Time - "What Mitt Romney Has to Lose–and Obama Has to Gain–from the ‘Buffett Rule’"

[TomCADem]

Interesting analysis of President Obama and Democrats proposal to increases taxes on the rich that is embodied as means to pay for President Obama's jobs bill. Of course, Republicans, including Romney, reject consideration of any such taxes.

http://swampland.time.com/2011/10/03/what-mitt-romney-has-to-lose-and-obama-has-to-gain-from-the-buffett-rule/

Just how much Romney pays in taxes is, for the moment, a private matter. But his income is public knowledge. In August, Romney disclosed that in 2010 he and his wife made between $1.1 million and $2.8 million in royalties, salary, speaking fees and interest, most of which was likely taxed at a marginal rate of 35%, after accounting for deductions. The Romneys made an additional $5.5 million to $37.3 million from dividends and capital gains, which is generally taxed at a much lower rate of 15%.

Calculating the Romneys’ exact tax burden is not possible from the public records because of a number of factors, like the amount of money that Romney deducted from his taxes and the length of time that he owned investments, are unknown. But ballpark estimates are possible. Assuming that Romney declared roughly the same number of deductions as others in his income level and that his dividend and capital gains income qualified for the 15% bracket, Romney would have paid roughly 14% of his gross income in taxes to the federal government in 2010 according to Bob McIntyre, who crafts tax policy at the left-leaning Citizens for Tax Justice.

People who earn as much money as Romney typically make most of it in capital gains and often deduct more than they earn in royalties, salary and interest. In other words, they never pay the 35% rate that their income would be subject to if they just got a paycheck like most Americans.

And this is exactly the dynamic that Obama and Buffett have been talking about in recent weeks: For a select group of wealthy investors, the regular income tax structure simply does not apply. (Buffett claims to pay just 17% of his net income in taxes.) It pays to be an investor in a way that it does not pay to be a high paid actor or professional sports star. If Romney made the same amount of income in 2010 as he declared, but it all came as a direct salary, McIntyre calculates that he would have paid something closer to 30% of his net income in taxes. “There is no justification for it,” Obama said in the Rose Garden. “It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million.”

[Vincardog]

1. We should eliminate all capital gains

treat all income the same and eliminate the SSI cap as well

[indepat]

2. And few seem to care how criminally wrong was the now-deified gipper's voodoo economics

that imposed the highest marginal rate on a single taxpayer when his/her taxable income exceeded some +/- $19,600? That's a microcosm of crass social criminality embedded in the tax code for most of these past 30+ years when large corporations and the uber-wealthy have been feeding fervently at the public welfare teat. :patriot: