2012 Tuesday: The Romney tax return distraction
Mitt Romney’s tax returns are slowly leaking out, with full details to come later today. (UPDATE: The 2010 returns and 2011 estimates are available on Romney’s campaign website.) And as fully expected, progressives are in high sanctimony about his effective tax rate of 14 percent — as if they would have thought he’d fulfilled his patriotic duty by paying 25 percent, or 35 percent, or 50 percent, and still had well over $10 million they hadn’t gotten their claws on.
Lefties who always harken back to the Clinton-Gingrich-Lott years as a golden era of satisfactory, budget-balancing tax rates seem oblivious to the fact that the difference between what Romney paid under the current rates and what he would have paid under the rates that prevailed then is roughly $900,000. No, you’re not missing a decimal point: At a top income tax rate of 39.6 percent and a capital gains rate of 20 percent, Romney would have paid something like $900,000 more on his $21.7 million in 2010 income (capital gains of $20.8 million and other income of about $0.9 million).
If you actually believe an extra $900,000 in taxes paid would have spared Romney this political headache, I’m surprised you can actually read this blog post.
But that’s not all. Let’s say Romney’s capital gains not only had been taxed at the same top rate as regular income in 2010 (35 percent) but that he hadn’t been able to reduce his taxable income through charitable donations. In that case, Romney would have had something like $14.1 million left over after federal taxes (and a lot of charities would have failed to help a lot of people, but that’s another argument for another day). In reality, Romney donated $2.98 million to charity and paid $3 million in federal taxes, leaving him with $15.7 million.
Again, it’s foolish to believe the wealth-envy industry would have been satisfied with such a difference.
We could run any number of scenarios producing any number of hypothetical results (none of which would be truly accurate, because they all wrongly assume a differently structured tax code wouldn’t have affected Romney’s behavior). At the end of the day, it’s not really about that.
It’s not really about balancing the budget — not when the president and congressional Democrats make no secret of their desire to increase spending at least as fast as revenues might grow. Witness President Obama’s 2012 budget proposal, which assumed taxes would go up as he desired starting in 2013 — and yet, for the rest of his presidency, would not have cut the budget deficit even to 3 percent of gross domestic product. His budget deficits after raising taxes would have remained higher as a share of GDP than George W. Bush’s average budget deficit from the time he cut taxes until the housing bubble burst.
It is, however, about whose vision is best for the economy: Obama’s vision of a government that consumes a larger share of Americans’ production than this country has ever seen on a sustained basis, or the alternative of a government that returns to a rational size based on our historical experience and economic reality.
Because conservatives understand and acknowledge that tax rates affect individuals’ and businesses’ incentives and thus their behavior — the left understands this, but only acknowledges it when arguing for policies such as “green” taxes — we often get bogged down talking about the tax code. (Yes, my hand is raised here, too.)
But as Milton Friedman taught us, what really matters for the economy is the size of government spending. What the citizens don’t pay in taxes now, they pay in future taxes (debt) or price inflation. (Credit where credit’s due: Ron Paul is the only presidential candidate who consistently makes this case.)
The left is not making an issue of Mitt Romney’s tax rates out of an interest in closing the budget deficit. As Reagan learned to his chagrin, agreeing to raise taxes in exchange for promises of spending cuts only leads to higher taxes and higher spending. It would happen again if Obama-Pelosi-Reid got their way and took a larger chunk from “the rich,” as their unserious proposals for “cutting” spending demonstrate.
It is purely the politics of envy and redistribution: See those rich people like Mitt Romney? If you elect us, we’ll take more from him and give it to you.
That’s what the Romney tax returns story is really about. Shame on those Republicans who go along with it for their own temporary political gain, and woe to Romney if he can’t use this occasion to make the case for keeping money in the private sector rather than siphoning it off for ever-larger government.
– By Kyle Wingfield
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356 comments Add your comment
Somewhere over there
January 24th, 2012
4:52 pm
“My problem is that any moron should know that this is a disingenuous statement….”
So you’re a moron. Got it.
