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
jms
January 25th, 2012
1:04 pm
“Can anyone tell me what “fair share” equates to?”
For some it means progressive tax rates. For others it means even more steeply progressive tax rates.
Ernest T. Bass
January 25th, 2012
1:07 pm
http://www.nmvoices.org/wp-content/uploads/2011/09/job-growth-chart.jpg
Thank god for the Obama recovery huh.
Just imagine if we had stayed on that same path we were on.
Somewhere over there
January 25th, 2012
1:54 pm
“Obama hasn’t been the best but when people look at the alternatives trust me Obama is going to look a whole lot better.”
HAHAHA!!!!!!!!!
“See I can call names and make up stuff too.”
But you didn’t call me a name, goober.
Somewhere over there
January 25th, 2012
1:54 pm
“Just imagine if we had stayed on that same path we were on.”
Yeah, unemployment might be 9%. Imagine that!
Linda
January 25th, 2012
2:00 pm
Mr. Bass, You said you paid double the tax rate as Romney. If you paid 30% on your income & had disposable income to invest, do you think you should pay 30% twice?
Where did Romney get his money to invest? He received it in wages when he was employed & probably paid the highest marginal tax rate of 35%. When he invests his disposable income, should be pay another 30 or 35% on the gain again?
There is absolutely nothing “rarefied” about investing. The capital gains tax code applies to any investment, whether it is stocks, bonds, options, dividends, real estate, arts, rugs, antiques, jewelry, precious metals, wine, stamps, coins, etc. You would be subject to same tax code if you sold an old pie safe at a yard sale. Teachers, ministers, day care providers, etc. are typical investors. Anyone who is self-employed has to plan for they own retirement. Governments invest pensions.
If “trickle down” economics does not work, maybe you could give some insight into how Keynesian economics has worked for us for the last 4 years.
Regular people CAN be trusted with money. Money nor the lack of it does not make people irregular. It’s the fed. govt. that can’t be trusted with taxpayers’ money. Not only do we have a $15 T natl. debt, but the idiots in Washington spent every dime in both the Social Security & Medicare “Trust” Funds to the tune of $97 T. Both are full of chits, that is, little pieces of paper that say IOU.
What is it you like about Obama’s policies? Since you quote the Bible, are you not horrified that Obama wants to take billions of dollars away from charities?
My upbringing & my faith has led me to respect everyone who is respectful. I hold no grudges against the rich. I’m not jealous or envious. I appreciate their donations to charities & for additions & entire buildings at our hospitals, colleges, universities, museums, etc. If a rich person buys a yacht, a lot of blue collar workers appreciate the jobs it takes to build it.
Linda
January 25th, 2012
2:08 pm
Mr. Bass@1:07, Your site is incorrect. It does not even correspond to the unemployment rates you quoted earlier. The unemployment rate is arrived at by subtracting jobs lost from jobs created.
I’ll answer the question I asked you earlier. There has not been ONE single, solitary 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. The economic stimulus of almost $1 T was a complete waste.
Somewhere over there
January 25th, 2012
2:09 pm
Ernest T. Bass
Your little chart comes from the office of the Democratic Leader. You may want to try to find something a little less biased and truthful.
If the economy is good, why is unemployment 8.6%?
Why aren’t you crying about Obama, a millionaire, paying more in taxes?
Come on little fella, you can do better than that.
Somewhere over there
January 25th, 2012
2:09 pm
” Your site is incorrect.”
Linda, that “site” is Democrat garbage. If you look to the bottom left, you’ll notice something interesting.
JF McNamara
January 25th, 2012
2:19 pm
Linda,
If I make $1300 working, I pay $300 in taxes leaving me with $1000. I now take that $1000 and invest it. At the end of one year, I have a total of $1200 from my investment. I will only pay on the gain, meaning I only pay taxes on $200 ($1200 – $1000) profit.
Yes, he should pay taxes on the $200. That’s income. Its not paying 30% twice. Its paying 30% on two different income streams.
