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
Don't Tread
January 25th, 2012
8:48 am
I suppose “shared responsibility” is the latest euphemism for wealth redistribution. Nice attempt at a guilt trip too…but it won’t work, Comrade Obama.
the edge
January 25th, 2012
9:32 am
Dems sure love their tax raises. And their redistribution of other people’s money too.
UGA 1999
January 25th, 2012
9:42 am
Can anyone tell me what “fair share” equates to?
Somewhere over there
January 25th, 2012
9:47 am
“Can anyone tell me what “fair share” equates to?”
It means only Republicans who are rich should pay higher taxes.
Somewhere over there
January 25th, 2012
9:48 am
“Yes, all of the tax cuts should expire.”
You should talk to your cult leader because he extended them.
Somewhere over there
January 25th, 2012
9:49 am
“Republican economic policy does not work!!!”
Unemployment under Bush = 4.6%
Unemployment under Obozo = 9%
Yep, keep electing idiots like Obozo.
UGA 1999
January 25th, 2012
10:12 am
I wish Obama had been under oath last night. Atleast then we could impeach him for his lies!
Ernest T. Bass
January 25th, 2012
10:17 am
“Can anyone tell me what “fair share” equates to?”
It means that rich people should pay at the same rate as the poor.
Not half that rate.
The Lesson of the widow’s mite is presented in the Synoptic Gospels (Mark 12:41-44, Luke 21:1-4), in which Jesus is teaching at the Temple in Jerusalem. The Gospel of Mark specifies that two mites (Greek lepta) are together worth a quadrans, the smallest Roman coin. A lepton was the smallest and least valuable coin in circulation in Palestine, worth about six minutes of an average daily wage.[1]
In the story, a widow donates two small coins, while wealthy people donate much more.[2] Jesus explains to his disciples that the small sacrifices of the poor mean more to God than the extravagant donations of the rich.[2]
Somewhere over there
January 25th, 2012
10:19 am
“It means that rich people should pay at the same rate as the poor.”
That makes absolutely no sense. Poor people don’t pay a lot in taxes. Geez, you left wingers are MORONS.
Somewhere over there
January 25th, 2012
10:19 am
“I wish Obama had been under oath last night.”
He never would have taken the stage.
Ernest T. Bass
January 25th, 2012
10:21 am
Unemployment under Bush = 4.6%
The seasonally adjusted unemployment rate rose from 4.3% in January 2001, peaking at 6.3% in June 2003 and reaching a trough of 4.4% in March 2007. After an economic slowdown, the rate rose again to 6.1% in August 2008 and up to 7.2% in December 2008.[55] From December 2007 when the recession started to December 2008, an additional 3.6 million people became unemployed.[56] And, as of January 1, 2009, his last month in office, the nation lost 655,000 jobs, raising the unemployment rate to 7.8%, the highest level in more than 15 years.[57]
The economy was in free fall when Obama took over from the idiot. It takes more than a couple of months to fix that kind of damage.
UGA 1999
January 25th, 2012
10:22 am
Ernest T. bASS — They do pay the same rates….they pay more. They say Romney paid over $6million in taxes in two years. He also gave away another $6million. I would be willing to bet you will not earn $6million in your lifetime. How much is enough? When the lower half pays ZERO in federal income tax.
Also most of the wealthy in this country are the job creators or “C” level executives for major companies. So you guys want to raise their tax rates eliminate subsidies…..and you think the price of consumable goods will not change? You think that will cause them to start creating jobs? NOPE!
UGA 1999
January 25th, 2012
10:24 am
How can anyone have listened to that terrible speech last night and not realize that he is the most socialist president in history????
Ernest T. Bass
January 25th, 2012
10:25 am
That makes absolutely no sense. Poor people don’t pay a lot in taxes. Geez, you left wingers are MORONS.
They pay more of what little money they do have.
UGA 1999
January 25th, 2012
10:28 am
Ernest T. Bass…..They pay ZERO!!!!
