Romney pays 15% taxes

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  • #1
I'm not blaming him personally, so please don't take it that way. Most people are going to pay what they have to pay. What I blame is our tax code that allows for too many deductions.
In 2010 Romney paid 13.9% taxes. In 2011 he expects to pay 15.4%

http://www.rocketnews.com/2012/01/wealthy-romney-pays-13-9-tax/
 

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  • #2
I pay more then this percentage wise. I am certainly no millionaire. I think it makes the point that we don't need to lower taxes on the rich, unless a lot of loopholes are going to be cut out.
 
  • #3
Ryan_m_b
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This is due to the majority of Romney's (and most million/billionaires for who a low percentage of tax is paid) income coming from capital gains which are taxed differently to wage.
 
  • #4
obafgkmrns
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I pay more then this percentage wise. I am certainly no millionaire. I think it makes the point that we don't need to lower taxes on the rich, unless a lot of loopholes are going to be cut out.

Romney gave 14% of his income to charity in 2010, and the 2011 estimate is 19%. Seems generous enough to me.
 
  • #5
phoenix:\\
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I wouldn't consider investing in a church whose sole purpose is to grow itself and convert more followers as "giving to charity". Looks like Mitt has gotten richer over the past few years though.
 
  • #7
phyzguy
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This is due to the majority of Romney's (and most million/billionaires for who a low percentage of tax is paid) income coming from capital gains which are taxed differently to wage.

We understand that this is what it is due to. The question is, does this make sense, or should the tax code be changed? I think it should be changed, and many people agree.
 
  • #8
You do realize that all the money he had to invest was already Taxed once when he made it originally right?

Why should money you willing risk investing in a company and helping it succeed be treated the same as Money directly earned and paid with no risk?

Do you want your retirement Taxed the same way as your income? (401k Not garunteed pensions)


When you make income the only one who benfits directly is you when you make an investment many benefit across the entire market from shareholders to employees to Traders.

Even if you loose it all the net gain for the entire economy still exists simply by using the money.

I hate deductions and wish we could strip them to a few simple things but capital gains tax is fine where it is and inheritance tax needs reduced/eliminated or made dare I say it Progressive.

His tax rate would be the same if it all sat in a bank and got minimal return but then nobody else would gain anything I for one am glad people invest in the market. They help all of our small time investments pay off better.

When one of you starts paying more then you need to in taxes intentionally let me know.
 
  • #9
obafgkmrns
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Yeah, $2.6 million a year to the Mormon church, which is tax deductable and lowered his overall taxes.


I take it that you object to church contributions. If you actually believe the Government should receive that cash, run for office and get the law changed.
 
  • #10
Ryan_m_b
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You do realize that all the money he had to invest was already Taxed once when he made it originally right?

Why should money you willing risk investing in a company and helping it succeed be treated the same as Money directly earned and paid with no risk?

Do you want your retirement Taxed the same way as your income? (401k Not garunteed pensions)
Capital gains are taxed but not in the same bracket as earnings. I don't see why the fact that one gets taxed on an income, invests it and then makes a return is an argument against taxing the return.

An important part of the argument against this sort of thing is that it ends up with the richest in society paying proportionally less tax than those at the bottom on all of their money coming in which many would say is not a fair system.
 
  • #11
Char. Limit
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Hey look, another thread about taxes.
 
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  • #12
turbo
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I take it that you object to church contributions. If you actually believe the Government should receive that cash, run for office and get the law changed.
Evo has a point. If Romney reduced his tax-burden by making tax-deductible contributions to the Mormons, he has foisted off the deduction on all the rest of us taxpayers.

If we truly have a "separation of church and state", then why do donors' income taxes (a governmental function) get reduced by making donations to churches? Why should my tax-burden go up so some fat-cat can reduce his taxes by making a donation to a church? Doesn't seem right.
 
  • #13
lisab
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Romney gave 14% of his income to charity in 2010, and the 2011 estimate is 19%. Seems generous enough to me.

Mormons are "asked" to give 10% of their income to the church (tithe). I don't know how the church defines income (are capital gains included?).

But yes, it is generous. I'd like to think most people with that much wealth would do the same. I'd also like to believe in world peace and fairies.
 
  • #14
Evo
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And while most people pay social security and medicare taxes on 100% of their income, none of his capital gains income are taxed and won't be until the new tax law goes into effect in 2013.

His tax rate would be the same if it all sat in a bank and got minimal return but then nobody else would gain anything I for one am glad people invest in the market. They help all of our small time investments pay off better.

And you don't realize that money you have in the bank is invested by the bank?
 
  • #15
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Evo has a point. If Romney reduced his tax-burden by making tax-deductible contributions to the Mormons, he has foisted off the deduction on all the rest of us taxpayers.

