Romney's tax rate: 13.9%- Page 5

[SonofMammaMiaSam]

Posted: 1/26/12 at 7:37am

I wouldn't be so pissy about the whole thing if it weren't for the fact that this single, gay (can't get married) taxpayer has been paying in the 30%+ range his entire working career while these pompous windbags enjoy the fruits of their laws.

[madbrian]

Posted: 1/26/12 at 8:16am

"We need compromise and reasonable thought but what we have are people like Gingrich and others, including Obama, who are set to pit one side against the other."

I'm confounded by the fact that the left thinks Obama has compromised to the point of caving and countless issues, but the right still finds him divisive. I think healthcare is a perfect example. Market driven exchanges, mandated coverage, no government run plan. If you described 'Obamacare' to someone five years ago, they would have sworn it was a GOP initiative. Yet one Republican voted for it, and they have made its repeal the hallmark of their campaigns.

Updated On: 1/26/12 at 08:16 AM

[henrikegerman]

Posted: 1/26/12 at 8:37am

Madbrian, it doesn't confound me as much as confirms that Obama knows exactly what he's doing from the standpoint of doing the best he can as a middle of the road politician who compromises and makes tough choices, who tries to govern as president of all of us, and of course is going to disappoint all of us but do, all things considered, a pretty damned good job.

What confounds me is that some on the left expected anything other from him, or anyone else who could possibly be elected to the presidency. Although we may (and should) carp about this and that, he is, more or less, the best we can hope for. What I'm hoping is that the American people won't be fools enough to fall for the right's nonsense that he's some kind of Hawaiian - or Kenyan - Trotsky.

[madbrian]

Posted: 1/26/12 at 8:44am

I share your concern. The media is complicit in portraying him as an extreme liberal, which riles the right against him, but the left is disillusioned by the fact that he is indeed very centrist. When you look at what has been accomplished over the last three years, considering what he inherited and the Congress he had to deal with, the results are actually quite impressive.

[YouWantitWhen????]

Posted: 1/26/12 at 10:17am

^^^^^

Preach it.

[SonofRobbieJ]

Posted: 1/26/12 at 10:52am

I would like to echo SOMMS point about paying taxes.

Anyone who dares to talk about fairness in the tax code to people who are legally barred from enjoying the benefits that straight couples enjoy (particularly the odious inhertiance taxes) should reeeeeeally consider taking their arguments elsewhere.

[YouWantitWhen????]

Posted: 1/26/12 at 12:33pm

I am also curious on why "Unearned Income" (which is how Romney's income is described for tax purposes) is treated any different than wages. My company pays taxes, hires and fires based upon in part, the cost of doing business, and what is left is what they pay employees. Should my bonus be taxed at 15% since it is not part of my base pay? That is based upon company performance and its earnings, which are already taxed. If my company pays taxes at a greater rate than other companies, should I get a break on my income taxes since the pot of money was already taxed once before it got to me?

Why do I care whether this pot of money has been taxed upstream? What does that have to do with Romney tax burden and how much he received?

To me, the argument is one huge red herring. If you are using a corporation to shield yourself from personal responsibility for the conduct of your business, then one of the costs of doing so is that entity is taxed. It is the bargain you make. To now claim that your personal unearned income taxes should be less because the structure you chose to set up to limit your personals exposure has to pay taxes because it exists just reeks of an entitlement mentality.

[PalJoey]

Posted: 1/26/12 at 12:54pm

That's why we need tax reform--which will never be passed by legislators who benefit from the current tax code.

This Daily Beast article by Ben Jacobs spells out how it's done:
The Scandal of Mitt Romney’s Low Taxes Is That They’re Legal

Updated On: 1/26/12 at 12:54 PM

Posted: 1/26/12 at 4:06pm

The right can not sell this unless they convince middle class voters that somehow it will improve their lives if the top tier get even lower taxes- so they have to manufacture a reason.

