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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWhy should Romney's investment income get taxed at a lower rate than most Americans'
The argument that's used to justify the capital gains rate he's apparently paying is that income like Romney's is somehow connected to 'creating jobs'. That's the nub of republicans' arguments against higher taxes for the wealthiest 1%. Raise their taxes, they say, and you're stifling jobs.
Where is Romney 'creating jobs' with his lower tax rate, though? It looks like he's just doing what he's always done. He's gaming the tax code for his profit-taking ventures.
from NYT: http://www.mercurynews.com/presidentelect/ci_19762407
____ Romney's admission left unclear -- and his campaign declined to clarify -- whether the 15 percent he was referring to represented his overall tax burden or simply his federal income taxes. That makes it hard to compare the figure with the tax burdens of a typical middle-class American -- or of Romney's opponents. President Barack Obama, for instance, reported paying an effective federal tax rate of 26 percent on his 2010 family income.
But in acknowledging that most of his income comes from investments, Romney underscored a fact likely to figure prominently in attacks from Obama and other Democrats in the coming months: He is among the small percentage of very wealthy Americans who have benefited enormously from shifts in federal tax policy that have pushed federal tax rates on investment income well below the top 35 percent rate for wages and salaries, which constitute most earnings for the vast majority of people.
"The low taxes on capital gains and dividends are why people who make a ton of money, which is largely from investment income, do awfully well," said Robert McIntyre, the director of Citizens for Tax Justice, which advocates for more progressive taxation. "The Warren Buffetts, the hedge fund managers -- they pay really low tax rates."
During 2010 and the first nine months of 2011, the Romney family had at least $9.6 million in income, according to a financial disclosure filed in August, and possibly much more . . .
read: http://www.mercurynews.com/presidentelect/ci_19762407
from WH spokesman Jay Carney: http://abcnews.go.com/blogs/politics/2012/01/white-house-romneys-father-established-tradition-of-tax-disclosure/
What does the president think of that? the reporter asked.
"This only illuminates what (the President) believes is
an issue, which is that everybody whos working hard ought to pay their fair share
and that includes millionaires who might be paying an effective tax rate of 15 percent when folks making $50(,000) or $75,000 or $100,000 a year are paying much more. He thinks we ought to fix that, and that is an element of the approach he takes in his economic proposals, as you know.
RKP5637
(67,088 posts)to create jobs. They were financial wizards that played the markets and created some of their own financial products. They were not interested in creating jobs ... any job they might create along the way was considered a liability. The notion that wealthy individuals are frothing at the mouth to create jobs for Americans is a snow job dished out by the politicians that do their bidding
BOHICA12
(471 posts)The Kardashians are great job creators .... they spend money like water. Somebody has to make, market, sell, deliver, and load all that junk in their trunk.
RKP5637
(67,088 posts)The Genealogist
(4,723 posts)"They were financial wizards that played the markets and created some of their own financial products."
Now I don't know much about the Kardashians, except that they are rich people that a huge portion of the US population is obsessed with, but what little I have heard about them doesn't suggest that this description would apply to them. Too, when I think of the people who are getting rich on investments, I am thinking of someone pretty shrewd, who is probably not going to spend money like water. They would probably be reinvesting their profits, not spending money like water.
Of course, some rich people do spend money like water. And, perhaps the Kardashians have someone who keeps reinvesting their money for them and keeps them from spending everything on crap.
csziggy
(34,131 posts)It just accumulates. The estimates I have seen of Romney's wealth is that he is worth 250 million dollars. If he gets a return of 5% a year on that, it is 12.5 million a year. Over $34,000 a DAY.
How can any one family spend that much money? Even if they have a boatload of kids, that is still a lot of money to be held by one family. And I doubt Romney's children and grandchildren don't already have a good amount of their share of the family fortune. Romney has probably already gifted them with sizable amounts in order to reduce estate taxes.
cherokeeprogressive
(24,853 posts)Am I wrong in that assumption?
Not just "most" Americans, but everyone whose investment income is subject to the capital gains tax is taxed at 15%, right?
You know, I'm not a rethug OR a Romney supporter, but I think anyone who supported Kerry/Edwards that is now crowing from the rooftops about Romney's good fortune is hypocritical.
KharmaTrain
(31,706 posts)Assume that Mittens was earning $5 million a year at Bain and actually paying the top rate (38% pre 2003) on that income. He still banks a large chunk of it. That money earns interest which is what he uses to live on. In theory you're paying a tax on money you already paid a tax on...why the greedy rushpublicans have long wanted to eliminate capital gains altogether...and I'm sure Mittens wants that, too.
The things we don't know is if Mittens actually did pay the full tax rate when he earned that money or used legal loopholes to avoid or defer paying full taxes on all his assets.