The wealthy make most of their money from investments where others work for it. They live off of their investment income like you live off the income from your business or job. That being the case, they should pay the same rate. Why should there be favoritism based on how you acquire your income?
Somewhere over there
January 25th, 2012
2:21 pm
“The wealthy make most of their money from investments where others work for it.”
Simple solution: Invest money and make money. Geez, is that too hard for you to comprehend?
“Why should there be favoritism based on how you acquire your income?”
Why should you get to decide how much hard working people have to pay? If people like you weren’t so lazy, you’d have more money.
Pretty simple, cupcake.
Linda
January 25th, 2012
2:28 pm
Somewhere, for about 2 1/2 years, month after month after month, the Democrats have been giving Obama credit for the jobs created & blaming Bush for the jobs lost. Obama owns half of the economy & Bush is still responsible for the other half. Obama owns the plus side of the math & Bush owns the minus side. Obama says it math, but is seems fuzzy to me.
The last time a Democrat posted this same chart, it specifically stated that it was from Nancy Pelosi’s office.
http://articles.businessinsider.com/2010-02-05/wall_street/30088805_1
JF McNamara
January 25th, 2012
2:32 pm
Somewhere over there,
I do invest my money and make money. I just don’t have $200M to invest so I have a job too.
I’m lazy? Yeah, working 60 hours a week is lazy. If only I worked harder, I would have a jillion dollars and manna would fall from the heavens. That’s the stupidest **** I’ve ever heard.
Why should you get to decide how much hard working people have to pay?
Why should you? We have to pay taxes to run the government, provide defense, and get other value added services. My vote counts just as much as yours. You aren’t special.
Lil' Barry Bailout (Revised Downward)
January 25th, 2012
2:42 pm
Why should I pay double the rate he does?
——–
You don’t. Your capital gains rate is the same as Romney’s.
Duh.
Somewhere over there
January 25th, 2012
2:55 pm
” I just don’t have $200M to invest so I have a job too.”
So quit complaining.
“I’m lazy? Yeah, working 60 hours a week is lazy. If only I worked harder, I would have a jillion dollars and manna would fall from the heavens. That’s the stupidest **** I’ve ever heard.”
So stop complaining.
“Why should you get to decide how much hard working people have to pay?”
Huh?
“My vote counts just as much as yours.”
Doubt it.
Linda
January 25th, 2012
2:55 pm
Mr. McNamara@2:19, My point was that the money an investor invests does not come out of thin air. It’s usually obtained from income from a job after fed. & state taxes are paid, for decades. When the investor sells his investment, he pays taxes AGAIN.
The wealthy work or worked for their money just like everyone else. My father never walked a step in his life & could not afford a wheelchair until he was 40. He died wealthy & I can assure you that no one worked any harder than he did, having to crawl or be toted. Most people don’t begin cashing in their investments until they retire.
There are many reasons why congress set one of the capital gains rates at 15%. One is that the fed. revenues decrease when the rate increases. Another is to encourage investments in the economy.
Somewhere over there
January 25th, 2012
2:56 pm
Linda
SPOT ON!!!!
Hillbilly D
January 25th, 2012
3:04 pm
When an investor sells something at a profit, they pay tax on the gain, not the entire amount.
Linda
January 25th, 2012
3:23 pm
Mr. McNamar@2:19, If, as you said, the wealthy made most of their money from investments, where others work for it, we would not have had a pro-football season & be looking forward to the Super Bowl, we would not have pro-basketball, we would not have pro-golf, we would not have Ali, we would have no movies, we would have only C-Span to watch in the evenings, we would have no Apples, we would have no computer programs & we would be living in tents with nothing to eat & nothing to drive. If CEOs quit when they became wealthy, we would have unsuccessful corporations. Without corporations, we would not have the components to build our homes, the appliances & accessories to equip them, the food we eat or the vehicles we drive.
Most wealthy people became wealthy because they worked. Wealthy people LOVE to work. They work with more passion than most of us.
Dusty
January 25th, 2012
4:06 pm
Where is Kyle?
Some good comments here on investments but let’s move on.
Obama has made another “I’m so great” speech and Democrats are heating up the airways.