Kyle Wingfield
January 24th, 2012
4:52 pm
JDW @ 4:47: And if the investments don’t gain, they don’t get any commission…
Rafe Hollister
January 24th, 2012
4:55 pm
NO …they are paying the lion’s share of the taxes at this time. The maintenance costs are considerably higher, therefore the deficit exits.
_______________
No, the deficit exists because the Dems want the government to be all things to all people and refuse to even entertain rolling back the cost of government. They just prefer to raise Mitt’s taxes and keep SPENDING.
Bob
January 24th, 2012
4:58 pm
JDW…did slick Willie earn those speaking fees, or were they political payback?
Rafe Hollister
January 24th, 2012
4:58 pm
RNBD
$1.5M of that went to the Church of Jesus Christ of LDS….They primarily help fellow Mormons….
Mormons have to eat as well. Last I checked they were US citizens, tax payers, and some of the most loyal patriotic people in this country. What is your point?
MarkV
January 24th, 2012
4:59 pm
JDW and Kyle,
In my opinion to define fair share by citing some numbers is completely unproductive. JDW, why would you think those numbers you cite mean that those taxes would be fair? Why would “fair share” be “approximately the amount he would have paid under Clinton plus a closed loophole for carried interest…?” That is no better than saying “The fed. marginal income tax rates are already progressive AND fair.” The validity of “fair” is left to be in the eyes of the beholder.
The way I define fair is a tax structure, which makes the after-tax income to change by about the same percentage for different income groups over a reasonable historical period, say a decade. This is what has been out of whack in the recent history.
JohnnyReb
January 24th, 2012
5:00 pm
Double Taxation – the wife and I own an S-Corp. It in turn owns a retail shop. If the retail shop makes $50K profit, we pay taxes on $50K because it all rolls to our personal return. If we take $25K of that and reinvest it into the retail shop in inventory, we get to pay property taxes on any of that inventory remaining as of the first day of the new year. In fact, all inventory regardless of how long it has been in inventory is subject to property taxes each year. That means an item paid for with after tax dollars that stays in inventory over a period of years is taxed over and over. Some system. And, the Left thinks that’s fair because those chillin must have a government school paid for with the property tax dollars. Thanks, I feel so much better (no I don’t).
Somewhere over there
January 24th, 2012
5:00 pm
“The maintenance costs are considerably higher, therefore the deficit exits.”
Um no, the deficit exists because of spending, sport.
Keep trying. Maybe something you cry about will stick.
JDW
January 24th, 2012
5:00 pm
@Kyle…”then by what objective measure is he underpaid/overworked?”
I did not say they were underpaid nor overworked, merely that without their work product Romney nor anyone else could have profited.
“But government has never proved capable of “fixing” this situation in a way that doesn’t have unintended consequences at least as bad as the underlying problems.”
I never said government should fix that particular problem…as I posted the other day….
““The legitimate object of government, is to do for the people whatever they need to have done, but which they can not do, at all, or can not do, so well, for themselves – in their separate and individual capacities …. ”
That includes things like regulation, education systems, defense, healthcare, etc…all the things that make up the infrastructure to support the society that Romney and others have profited from. Therefore when the bill comes due they should pay it…not defray thier expenses by running a deficit.
Somewhere over there
January 24th, 2012
5:01 pm
“did slick Willie earn those speaking fees, or were they political payback?”
Not sure, but one thing I do know is that the left is completely silent about it.
gm
January 24th, 2012
5:02 pm
I wonder how much money the people he layed off made? Romney is a example why this country collaps, but the idiots on the right think its a badge of honor to collect 200 million at the expense of the middle class worker.
Darwin
January 24th, 2012
5:02 pm
Mitts is only part of the problem. When 47% of income earners pay no tax, then payment of government services falls on those who do pay. And the 47% are not free loaders. They are playing the system designed to give breaks for large families, mortgage debt, and other special interests. Corporations who pay no tax are included in this bunch. No, the whole tax system is a disgrace. Mitts only helps to showcase what’s wrong with our current tax code. Eliminate the special interests (including Wall Street vulture capitalists) and create a level field. Only then can we begin to look at cutting services if we are serious about balancing the budget.