Ernest T. Bass
January 25th, 2012
10:28 am
You think that will cause them to start creating jobs? NOPE!
Their taxes are low now. Where are all the jobs they are creating ?
The rich don’t create jobs when you give them more money.
They just but another fur coat or yacht.
Witnessing the donations made by the rich men, Jesus highlights how a poor widow donates only two mites, the least valuable coins available at the time. But, Jesus observes, this sum was everything she had to her name, while the other people give only a small portion of their own wealth.
UGA 1999
January 25th, 2012
10:28 am
Ernest T. Bass…..They also receive the most benefits!
Somewhere over there
January 25th, 2012
10:30 am
“They pay more of what little money they do have.”
How do you know that?
Somewhere over there
January 25th, 2012
10:32 am
“Where are all the jobs they are creating ?”
Ask you cult leader Obama that question.
“The rich don’t create jobs when you give them more money.”
You really don’t understand economics do you?
“They just but another fur coat or yacht.”
Ok, you’ve lost any and all credibility with that idiotic comment.
“But, Jesus observes, this sum was everything she had to her name, while the other people give only a small portion of their own wealth.”
She wasn’t giving her money to the government.
UGA 1999
January 25th, 2012
10:34 am
Ernest…..right now the tax rate has nothing to do with job creation. It is the instability in the market that OBAMA has caused! Until that goes away the jobs will not return. In fact, Obama’s administration lies about the unemployment numbers. If they would calculate the number of Americans that have given up looking for work the unemployment number would be around 10%!
The rich DO create jobs. I have never seen a homeless man that owns a business. Keep trying.
“The just but (buy) another fur coat or yacht”…..Envy Envy Envy.
Somewhere over there
January 25th, 2012
10:34 am
41 Jesus sat down opposite the place where the offerings were put and watched the crowd putting their money into the temple treasury. Many rich people threw in large amounts. 42 But a poor widow came and put in two very small copper coins, worth only a few cents.
43 Calling his disciples to him, Jesus said, “Truly I tell you, this poor widow has put more into the treasury than all the others. 44 They all gave out of their wealth; but she, out of her poverty, put in everything—all she had to live on.”
Again, she wasn’t giving her money to the Democrat Party.
Ernest T. Bass
January 25th, 2012
10:34 am
Ernest T. Bass…..They pay ZERO!!!!
Umm no they don’t. Poor people pay taxes everywhere they turn.
Investor and multi-billionaire Warren Buffett has criticized the U.S. tax code as highly regressive, citing himself as anecdotal evidence: Buffett stated that with an income of over $46 million, he pays a tax rate of 17.7 percent, whereas his receptionist pays a tax rate of 30 percent
Mark 12:38-44
In His teaching He was saying: “Beware of the scribes who like to walk around in long robes, and like respectful greetings in the market places, and chief seats in the synagogues and places of honor at banquets, who devour widows’ houses, and for appearance’s sake offer long prayers; these will receive greater condemnation.”
And He sat down opposite the treasury, and began observing how the people were putting money into the treasury; and many rich people were putting in large sums. A poor widow came and put in two small copper coins, which amount to a cent. Calling His disciples to Him, He said to them, “Truly I say to you, this poor widow put in more than all the contributors to the treasury; for they all put in out of their surplus, but she, out of her poverty, put in all she owned, all she had to live on.”
Mark 13:1-2
Somewhere over there
January 25th, 2012
10:35 am
Ernest T. Bass
If it weren’t for rich people, you would not have a computer to type on.
UGA 1999
January 25th, 2012
10:37 am
Ernest T…..YES THE DO!
Somewhere over there
January 25th, 2012
10:37 am
“Poor people pay taxes everywhere they turn.”
EVERYONE pays taxes, bozo!!!!!
“Investor and multi-billionaire Warren Buffett”
Buffett just made millions off of Obama’s pipeline shutdown.
As for your pick and choose Bible verse, you seem to have it confused. The woman was NOT giving her money to the government.
Geez dude, you are a confused person.