Even Pelosi has added a wooden nickel to the race with her suggestions that “she knows SOMETHING” about Gingrich. Whoopee! What will it be this time? That Gingrich is really Jack the Ripper and he pays no income tax??
Let us Republicans show more “vigor” in our work. We need to get going if we plan to rid ourselves of a president failing at his job. That is, of course, Obama the three year wonder of failing achievements. (You have to mention his name because many libs seem to think that Bush is still president.)
Somewhere over there
January 25th, 2012
4:08 pm
“Even Pelosi has added a wooden nickel to the race with her suggestions that “she knows SOMETHING” about Gingrich. ”
Now she’s backtracking.
JF McNamara
January 25th, 2012
4:40 pm
Linda,
Good for your Dad, but you know the difference between when he was around and now? Rich people paid more taxes and it allowed the middle class to advance. Now that your family is at(near) the top, you seek to change the system he used to advance, and are fighting feverishly against going back to it.
If the concentration of wealth was increasing like it was in your father’s time, its likely he would have turned out middle class too. Start a business today with people having less disposable income like they have today, and see how that effects the outcome. I’ll show him a due measure of respect, because it takes some greatness to become rich. You need a system to help that happen as well though. The meritocracy your father came up in has turned more aristocratic.
As for your other comment, I don’t get what you mean. The wealthy football owners, movie studio owners, and technology company owners are investors. Does Blank work for the Falcons? Do the major shareholders at Lion’s Gate direct movies? Bill Gates does not work at Microsoft and Steve Job’s family does not work at Apple. Venture Capital firms own most tech firms. Are they working at that company?
A CEO, in most cases, is an employee of the real owners. The Shareholders. The owners (shareholders) don’t actually do work except in special cases like Steve Jobs.
MarkV
January 25th, 2012
4:49 pm
Dusty @4:06 pm
Dusty,
Since you have allowed me to ask you questions, I am taking advantage of that. You have written about “a president failing at his job, “ meaning, naturally, Obama. My question to you is the following: Do you submit that “failing at his job” comment as your opinion, or as a statement of fact?
Michael H. Smith
January 25th, 2012
5:50 pm
I just had ta do it Mitt, cause its’ just not fair.
From Nealz Newz
Raise the capital gains taxes “for the purpose of fairness”
That was Barack Obama during the campaign in 2008: “Well Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness.”
….If you are a regular listener to the show, or reader of Nealz Nuze, you know that history shows that raising the capital gains rate actually lowers government revenues, while decreasing the capital gains rate increases government revenues. Here are just a few examples …
Between 1968 and 1972 rates increased by 10 percentage points and revenues fell 21%.
In 1978 the rate fell by 15 points from 35% to 20% and revenues increased by 46%.
In 1986 the rate was raised by 8 points to 28% and by 1991 15% less revenue was being raised.
In 1996 the rate was reduced by 8 points to 20% again and by 2000 revenues had grown by some 50%
In 2003 the rate was cut to 15% and revenues grew by 45% over the following three years.
When presented with the specific example from the Clinton administration, Barack Obama replied with the quote from above. That’s the kind of baseless wealth envy we are dealing with, folks.
This is a time when we need to be encouraging investments. Start up small businesses are responsible for most new jobs in America, at least they were for a long stretch of our history. US experts agree that increasing capital gains taxes ‘significantly damages the economy.”
But don’t bother these Democrats with the facts. Those just get in the way of their reelection campaigns based on wealth envy.
http://www.boortz.com/weblogs/nealz-nuze/2012/jan/25/raise-capital-gains-taxes-purpose-fairness/
Dusty
January 25th, 2012
5:56 pm
MarkV
Well, I usually try to be truthful. So that is my opinion that it is a fact that President Obama is failing at the job.
Why?
Because he seems unable to do anything about debt reduction, unemployment reduction, price of gas & grocery reduction, and reduction of friction with Congress. He is good at making plans that do not seem to ever meet the need or even happen.
He is now going to reduce the military, the one group that has performed well during his three years.