JDW
January 24th, 2012
5:03 pm
@MarkV…”why would you think those numbers you cite mean that those taxes would be fair? ”
I use those numbers as a baseline for fair because when taxes were at those levels we did not run a deficit. I have not put a pencil to it but I expect those numbers would have come close to your definition as well.
1961_Xer
January 24th, 2012
5:04 pm
All the Romney tax return points out is that the tax code needs a major overhaul. I earn a modest paycheck and pay a higher percentage than someone who rakes in $20million a year in capgains/div/etc. Romney doesn’t pay SS or Medicare on that $20million, either. While it is perfectly legal for Romney to do so, it says a pantload (bad) about the problems with our taxcode.
Somewhere over there
January 24th, 2012
5:04 pm
“I wonder how much money the people he layed off made? Romney is a example why this country collaps, but the idiots on the right think its a badge of honor to collect 200 million at the expense of the middle class worker.”
Well, here’s another shining example of liberal ignorance in all it’s pathetic glory.
JDW
January 24th, 2012
5:04 pm
@Kyle…”And if the investments don’t gain, they don’t get any commission…”
Nor pay any taxes….
Somewhere over there
January 24th, 2012
5:04 pm
” I earn a modest paycheck and pay a higher percentage than someone who rakes in $20million a year in capgains/div/etc. ”
Stop lying.
Linda
January 24th, 2012
5:05 pm
JDW@4:50, If you think I’m a moron, why would you want to waste your time engaging me?
one + one = two
once + once = twice
Investors can’t invest money they do not have. Most investors invest money they have earned & paid taxes on. Investors pay taxes twice, once when they earn money/wages & again on the capital gains, IF they make a gain.
JohnnyReb
January 24th, 2012
5:05 pm
gm – you should take a different viewpoint. Sure several of the companies Bain invested in were downsized or went out of business. But, many were successful and stayed in business with the Bain infusion. It is similar to Obama claiming to have created X number of jobs. You don’t really know how many, you just know it helped.
Bob
January 24th, 2012
5:06 pm
Don’t you really think that the major obstacles/challenges/problems are lack of term limits, so called “think tanks”, and electing lawyers to represent our interests? Maybe our founding fathers were correct when they decreed serving the public rather than life-time job.
Somewhere over there
January 24th, 2012
5:08 pm
Linda
JDW is probably unemployed and living in his parents basement. Take his rants with a grain of salt.
JohnnyReb
January 24th, 2012
5:09 pm
I have seen a T-Shirt with the Paul Revere like rider proclaiming – “the lawyers are coming, the lawyers are coming!”
Somewhere over there
January 24th, 2012
5:11 pm
“I have seen a T-Shirt with the Paul Revere like rider proclaiming – “the lawyers are coming, the lawyers are coming!””
Well, he did live in the New England area famous for lawyers.
JohnnyReb
January 24th, 2012
5:15 pm
Well, another grand day at the debate thread! The Left puts up no sustainable point to justify their position and can only parrot the Obama talking points. The loyal right wipes them out with only occassional backup from the moderator who slays them with logic and history.
Be reminded of Reagan who stated the problem with the Left is, they know so much that is not true.
Good evening and best wishes.
Linda
January 24th, 2012
5:16 pm
Humanitarian initiatives of the Mormon church include:
Emergency Response
Wheelchair Distribution
Clean Water Service
Neonatal Resuscitation program
Vision Treatment Training
The LDS church also has over 300 job development & placement centers around the world.
http://en.wikipedia.org/wiki/LDS_Humanitarian_Services
Bob
January 24th, 2012
5:17 pm
Good one JohnnyReb (and thanks for serving). How many of ya’ll would turn over your 401Ks, retirement accounts, and/or investments to your attorney to manage? Isn’t that what you’re doing when you elect one? And, how many think we have enough laws…maybe we need to enforce the ones on the books now. Just asking.
redneckbluedog
January 24th, 2012
5:20 pm
@Rafe Hollister
January 24th, 2012
4:58 pm
———————————-
My point is that they creep me out and I don’t want one running my country…!!!!!
Somewhere over there
January 24th, 2012
5:25 pm
“How many of ya’ll would turn over your 401Ks, retirement accounts, and/or investments to your attorney to manage?”
