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Romney reveals he pays about 15% in taxes(edited)

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Re: Romney's tax rate is only half as high as the middle class pays

Catawba said:
This is only an issue for those who make most of their income from investments as Romney did. They are the ones that enjoy a lower tax rate than the middle class.
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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
 
Re: Romney's tax rate is only half as high as the middle class pays

haymarket said:
Money he grew on the money tree in the back yard. Who cares? Money is money - income is income. I don't care where it comes from and neither should the government.
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It totally matters, if it came from their own capital, that money was already taxed as income when it was earned. If the returns came from profits in a hedge fund/private equity vehicle that earns profits on investor's money than they are paying 15% tax on new, personal income.

EDIT: Why do you think the government discriminates by the source of income in the first place? Just to stick it to the little guy?
 
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Re: Romney's tax rate is only half as high as the middle class pays

Rhapsody1447 said:
It totally matters, if it came from their own capital, that money was already taxed as income when it was earned. If the returns came from profits in a hedge fund/private equity vehicle that earns profits on investor's money than they are paying 15% tax on new, personal income.

EDIT: Why do you think the government discriminates by the source of income in the first place? Just to stick it to the little guy?
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jesus. if they buy a stock at $50 and sell it at $100, they pay 15% on $50. period. it's quite simple, despite your machinations. their money is NOT being taxed twice.
 
Re: Romney's tax rate is only half as high as the middle class pays

Rhapsody1447 said:
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
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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. Tax 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???
 
That is not what he is arguing at all. The $50 that was used to buy the stock in your example was (probably), income at one point. This income was taxed, regardless of whether it was the %15 or the normal income tax. It is not really a second tax. However, it is income earned from money that was already taxed. Romney could have chosen to spend his money and pay no taxes (beyond sales). Instead, he chose to earn money from it. Anyone can do this, and it helps middle class people saving for retirement just as much as rich folks like Romney. I guarantee most elderly people pay a very similar rate in taxes.

Secondly, people often confuse marginal and effective tax rates. 15% effective tax is still higher than most Americans (like a huge majority), if you don't count Social Security, etc.
 
astein said:
That is not what he is arguing at all. The $50 that was used to buy the stock in your example was (probably), income at one point. This income was taxed, regardless of whether it was the %15 or the normal income tax. It is not really a second tax. However, it is income earned from money that was already taxed. Romney could have chosen to spend his money and pay no taxes (beyond sales). Instead, he chose to earn money from it. Anyone can do this, and it helps middle class people saving for retirement just as much as rich folks like Romney. I guarantee most elderly people pay a very similar rate in taxes.

Secondly, people often confuse marginal and effective tax rates. 15% effective tax is still higher than most Americans (like a huge majority), if you don't count Social Security, etc.
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so what? who cares what generated the income. my EFFECTIVE fed tax rate is higher than 15%. my argument is that cap gains and dividends should be taxed as ordinary income.
 
liblady said:
so what? who cares what generated the income. my EFFECTIVE fed tax rate is higher than 15%. my argument is that cap gains and dividends should be taxed as ordinary income.
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It's sad that we've dumbed down. I keep hoping that someday we'll hit bottom. Imagine what would happen to investment. Truly sad!
 
Meathead said:
It's sad that we've dumbed down. I keep hoping that someday we'll hit bottom. Imagine what would happen to investment. Truly sad!
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perhaps you should explain. are you seriously suggesting that people will put their money in mattresses rather than have to pay more in taxes? so, if their tax increased to, say 35% on cap gains, they would stop investing? lmao, not quite. say they made 500k in cap gains, now, they would realize 425k of those gains when taxed at 15%. at 35%, they would realize 325k. they are willing to forego 325k? i think not.
 
liblady said:
perhaps you should explain. are you seriously suggesting that people will put their money in mattresses rather than have to pay more in taxes? so, if their tax increased to, say 35% on cap gains, they would stop investing? lmao, not quite. say they made 500k in cap gains, now, they would realize 425k of those gains when taxed at 15%. at 35%, they would realize 325k. they are willing to forego 325k? i think not.
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First of all, the money has already been taxed (post 351) and as investment there is no guarantee that the money will make money in the first place. Investment, to various degrees is a crap shoot. What is the incentive for people to invest knowing that if money is lost, there will be no compensation (as it should be), but if there is profit more than a third of that will be withheld for the sake of bigger government. Only a fool would put a stake in anything unless there was no chance of loss. Thus, investment would be largely limited to low-yield bonds which would deliver little in capital gains and taxes. I ain't rocket science
 
Why the super rich pay a lower tax rate ~

 
Catawba said:
Thanks for your opinion. You have anything at all to back it up???
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As far as my opinion goes, yep, I sure do. He challenges Congress to contribute to the U.S. Treasury...says he'll match it. He crows about how people who make over $1 million a year should pay more taxes. If he really wanted to make a difference, he'd be the world's strongest advocate for tax reform -- not simply raising rates.

Oh, and let's not forget that the third-richest man in the world takes a salary of only $100,000 in order to minimize his taxes.
 
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Meathead said:
First of all, the money has already been taxed (post 351) and as investment there is no guarantee that the money will make money in the first place. Investment, to various degrees is a crap shoot. What is the incentive for people to invest knowing that if money is lost, there will be no compensation (as it should be), but if there is profit more than a third of that will be withheld for the sake of bigger government. Only a fool would put a stake in anything unless there was no chance of loss. Thus, investment would be largely limited to low-yield bonds which would deliver little in capital gains and taxes. I ain't rocket science
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You do realize that for most of the last 100 years the max LTCG rate was closer to 30% than 15%, right? It's been as high as 39.9% ... under Ronald Reagan. It didn't seem to destroy the economy.
 