I will bet you one heated bird bath that you don’t agree with me. Lay your cards on the table!!!
Linda
January 25th, 2012
6:15 pm
Mr. McNamara@4:40, You are wrong on all your assumptions. The taxes paid by the rich or anyone else for that matter did not affect my father. He didn’t “start” a business. He was merely trying to survive. There was NO “disposable” income. There was NO income. There was NO money. There was NO system. There was NO meritocracy. My father was unable to finish elementary school.
There are NO classes. You either HAVE class or you don’t. My father had the same class his entire life. He was born poor & died wealthy, but he never changed. No one knew he had become wealthy, not even me. He never met anyone who was less deserving than he was, one of the most giving persons one could ever meet. He inspired everyone who knew him. His town honored him in life & death.
My father succeeded without a dime from the fed. govt. He helped more people than the fed. govt. could ever dream of, in ways that actually made a difference in their lives. He would be appalled at the fed. govt. today, especially at the massive debt. He never paid a cent of interest during his entire life. The fed. govt. is hurting more of us than it is helping. We are failing as a country.
You said, “The wealthy make most of their money from investments where others work for it.” What an insulting statement. Wealthy athletes play sports with passion. Wealthy actors & actresses love their work. It was death, not wealth, that stopped Steve Jobs from working. Wealthy Bill Gates is still a mover & shaker. Wealthy CEOs work in high gear. The point is that without wealthy people actually working & performing their work with a passion, we would be in the Dark Ages.
Linda
January 25th, 2012
6:20 pm
Michael@5:50, See my comment @11:59 AM. You are 6 hours too late. I thunk it first. Copycat!
MarkV
January 25th, 2012
6:26 pm
Dusty @5:56 pm
Dusty,
You are right in one respect, which is that I do not agree with you. (No heated birdbath for that.) But you have avoided a straight answer. There are facts, and there are opinions. You cannot have an opinion that something is or is not a fact. At most, you can believe it.
To put it differently, if it is your opinion that the President is failing, I cannot and will not dispute that. I will just say that my opinion is different, that he is not failing, and that will be it. But I will argue that the facts do not support your opinion.
@@
January 25th, 2012
7:11 pm
“Slate’s” John Dickerson described Obama’s SoTU as “constipated”.
In the end, it was a constipated version of his speech in Osawatomie, Kan. in December.
Why didn’t he just say “full of crap”?
schnirt
Linda
January 25th, 2012
7:13 pm
The zillions of economic indicators prove that the president’s policies have failed, up one side & down the other. Who can argue with even half of those?
Linda
January 25th, 2012
7:15 pm
@@, What is schnirt?
@@
January 25th, 2012
7:22 pm
What is schnirt?
A refined “schnort”. It’s more feminine.
(ISH) Insert Smile Here.
I don’t do emoticons…despise the things.
GodHatesTrash, Superstar
January 25th, 2012
7:40 pm
Schnirt is what most of Kyle’s Kavalcade of Konservative Kooks and KKKrazies have for brains.
Lil' Barry Bailout (Revised Downward)
January 25th, 2012
7:46 pm
Maggots are what Obozo has for supporters.
GodHatesTrash, Superstar
January 25th, 2012
7:49 pm
Ahhh, L’il Barry with his santorum breath speaks!
Creep.
@@
January 25th, 2012
7:49 pm
GHT:
‘k.
@@
January 25th, 2012
8:00 pm
“For those in middle income, anyone earning under $200,000 a year, I would propose paying no taxes whatsoever on their savings. I think the people who’ve been hurt most in the Obama economy should be able to save money tax free,” Romney says.
If it’s in my savings account, I’ve already paid taxes on it. If it’s in an IRA or 401K, it’s already tax exempt. No mention of taxes upon withdrawal.
Nitpickin’? Maybe…but the guy has a communication problem.
Linda
January 25th, 2012
8:19 pm
Mr. Trash@7:40, It’s 2012. Why are you still defending Obama’s policies? How do you think any of them have worked for the economy or the American people? Why are you against conservatives? All we are trying to do is preventing any more debt & trying to keep our country from tanking.