UGA 1999
January 25th, 2012
10:37 am
Ernest T….Dont manipulate the conversation. I said Federal Income Tax!!!! Manipulation is the same as lying. Yep keep quoting the bible!
Somewhere over there
January 25th, 2012
10:38 am
“whereas his receptionist pays a tax rate of 30 percent”
His receptionist makes $60,000 a year and also has stock options and massive bonuses at the end of the year.
Try again.
Somewhere over there
January 25th, 2012
10:38 am
UGA 1999
He thinks the widow was giving her money to the government.
UGA 1999
January 25th, 2012
10:38 am
Ernest T…..How are we ever going to be “energy independent” when Obama keeps striking down the oil pipeline. OH THAT IS RIGHT, THEY HAVE PROVEN THAT WARREN BUFFETT WOULD LOSE MONEY ON THAT DEAL!!!!! THUGS!
UGA 1999
January 25th, 2012
10:43 am
How about the line Obama used regarding illegal immigration and education. He was more or less telling Mexicans to come here illegally! Isn’t that the same as telling someone to break the law!?!?!?!!?
curious
January 25th, 2012
10:44 am
Where’s Boortz and the Fair Tax when we need him? Even if “poor” people pay the flat rate, the “prebate” will probably give it all back. Imagine the size of the agency that’s going to administer the fair tax program.
Anybody that doesn’t believe Newt’s contract with Freddie Mac wasn’t for “lobbying” is on the same level as the “separate but equal” crowd.
Newt’s obession with Mitt’s tax return tells me Newt has a case of wealth-envy.
UGA 1999
January 25th, 2012
10:48 am
curious….good job diverting the conversation away from the Liar Obama.
UGA 1999
January 25th, 2012
11:02 am
Wow did everyone leave? Nice!
Somewhere over there
January 25th, 2012
11:03 am
“Wow did everyone leave?”
No, I’m still around. I guess Ernest had a cop car to crap on.
UGA 1999
January 25th, 2012
11:05 am
Somewhere…..Ha, nice. I don’t understand how we can lay out simple truths to those on the left and they refuse to see it. It amazes me.
getalife
January 25th, 2012
11:19 am
Seal Team Six does it again and rescues hostages last night.
Our President told Panetta great job last night and that was what he was talking about.
Our President is on a roll and can’t be stopped.
He is one of the best ever and you cons know it.
UGA 1999
January 25th, 2012
11:22 am
Getalife…..yep, great job Seal Team 6, amazing work!
Our president is on a roll and can’t be stopped! hahahah now THAT is funny! You are right he is on a roll….right into a ditch!
Linda
January 25th, 2012
11:27 am
Mr. Bass, The fed. marginal income tax rates are progressive & range from 10% to 35%. Marrieds filing jointly pay 35% for income over $379,150.
Do you understand the difference between marginal tax rates & capital gains taxes?
You said, “It takes more than a couple of months to fix that kind of damage.” Sir, it’s been THREE YEARS! Obama said that if he couldn’t fix it, he would be a one-term president. Can you tell me ONE MONTH that the unemployment rate has been lower during THREE YEARS of the Obama Adm. than it was during EIGHT YEARS of the Bush Adm.?
You said taxes are low now. How high should they be & on what income brackets?
If small businesses don’t use money to create jobs, what do they use?
UGA 1999
January 25th, 2012
11:39 am
Linda….nice post.
Somewhere over there
January 25th, 2012
11:43 am
“Our President is on a roll and can’t be stopped.”
Right, and LSU won the national title.
Linda
January 25th, 2012
11:59 am
Obama is totally dishonest comparing Buffet’s capital gains earnings to Buffet’s secretary’s job earnings. Does he really believe that people don’t know the difference between capital gains taxes & marginal tax rates?
Liberals believe that a 30% tax is twice as much as a 15% tax. It isn’t & Obama knows it. During a presidential debate on the topic of the capital gains tax rate, Charlie Gibson said to Obama, “And in each instance, when the rate dropped, revenues from the tax increased, the govt. took in MORE money…when the tax increased, the revenues went DOWN. So why raise it at all, especially given the fact that 100 million people…own stock & would be affected?”