None of them.
MarkV
January 24th, 2012
5:31 pm
JDW @5:03 pm
I am glad that some numbers are already available that could be the starting point, because using my definition obviously would require adjustments to be made depending on the results. My main problem with your reasoning, rather than your numbers, is that deficit and fairness are completely independent concepts.
Sarah Coulter
January 24th, 2012
5:31 pm
I love watching the 99%ers gag, and defend the 1% as if they give a hoot about what you say.
Here is a question for the contards that adamantly defend the millionaire and billionaires: do you think that if the millionaires and billionaires were really paying so much that they wouldn’t have figured out a way to rig the system to their benefit or that they would be complaining about how much money the government takes from them?
I never see any of the billionaires or millionaires complaining about how much they pay. It always the non-millionaires and non-billionaires that are doing the “Leave Britney alone” or in this case “leave the rich alone”.
Bob
January 24th, 2012
5:32 pm
And one last point before I hit the bar, maybe we shouldn’t put much stock into “how much money he/she made”, “what tax rate paid”, “how many wives”, or “how smooth he/she talks”, maybe we should vote for the person most qualified to be the general manager of this country and be a good steward of the financial resources. Just my opinion…peace.
Staff Media Urologist
January 24th, 2012
5:33 pm
The tax code is whacked. The poor pay less taxes because they CAN’T PAY MORE, the rich pay less taxes because they LEVERAGE THEIR MONEY TO PLAY THE SYSTEM, and the middle class bears an incommensurate load for working their fool butts off every day with HR Block as their tax advisor. This isn’t about class envy. It’s about a system that fails us and fails the capitalist model that we pride ourselves on.
I’m all for the flat tax. Until the politicians eff that up too.
Kathy
January 24th, 2012
5:38 pm
I am well aware that Mitt doesn’t own a company and I never said employing people was mandatory. If private industry and those with a substantial amount of money would hire a few people, then it would definitely help the unemployment rate. Why can’t Mitt create a company and put people to work?
Somewhere Over There – Thanks for making my point. Additional tax cuts will not result in higher employment levels. Those that are able to hire don’t hire anyway.
Somewhere over there
January 24th, 2012
5:42 pm
“Here is a question for the contards that adamantly defend the millionaire and billionaires: do you think that if the millionaires and billionaires were really paying so much that they wouldn’t have figured out a way to rig the system to their benefit or that they would be complaining about how much money the government takes from them?”
What was that you were saying earlier about being “mature?” Geez, you are a walking contradiction, little girl.
Somewhere over there
January 24th, 2012
5:44 pm
“Why can’t Mitt create a company and put people to work?”
Ok, you’re not a smart person. Got it.
“Those that are able to hire don’t hire anyway.”
I’m gonna go out on a limb and take a wild guess that you have never owned a business.
Somewhere over there
January 24th, 2012
5:45 pm
“I love watching the 99%ers gag, and defend the 1% as if they give a hoot about what you say.”
I love watching you implode all over Kyle’s blog.
Odis
January 24th, 2012
5:45 pm
How does someone who makes 21 million dollars a year without having a job, relate to middle-class Americans? Mittens is just out of touch with 99% of Americans.
Linda
January 24th, 2012
5:47 pm
gm@5:02, Obama closed 1454 GM dealerships, resulting in the loss of 72,620 jobs in the short-term AND 789 Chrysler dealerships, resulting in the loss of 43,081 jobs in the short-term, & according to the TARP Inspector General, he based the closings on race, gender & location.
http://scottystarnes.wordpress.com/2010/07/23/tarp-inspector-general-obama-administration-closed-down-auto-dealerships-due-to-race-gender-and-location/
Romney had to close a few failing businesses but was instrumental in saving about 75%. How many net jobs did Romney save or create?
Bob
January 24th, 2012
5:48 pm
@Somewhere…excellent point my friend. Obama, Harry Reid, and Nancy Pelosi, et al have made it expensive to hire folks. Much cheaper to outsource. And what do all three have in common? Lawyers!
Somewhere over there
January 24th, 2012
5:48 pm
“How does someone who makes 21 million dollars a year without having a job, relate to middle-class Americans?”