Now there is a talking point that really, if we CUT capital Gains taxes EVEN MORE, tax revenues will RISE. Several Republicans have earnestly told me this, but not one of them can explain it except for one soul who actually told me that the super-rich are less likely to commit tax fraud if we charge them less.

Incidentally, tax rates are lower now (Capital Gains and federal income tax brackets) than any time since WWII. If we reverted to the rates under REAGAN, the deficit would be gone.

[Yawper]

Posted: 1/26/12 at 7:37pm

YWIW if you take your after tax earnings and invest it as a capital expenditure (e.g. home improvements) and then realize a profit from that investment (e.g. when you sell your house) you, too, can pay the lower tax rate on that capital gain. Would you really want to pay top rates on that profit, especially since the money you put into the house was already taxed once at earned income rates?

[YouWantitWhen????]

Posted: 1/26/12 at 10:01pm

The basis of any home is increased by the amount of capital improvements, so you are not in fact taxed on that amount. You are only taxed on the increase value on the asset after the costs of improvements are factored.

For homes you own, I believe you are entitled to retain 250K of any gain tax free. For joint filers, that amount is $500K. So, to me, your question is not applicable.

For those who flip homes, why should they be entitled to pay 15% of they hold title if they more than one year?

And, I never said I wanted them to pay top rates - I said the argument Romney made was circular. An independent legal entity's tax obligation (i.e., a corporation) should not have any bearing on an individual's personal tax obligation. There are legal benefits for setting up a corporation - the cost of those benefits is that corporations pay taxes. Some pay more, others pay less. To take advantage of the corporate structure, and the complain about the consequences of such seems a bit disingenuous.

[Yawper]

Posted: 1/27/12 at 8:17am

"An independent legal entity's tax obligation (i.e., a corporation) should not have any bearing on an individual's personal tax obligation."

That's not the point of the issue - corporations aren't the only source of capital gains.

However, when one purchases stock then the return on that investment is affected by the tax the corporation pays.

Also, the funds invested have been previously taxed somewhere along the line, too - as earned income, previous capital gains, etc.

The purpose of a capital gains tax rate is to get people with funds to take the risk of investing it somewhere instead of just sitting on it in a failsafe .

Updated On: 1/27/12 at 08:17 AM

[YouWantitWhen????]

Posted: 1/27/12 at 10:21am

Your missing my point. I do not think we are responding to the same issue. Romney defended his tax rate himself by saying the funds were taxed at the corporate rate before they got to him - as though the tax burden of he and the corporation distributing the proceeds were one and the same. He said:

"One of the reasons why we have a lower tax rate on capital gains is because capital gains are also being taxed at the corporate level. So as businesses earn profits, that’s taxed at 35 percent, then as they distribute those profits as dividends, that’s taxed at 15 percent more. So, all total, the tax rate is really closer to 45 or 50 percent."

I am saying that he and the corporate are separate legal entities, and the argument is a red herring.

I fully understand the reasoning behind capital gains tax. And, I do not disagree with the premise that if you reinvest funds in the market, your tax rate should not be as high as if you take a distribution.

My argument is that Mitt is trying to have it both ways on saying somehow he is linked to the taxes paid by the corporation before it became a distribution - he is not.

[madbrian]

Posted: 1/27/12 at 10:56am

Also, given that we now know that many of America's largest corporations pay little or no taxes themselves, his argument has even less weight with us common folk.

Posted: 1/27/12 at 11:06am

And let me jump in with this: We don't have to wonder "What if?" in regards to capital gains taxes. They are lower now than at any time since WWII. Has it produced a booming economy?

[YouWantitWhen????]

Posted: 1/27/12 at 11:08am

Well, yeah, there's that as well. But since I apparently was not being clear in why his argument is so self-serving and flawed (IMO), I wanted to keep it simple.