The more you look at Mittens Gecko's finances, the more questions get asked...and I'm hoping Team Obama does a lot of that asking this fall. Paint a picture of this greedy bastard for all to see...
Curmudgeoness
(18,219 posts)Unless I misunderstand what you are saying, it is not a tax on money you already earned. Example: I put $100 in the bank/market and that is money I have already paid tax on. I earn $5 interest on that money. I would pay tax on that $5---money that I did not have before I put the $100 in the bank. The original money is not taxed again.
As to whether or not he paid a full tax rate on money he earned is a can of worms, but you can bet there were lots of loopholes he got to use. Why else would he say he will release his tax returns in April---after this primary is behind him and long enough before the general election that we would hopefully forget.
KharmaTrain
(31,706 posts)I'm stating what I've heard over and over again as the "argument" to eliminate the capital gains. They look at the interest as some kind of free gravy...that's where the "tax on a tax" bs comes from. Not what I believe nor support. I think capital gains should be taxed at the same rate as earned income...cause that's what it is...income.
Here's hoping the Obama team doesn't forget...every candidate for the past 40 plus years have not only disclosed their most recent 1040 but also made previous ones available. In 1964 Mittens own father put out 12 years worth of returns. We need to keep demanding full disclosure. It's his true glass jaw...
BlueCheese
(2,522 posts)... is that Obama and the Democratic Congress extended the Bush-era capital gains tax cut. Had they simply done nothing, it would be 20%, as it was when Clinton left office.
Thaddeus Kosciuszko
(307 posts)would result in Mr. Doe's income, being taxed at a lower rate.
I cannot disagree, that lower rates on investment income finds more support in the GOP camp. But a quick review of the yeahs and nays of legislation that address the issue, will reveal that Democrats, often do too.
Likewise, there are different views of their effect on economic activity. I have read many well-reasoned and substantiated analyses, that support both views. It is rational to think and there is evidence to support, that the lure of reward does attract capital. And active capital rouses dynamic interests.
Unfortunately, the politics of the issue, affects a misadjusted focus that blurs the view to a degree that a methodical and systematic analysis, looks to be beyond the realm of possible.
bigtree
(85,977 posts)would deter them from providing their services. Do you really believe there would be a lack of those firms still operating if the tax on their fees for services rendered wasn't lowered by this loophole? I seriously doubt ANY of them would get out of the business. Isn't that what we're really talking about?
Thaddeus Kosciuszko
(307 posts)and lead me to a similar presumption.
As I am now staring at an irrational unfairness. I tally it and resume the evaluation.
On occasion, I turn a curious ear towards the GOP primary and allow some words offered as Solomon-like wisdom to be considered. General Solomon recognizes the threats of our enemies and assures me, he will protect me. But when it was Solomon's turn to step on the battlefield, he stepped aside.
Next come the words of Solomon the economist, extolling the jump-start effects of cap-gain tax cuts. But when I look for Solomon?s record of experience, it is no where to be found.
Sadly, the Solomon's of our time are imposters who gained their "wisdom" from intransigent policy sheets.
I have seen quite a bit of evidence that suggests that when the economy has slowed and running under the caution flag, low cap-gain rates extend the number of laps it takes for the green flag to re-appear. The caution flag has the effect of funneling capital into more safe and conservative sectors, sucking the vitality from other areas.
The is more evidence to suggest that low cap-gain rates are more useful when employed under the green flag. In a dynamic and vibrant economy, investors are willing to take more risks. Likewise, a green flag economy has far greater range of investment options, which can have chain-reaction effect, spreading the vibrancy to an even wider range.
Unfortunately, too many people look to Solomon to find their wisdom; rather than seeking to find it for themselves.
Curmudgeoness
(18,219 posts)who seem to be the only ones who matter to most politicians these days. I have also heard both sides of that debate about the incentive to invest that will move the economy forward. I see this argument as hollow as the argument for mortgage interest deductions---that people will not buy houses if they cannot deduct the interest. I don't believe that, and I don't believe that people will stop investing in the markets if the taxes are higher----even to the same level as the taxes we pay on our blood, sweat and tears in "real jobs". People with a garage full of cash will have to do something with it, and I doubt they will be willing to bury it in the garden. Investments in the stock market and other business investments will still be a sweet deal for them.
I call bullshit on the "we have to have lower taxes on capital gains" meme.
arely staircase
(12,482 posts)it would be disrespectful to tax the men in those quiet rooms the same as you would a peasant.
TBF
(32,013 posts)the reason the rich so loved George W. Bush was the reduction of the capital gains taxes.
Here is a policy paper in which experts agree that capital gains tax cuts result in less revenue for the federal government (as opposed to the repub article that it stimulates the economy): http://www.cbpp.org/cms/index.cfm?fa=view&id=1286