Same way Clinton, who made 76 million dollars last year did. Same way Obama, who made over 1 million dollars last year did.
Somewhere over there
January 24th, 2012
5:49 pm
“Mittens is just out of touch with 99% of Americans.”
No, he’s just out of touch with the loser Democrat retards who call themselves the 99%/
BTW, where are all the whiney little babies now who called themselves the 99%?
Kathy
January 24th, 2012
5:50 pm
Somewhere over there -You don’t even know me and yet you have the gall to insult me. This is exactly the problem with the extreme right. YOU are destroying the country. Not interested in serious discussion, just insults.
Somewhere over there
January 24th, 2012
5:50 pm
Bob
These so-called “intellectuals” don’t even know how to balance their own checkbooks. They also don’t even realize that their cult leader Obama is a millionaire.
Somewhere over there
January 24th, 2012
5:51 pm
“You don’t even know me and yet you have the gall to insult me.”
No, I had the gall to correct your lies.
“This is exactly the problem with the extreme right. YOU are destroying the country. Not interested in serious discussion, just insults.”
HAHAHAHAHA!!!!!!!!!!
Linda
January 24th, 2012
6:05 pm
Sarah@5:31, Taxes are not levied on wealth. They are levied on income.
It appears that you have “fallen” for the liberal rhetoric. Obama & the Democrats harp about the “millionaires & billionaires” in a dishonest way. Their intent is to raise taxes beginning with singles making $200,000 & couples making about $250,000. Those are “thousandaires.”
My question to you is this: regardless of income or tax bracket, what do you think is the maximum number of months that any human being should work for the govt., that is, the fed. govt. + his or her state govt., that is, paying taxes, before he or she gets to keep one dime so that they can pay for stuff such as food, clothing & shelter?
Hint: a combined federal marginal tax rate of 40% plus a state tax rate of 10% means that that tax payer works for the government half of the year.
I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...
January 24th, 2012
6:08 pm
Most dummycrats can’t count that high so they just blubber along with their media pimps.
It’s all a big foggy, whiny world out there.
Linda
January 24th, 2012
6:13 pm
Kathy@5:38, Your idea is so great that Mitt wants to take you up on it, but rather than a company, he wants to run the whole country AND he wants to runs the whole country exactly like he ran his company. The problem with politicians is that they are politicians. They think they need to spend all the revenues we send to Washington PLUS another $1.6 T per year. It’s never enough.
Romney is not a career politician. He was a governor. He is used to profits, not deficits & debt. He will be a better manager.
Michael H. Smith
January 24th, 2012
6:14 pm
Alms!
Alms for the State!
Pay thy fair share and comrade dear supreme re-distributor obumessiah shalt bless thee.
Get ready conservative compeers, tonight obumessiah the anointed one shall eulogize that old evil greedy capitalism in the name of “Class Warfare” and the demagoguery of “Equal Fairness”. Let’s see how closely the magnificent one can come to reciting the mantra of Karl Marx without actually using his words, “From each according to their ability, to each according to their need.”
I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...
January 24th, 2012
6:21 pm
Here’s our annual 2012 State of the Union pool, name, in order, the following things iman obozo is most likely to do tonight-
1) Lie like a rug.
2) Whine about the rich.
3) Blame Bushie.
4) Call you and your family energy hogs.
5) Gush over the murderous Chinese communist hellhole.
6) Pick out some defenseless, decent and moral person from the audience, who is unable to respond, and run his mealy little at them like the two bit goon that he is.
7) Blabber about lowering taxes, shrinking government and cutting regulations that, if Republicans are still awake at this point, should induce uproarious howls of laughter from them.
I got 1-2-3-4-5-6-7, beat that, punks.
Somebody else is going to have to keep score cause I ain’t watchin this klownshow.
Michael H. Smith
January 24th, 2012
6:23 pm
Linda@6:13 pm If memory serves me correctly Mitt wants to cut the size of government, not just slow down the rate of growth in government, but really cut its’ actual size by 10%.
Bring on the ax. Oh, and if you by accident slip and cut off another 30% I’ll smile and say oopsy for you, Mitt.