He wants the benefit of the corporate structure in terms of liability and flexibility, but now wants to impute its tax obligations to himself to try to soften the fact that under our current system, he pays a very low tax rate. If that corporation ever gets sued, is fined, or goes into bankruptcy, he will say "that's no me my friends, that is a separate legal entity." It is more double-talk/smoke and mirrors.

[Yawper]

Posted: 1/27/12 at 3:49pm

"If that corporation ever gets sued, is fined, or goes into bankruptcy, he will say 'that's no me my friends, that is a separate legal entity.'"

and his investment in the company will take a hit, if not be entirely wiped out

[YouWantitWhen????]

Posted: 1/27/12 at 4:28pm

Yawper, I am not sure what your point is, other than to disagree with me.


BTW - if he has investment loss, usually he gets a tax write off for it. Just saying. So usually, you can offset future profits against that loss. But generally, the years of gains he has received pre-bankruptcy/fine/litigation would not be touched. He has shielded himself from personal liability by using the corporate structure. The fact that the corporate structure is taxed is the cost of limiting that liability.

IMO, he should not be able to use the taxes paid by the corporation to someone inflate the amount of taxes he personally paid. It is a red herring. That is my point.

[Yawper]

Posted: 1/27/12 at 10:17pm

The problem is Romney individually is getting tagged with something that ALL moneyed investors do, regardless of their party affiliation, and that's bull****.

[Kad]

Posted: 1/27/12 at 11:57pm

Because Romney is running for PRESIDENT.

[Yawper]

Posted: 1/28/12 at 12:13am

and not the first wealthy person to do so.

At least he doesn't come from a family of bootleggers or opium haulers.

Updated On: 1/28/12 at 12:13 AM

[YouWantitWhen????]

Posted: 1/28/12 at 1:46am

And what does any of that have to do with anything?

I don't like the tax code, but he legally took advantage of its rules, and while I may think it is unfair, it is completely legal.

Clearly Romney has an issue with it, and knows that it looks bad (though again, completely legal) because he intentionally tried to muddy the waters by somehow claiming the corporate tax obligation was imputed to him personally.

If he had any balls, he would say if you have a problem, fix the tax code. But instead, he tried to claim that HIS tax burden was higher than it really was.

If that does not bother you, then so be it. It bothers me.

[dented146]

Posted: 1/28/12 at 2:30am

There are inequities in the tax code. Most would probably agree with that statement. The question to answer is where is the line for all people where fairness, sound government, and the creation of a successful capitalist system meet. 100M people will have as many answers. But it is possible to have that discussion.

Churchill said something to the effect That the vice of capitalism is the uneven blessings of prosperity; while the virtue of socialism is the even distribution of misery.

When times are bad it's harder to see those blessings and it's normal to see and be stung by the the unfairness.

[erinrebecca]

Posted: 1/28/12 at 2:09pm

dented is right. There are inequities but that's the way it is. It isn't as simple as comparing the tax rates paid by Obama and Romney. Most of Romney's income, if I'm not mistaken, is investment income, not earned income and the reality is that investment income is taxed at a much lower rate. Obama would be paying the same rate on his investment income, if he had any, as would anyone else in the U.S., regardless of how rich or poor they are. The tax structure in the U.S. needs a complete overhaul, for everyone.

[YouWantitWhen????]

Posted: 1/28/12 at 2:38pm

I agree with both of you.

The problem is, that those benefiting from the current tax code are the ones making the decisions - or funding those making the decisions. I also agree there is a fine balance, and do not believe that the tax rates of yesteryear (i.e., the idyllic 50's to many) which it an astonishing 90%.

I don't necessarily believe that unearned income should be taxed at the same level as normal wages (because there is component to spur investment and the like), but I do think that the taxes on unearned income should be tiered.

People should be rewarded for risk taking an ingenuity - but when you are taking home over $20 Million a year in unearned income, I think that you should be paying a bit more tax on last millions than the first.

Again, just my opinion, but if you are paying 25 or 25% as opposed to 15 after the first million, I really don't think it is going to be a material disincentive.

Tax Rates