throw enough money into the system” and everything will improve by leaps and bounds.”
Did you ever hear the name John Maynard Keynes, monty? His work disproves your statement.
Besides, all that money we’ve been throwing at things that you’re referring talking about has not gone to support a bunch of lazy layabouts as you suggest (unless we count bankers as layabouts), but to bail out major banks and mutant financial-holding company organizations which became bloated beyond recognition on toxic debt in the last decade following the repeal of Glass-Steagall.
St Simons - we're on Island time
January 24th, 2012
11:06 am
I agree with Jm (& most cons) on only two things – surfing – and
lower the Corp tax rate (only if you raise the other rates)
If you tax hoaded/hidden money harrrd, and lower the corp rate,
then you motivate money towards “activity.”
When it is more advantageous to activate money than to hoard it,
jobs (through company activity) will happen.
Steve - USA (I support "None Of The Above")
January 24th, 2012
11:07 am
Why do do some people here love calling Romney Willard when he uses Mitt? I noticed that some hosts on MSNBC do the same thing. None of the other Networks do.
I realize what his birth name is but he calls himself Mitt.
People just trying to be clever?
monty
January 24th, 2012
11:08 am
Retired Early- “Mitt was able to support his Mormon faith to the tune of 4 million dollars in one year alone. How the hell can that not be wrong.”
Wow! Every church I know of practices benevolence to the poor. Can’t believe someone whould actually believe that is wrong to give “alot.” But I’m guessing if he gave that to the government you wouldn’t have a problem with it.Right? So it’s really just about the “freedom’ to give where you desire.Guess you would have been on England’s side in the revolution.
Matti
January 24th, 2012
11:09 am
Talking Head,
Remember, Blitzer will give us the “shot” word in the lead-up. He’ll say, “Tonight the President will speak a lot about….” then he’ll look directly into the camera and say the shot word.
Sorry Charlie
January 24th, 2012
11:10 am
Dog,
In the interest of discussion, what if I decide that I want to purchase an existing item to resell, let’s say a classic car. I don’t have enough money to purchase it, but I cajole an investor to help. We sell that classic car and make a profit. Where is the Labor? Let’s say I had a buyer, before I even purchased said vehicle and I didn’t even move the car (the goods) from the original owner’s property? We just flipped an asset – we didn’t produce anything.
Jay
January 24th, 2012
11:10 am
Thulsa, a more recent — and nonpartisan — study by the Congressional Research Service came to the exact opposite conclusion about cutting the capital gains tax. Judging from historical data, it found no evidence that it increases investment or savings and in fact concluded that it might have a net negative effect, because lowering capital gains taxes cuts government revenue and increases govt borrowing.
http://www.policyarchive.org/handle/10207/bitstreams/19358.pdf
Welcome to the Occupation
January 24th, 2012
11:12 am
Talking Head: “Obama’s address tonight will be painful to watch/hear. He will no doubt talk about what direction he wants the country to go in and enforce his point will the “Buffett Rule” and other class warfare themes,”
As has been pointed out here endlessly, the only “class war” that there has been has been the one waged by the bankers and other big money interests against workers starting in the late 1970s. And that war is over – it was effectively won without a shot being fired. All that people like Obama are now doing is fighting over a few scraps in the mop-up operation. But the battle is over, as Warren Buffett has said.
Besides, I don’t understand your statement “while at no time actually promoting anything that is actually going to get our economy in the right direction”.
Have you not been following the economic figures of late? They’re moving “in the right direction”. Not fast enough. But they’re moving.
Brosephus
January 24th, 2012
11:13 am
Why do do some people here love calling Romney Willard when he uses Mitt?
I’m guessing it’s for the very same reason that some here enjoy calling Obama by his middle name Hussein, even though he doesn’t use it.
Steve - USA (I support "None Of The Above")
January 24th, 2012
11:16 am
Brosephus@11:13 “I’m guessing it’s for the very same reason that some here enjoy calling Obama by his middle name Hussein, even though he doesn’t use it.”
OK, Thanks. That’s what I suspected, their just being idiots.
Mama Says
January 24th, 2012
11:16 am
Why do u guys insist on taking other peoples money ? I just don’t get it
your nothing but middle classs thieves complaining that the rich crooks got it and u don’t
if you want this country to be fair say so if you advocate theft say that too.
carlosgvv
January 24th, 2012
11:18 am
Matti
The Mormons are the same as all other religious fundamentalists:
1. They are the only ones going to heaven, they think
2. If you are not one of them, you’re going to hell
3. They love money
4 More than anything else, they excel at hypocricy.
Steve - USA (I support "None Of The Above")
January 24th, 2012
11:18 am
The Sun is out and it is calling me. See ya!
St Simons - we're on Island time
January 24th, 2012
11:19 am
retired early – churches
yes, but I for one want to keep churches separate from state.
This comes from 1780’s, when it was common practice among the
villagers to donate wood, labor, wagons, etc toward the effort of
building a community church for the village. The leaders of the day
saw that as a public service for the good, and wanted to rightly
recognize those citizens for their contribution to the collective
good of the community. No one in that day envisioned gold-plated
jewelry, limousines, PACs, and 10 bil religious cable networks
that tried to influence elections.
Every year the cons allow that to stand, they are saying, “oh well
so much for my “righteous” stand, showw me da money, and we’ll
keep em separate” What principled cons we have.
Mama Says
January 24th, 2012
11:19 am
Carlos how do u include “they love money” in any of your arguments when our side basis it’s entire argument on the fact you want to take money from others ?