MaggieD said:
As far as my opinion goes, yep, I sure do. He challenges Congress to contribute to the U.S. Treasury...says he'll match it. He crows about how people who make over $1 million a year should pay more taxes. If he really wanted to make a difference, he'd be the world's strongest advocate for tax reform -- not simply raising rates.

Oh, and let's not forget that the third-richest man in the world takes a salary of only $100,000 in order to minimize his taxes.
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Just because you disagree with his opinion on tax policy doesn't make him a hypocrite. :roll:
 
AdamT said:
Just because you disagree with his opinion on tax policy doesn't make him a hypocrite. :roll:
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It's not because I disagree with him. For the most part, I don't. But he doesn't go far enough. His play to Congress is simply grandstanding. There he sits taking a mere $100,000 in salary in order to avoid the tax consequences of salary v capital gains while at the same time berating Congress for not raising taxes on the rich. When you take advantage of legal loopholes, and then put yourself out there as such an advocate for higher taxes, that, to me, is hypocritical.
 
MaggieD said:
It's not because I disagree with him. For the most part, I don't. But he doesn't go far enough. His play to Congress is simply grandstanding. There he sits taking a mere $100,000 in salary in order to avoid the tax consequences of salary v capital gains while at the same time berating Congress for not raising taxes on the rich. When you take advantage of legal loopholes, and then put yourself out there as such an advocate for higher taxes, that, to me, is hypocritical.
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Seems to me you're just assuming that the purpose behind the low salary is tax avoidance. Do you think there might also be a business purpose that benefits his company? Would it help their bottom line if they paid him $62 million in cash?
 
AdamT said:
Seems to me you're just assuming that the purpose behind the low salary is tax avoidance. Do you think there might also be a business purpose that benefits his company? Would it help their bottom line if they paid him $62 million in cash?
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You may give him that benefit of the doubt, I don't. I hardly think paying him an average CEO's salary (Fortune 500 companies) of $11 million a year would put even a tiny ding in Berkshire Hathaway. They spent $900 million in advertising for their GEICO brand alone.

Here's How GEICO Makes Berkshire Hathaway Money - Business Insider
 
So he admits to paying 15% on money he invested that he was already taxed 30% on?
 
MaggieD said:
As far as my opinion goes, yep, I sure do. He challenges Congress to contribute to the U.S. Treasury...says he'll match it. He crows about how people who make over $1 million a year should pay more taxes. If he really wanted to make a difference, he'd be the world's strongest advocate for tax reform -- not simply raising rates.

Oh, and let's not forget that the third-richest man in the world takes a salary of only $100,000 in order to minimize his taxes.
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and Buffett wants not just the uber rich (the ones where their effective tax rates are actually lower than the semi-rich) but the upper middle class on up to pay more taxes. he wants people who have estates of a few million to be zapped by the death tax and those making a few hundred k to a few million to pay much more taxes.
 
Re: Romney's tax rate is only half as high as the middle class pays

Rhapsody1447 said:
It totally matters, if it came from their own capital, that money was already taxed as income when it was earned. If the returns came from profits in a hedge fund/private equity vehicle that earns profits on investor's money than they are paying 15% tax on new, personal income.

EDIT: Why do you think the government discriminates by the source of income in the first place? Just to stick it to the little guy?
Click to expand...

WRONG.

He is NOT being taxed on the principal amount which was invested upon which he already paid tax. He is only taxed on the gains from the investment. That is a completely different amount of money over and above what he previously had and was taxed upon.

Why do I think the rates are discriminatory? I think a great deal of it has to do with the Golden Rule.
 
Re: Romney's tax rate is only half as high as the middle class pays

haymarket said:
WRONG.

He is NOT being taxed on the principal amount which was invested upon which he already paid tax. He is only taxed on the gains from the investment. That is a completely different amount of money over and above what he previously had and was taxed upon.
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Of course. The double taxation argument is silly. It's not like there's a block of money out that there that has a boolean taxed/not-taxed switch. If you earn money in your job, that money is taxed. If you take your after tax income and use it to start another business, it doesn't mean that your business doesn't then have to pay taxes just because you paid taxes on the start up capital.
 
Re: Romney's tax rate is only half as high as the middle class pays

haymarket said:
WRONG.

He is NOT being taxed on the principal amount which was invested upon which he already paid tax. He is only taxed on the gains from the investment. That is a completely different amount of money over and above what he previously had and was taxed upon.

Why do I think the rates are discriminatory? I think a great deal of it has to do with the Golden Rule.
Click to expand...
That's correct, after all it's called a capital gains tax. When you buy an asset for $x and sell it for $y you pay the tax on $y-$x.
 
Re: Romney's tax rate is only half as high as the middle class pays

Of the 1%, by the 1%, for the 1%

"Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret."

"It’s no use pretending that what has obviously happened has not in fact happened. The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent. One response might be to celebrate the ingenuity and drive that brought good fortune to these people, and to contend that a rising tide lifts all boats. That response would be misguided. While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees, the decline has been precipitous—12 percent in the last quarter-century alone. All the growth in recent decades—and more—has gone to those at the top. In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran. While many of the old centers of inequality in Latin America, such as Brazil, have been striving in recent years, rather successfully, to improve the plight of the poor and reduce gaps in income, America has allowed inequality to grow."

Of the 1%, by the 1%, for the 1% | Society | Vanity Fair
 
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