Obama answered, “…for the purposes of FAIRNESS…”
http://www.youtube.com/watch?v=__L5DOxghD4
Raising the capital gains tax would DROP tax revenues & hurt the economy & 100 million people, but it’s FAIRNESS.
Lil' Barry Bailout (Revised Downward)
January 25th, 2012
12:10 pm
Why didn’t Obozo raise tax rates?
The receptacles can’t answer.
Ernest T. Bass
January 25th, 2012
12:37 pm
You said taxes are low now. How high should they be & on what income brackets?
They should be more than 14 percent for multi millionaires like Romney who gets most of his income from capital gains.
Why should I pay double the rate he does?
Republican presidential candidate Mitt Romney and his wife, Ann, paid $3 million in federal taxes in 2010 on nearly $21.7 million of income derived from a vast array of investments, amounting to an effective tax rate of 13.9 percent, according returns released by his campaign Tuesday.
In addition, the Romneys expect to pay $3.2 million on $20.9 million of income for the 2011 tax year, for an effective rate of 15.4 percent.
That’s substantially lower than the top 35 percent marginal tax rate on wages and salaries – and much lower than the rate than his political rivals. President Barack Obama paid an effective tax rate of 26 percent in 2010, while former House Speaker Newt Gingrich paid a rate of 31.6 percent. Experts say Romney benefits from a tax code that allows investors to keep more of their income than wage earners, particularly investors in the rarefied world of private equity.
Even among his wealthy peers – a cohort that particularly benefits from the lower capital gains rate – Romney’s rate is below the average 18.5 percent effective tax rate paid by the richest 1 percent, according to the Tax Policy Center.
Even a dummy knows if you have 10 units of something and pay only 1.5 of those units in taxes you are paying less than someone who has 5 units of something and pays 3.5 of those back.
You guys can keep believing in “trickle down” economics but it doesn’t work.
Maybe we should just cut rich peoples taxes to 0% and give them all our money.
Think of all the jobs then !!!!!
Ernest T. Bass
January 25th, 2012
12:39 pm
We should start a Paypal account and have everyone send all income to Romney.
Think of the jobs he will create !!!!
Think of all that money trickling down to us !!!
Regular people cannot be trusted with money. It should all go to the rich !!!!!
Then they can decide how much to trickle our way.
If we’ve been good maybe they will let us have a little more !!!
Ernest T. Bass
January 25th, 2012
12:45 pm
One other thing.
Obama will win again.
And there is nothing you can do about it.
Gingrich cant win a general election and Gordon Gekko (Romney) has far too many problems.
Obama wins in a landslide.
Somewhere over there
January 25th, 2012
12:46 pm
“Think of all the jobs then !!!!!”
Where are all the jobs Obama the 1% president promised back in 08?
Somewhere over there
January 25th, 2012
12:47 pm
“Obama will win again.”
You shouldn’t bet your double wide trailer on that lame prediction.
“Obama wins in a landslide.”
HAHAHA!!!!!!!!!!!
Somewhere over there
January 25th, 2012
12:48 pm
“Gingrich cant win a general election and Gordon Gekko (Romney) has far too many problems.”
Unemployment is 8.6%, Obama’s approval ratings are in the low 40s, he’s lost independents etc. His record as president is horrible.
Obama has waaaaaaaaaaaaaaaay more problems than Newt and Mitt combined.
See ya in November, racist.
Ernest T. Bass
January 25th, 2012
1:00 pm
See ya in November, racist.
See ya there !!!
Obama hasn’t been the best but when people look at the alternatives trust me Obama is going to look a whole lot better.
Ernest T. Bass
January 25th, 2012
1:01 pm
You shouldn’t bet your double wide trailer on that lame prediction.
You shouldn’t bet yours on Obama losing.
See I can call names and make up stuff too.