Re: Romney's tax rate is only half as high as the middle class pays
The middle class has the same LTCG tax as the wealthy do. People who rely on their investments for income (like most older, retired people such as Romney) pay a 15% capital gains tax on the profits of their invested capital, capital that resulted from their labor which was already taxed at ordinary income
What labor did Romney do that earned the income he invested????
As far as seniors being impacted, the percentage is very, very low:
"The proportion of those with incomes under $100,000 who receive any capital gains or dividend income is quite small.
According to the Tax Policy Center, in 2005, only 12.5 percent of the households earning less than $100,000 received dividend income, and only 6.6 percent received any capital gains income.
Further, focusing on the number of households claiming capital gains and dividend income does not tell the full story; it is much more important to look at the amount of capital gains and dividend income collected by various income groups. T
ax Policy Center data for 2005 indicate that the bulk of income from dividends and capital gains flows to high-income households.
* Over half — 54 percent — of all capital gains and dividend income flows to the 0.2 percent of households with annual incomes over $1 million. More than three-quarters — 78 percent — of this income goes to those households with income over $200,000, which account for about 3 percent of all households.
* In contrast, only 11 percent of capital gains and dividend income goes to the 86 percent of households with incomes of less than $100,000. Only 4 percent of this income flows to the 64 percent of households that have income of less than $50,000.
Not only is income from capital gains and dividends heavily concentrated at the top of the income spectrum, but it also represents a larger portion of income for these very well-off households than it does for those of more modest means. New IRS income tax data for 2003 show that income from capital gains and dividends increases steadily as a percentage of total income as household income rises (see Figure 1).
For those making less than $100,000, capital gains and dividend income makes up an average of 1.4 percent of total income. For those making over $100,000, this income accounts for 12.2 percent of total income on average; for those making over $1 million, the share rises to an average of 31.4 percent. Thus, the IRS data show that while capital gains and dividend income accounts for nearly one-third of all income for millionaires, it represents a tiny fraction of income for most families."
Capital Gains and Dividend Tax Cuts — Center on Budget and Policy Priorities
So tell me the impact a 5% increase would have on the average 1.4% of income from investments by those who make less than $100,000???