Dusty
January 25th, 2012
8:35 pm
Ah MarkV
As Sargent Friday said, “Just the facts, mam.” or sir, in your case.
You want my opinion to be filled with facts, but you offered none in your disagreement.. I have told you my reasons. Now it is your turn. No charts please. No poll nunmbers. (Do you work for the IRS?) Just checking!! Don’t want to get on their bad side.
You owe me a birdbath.
I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...
January 25th, 2012
8:40 pm
The trashman polluteth.
I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...
January 25th, 2012
8:56 pm
Just think America, in 9 months we will be rid of obozo and the dummycrat party.
Doesn’t the very thought send chills up your spine?
My goodness, we will no longer be an Arab dictatorship, an economic hellhole or the most ignorant laughingstock on the entire Planet Earth.
Fasten your seatbelts, fellow countryman, because we’re gonna come roarin back.
GodHatesTrash, Superstar
January 25th, 2012
8:57 pm
I am not pro-Obama, I am anti-stupid – that’s why you find me so intimidating.
GodHatesTrash, Superstar
January 25th, 2012
9:04 pm
Reality check, kkkons – no matter who wins on November 6, 2012; on Wednesday November 7, 2012 you’ll still be a bitter angry LOSER idiot.
Lil' Barry Bailout (Revised Downward)
January 25th, 2012
9:10 pm
If Obozo wins, all Americans are losers.
I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...
January 25th, 2012
9:10 pm
Most narcissists do consider themselves smarter than others with out ever explaining why.
Just sayin…
Linda
January 25th, 2012
9:19 pm
Mr. Trash@8:57 & 9:04, Why will you not answer my question?
Dusty
January 25th, 2012
9:36 pm
Well, that Newt is something!! I see where he has told Floridians that he would plan a colony on the moon. Yes, sir, the moon!!
He did not say so but I bet he would give the honor of “first moon colonists” to a contingent of Democrats. I bet he even has a list. Yes, indeed, and let them stay permanently.
Just a matter of sharing the glory, of course.
MarkV
January 25th, 2012
9:51 pm
Dusty @8:35 pm
Sorry, Dusty, no birdbath for you, because I did not accept your wager.
“You want my opinion to be filled with facts, but you offered none in your disagreement.”
Why should I offer any facts? I did not write that facts supported my disagreement. I merely wrote that I disagreed with your opinion, and I argued that facts did not support your opinion. See the difference?
GodHatesTrash, Superstar
January 25th, 2012
9:55 pm
Curly, pretty funny coming from you.
Actually, very funny – don’t worry – I’m laughing at you, not with you, little buddy.
Fast and Furious Spending
January 25th, 2012
9:58 pm
I am anti-stupid – that’s why you find me so intimidating.
GodHatesTrash, Superstar
January 25th, 2012
9:04 pm
Reality check, kkkons
The above taken verbatim–the klan is everywhere. Wow, why don’t you get Jay Bookman to leave his little dead-horse powow tomorrow about birthers and cover this resurgence of “racism” –in 2012? Maybe you could get Cynthia to take her old job back of sneering at white conservatives.
We don’t find you intimidating. We find you unappealing, absurd, petulant, childish, whining, disgusting, obsessed with your own anatomy, adolescent, obnoxious and puerile. One argues with the intimidating; with the delusional, we do not.
Oh, and don’t let us lead you out of your liberal fantasy.
GodHatesTrash, Superstar
January 25th, 2012
10:07 pm
Little lady, we all know you aren’t the sharpest knife in the drawer, even the other Klowns in Kyle’s Kavalcade of Konservative Kooks and KKKrazies cringe when reading your empty, vacuous, monotonous posts.
Regardless, I responded to your drivel at 8:19 pm by letting you know that I am not pro-Obama so much as I am anti-stupid, so naturally someone like you would see me as an enemy. I have a great deal of disdain for the tea-t-ards and their simple hate-and-fear filled little minds, Obama has nothing to do with that.
Face it – tea partiers are knuckle-dragging cave-people, who want to drag the whole world down into the mud with them.