If we truly have a "separation of church and state", then why do donors' income taxes (a governmental function) get reduced by making donations to churches? Why should my tax-burden go up so some fat-cat can reduce his taxes by making a donation to a church? Doesn't seem right.

If he had contributed it to Planned Parenthood (he probably wouldn't, but bear with me), then he has foisted off the deduction to us taxpayers. If he had contributed it to Amnesty International, same thing. Who he contributes it to is irrelevant, since, invariably, any deduction is because of some charitable organization that someone, somewhere, doesn't like or agree with. Now, if your argument is that charitable contributions shouldn't be deductible, that's another matter entirely, though I would argue that even those serve a function. I regularly give to the Unitarian Universalist Service Committee which utilizes that money for secular/humanist needs.
 
  • #16
obafgkmrns
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Capital gains are taxed but not in the same bracket as earnings. I don't see why the fact that one gets taxed on an income, invests it and then makes a return is an argument against taxing the return.

When you make an investment, you take on a risk of losing every penny of it. Under U.S. tax code, you can deduct only $3,000 per year of such losses, making large investments rather hazardous. Taxing capital gains at a lower rate than ordinary income somewhat ameliorates that hazard and encourages investment. If capital gains were taxed at the same rate, people would tend to park their cash in high quality municipal bonds or overseas in more favorable tax environments, and the economy would grind to a halt.
 
  • #17
turbo
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My wife and I regularly donate to the Salvation Army for disaster relief (among other things), but we don't make enough income or have enough deductions to make itemizing an option. The donations come out of our pockets. Same with donations to the American Lung Association, NWF, WWF, ASPCA, etc. It all adds up, but it's not enough to justify itemizing deductions, even during the Haiti disaster and aftermath.

I'm all for people donating money to good causes - just as long as I'm not forced to pay for their "generosity" in the form of higher taxes for my wife and me.
 
  • #18
Evo
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I take it that you object to church contributions.
Giving to a church that will grow rich off of most of it as opposed to giving to a charity that will use most of it for work that benefits society, yeah, I guess I don't consider giving money to super wealthy churches the same as giving to charity.

If you actually believe the Government should receive that cash, run for office and get the law changed.
Why do you think we vote for people instead of running for office? :uhh:
 
  • #19
Pengwuino
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An important part of the argument against this sort of thing is that it ends up with the richest in society paying proportionally less tax than those at the bottom on all of their money coming in which many would say is not a fair system.

The people at the bottom, as shown many times on this forum, pay next to nothing in federal taxes.

I find capital gains taxing a little stupid to be honest. It's money already taxed, it goes back out into the world to hopefully create some jobs by investment, comes back, gets re-taxed, goes back out, gets re-taxed, over and over and over. Hell, assuming these are long-term capital gains taxes, all these investments were something we should be praising in our society - long term investments, not day trading nonsense.
 
  • #20
Evo
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I find capital gains taxing a little stupid to be honest. It's money already taxed, it goes back out into the world to hopefully create some jobs by investment, comes back, gets re-taxed, goes back out, gets re-taxed, over and over and over. Hell, assuming these are long-term capital gains taxes, all these investments were something we should be praising in our society - long term investments, not day trading nonsense.
well, except that the bulk of his investments are in tax free Cayman Islands.

WHAT ABOUT GIFT TAXES?

Romney has a $100 million trust set up for his five sons. The campaign said the Romneys paid no gift taxes on the trust because they were able to use credits related to estate tax.

OFFSHORE INCOME

Romney's investment funds run through Bain are in offshore tax havens such as the Cayman Islands, a practice the campaign insists is legal and common but that has come under some criticism during the campaign.

Some of these investments also are held through two Individual Retirement Accounts and investing IRAs offshore can eliminate all taxes until withdrawals are made.

http://nbcpolitics.msnbc.msn.com/_news/2012/01/24/10222105-q-a-what-romneys-tax-returns-reveal-and-omit [Broken]

This isn't about risk taking or investing in US companies and stimulating the economy as some people in this thread have suggested, it's about tax shelters. I want to remind members that making false claims is a violation of the rules. In other words, before you make a claim, reasearch it and post a valid source.

WHAT ABOUT ROMNEY'S PRIVATE EQUITY PROFITS?

Much of Romney's fortune likely qualifies as what is known as "carried interest," a share of profits earned by private equity managers taxed at the 15 percent capital gains tax rate rather than the maximum 35 percent wage rate. Private equity managers, some hedge fund executives and venture capitalists benefit from carried interest.

Campaign officials said Romney had carried interest of $7.4 million in 2010 and $5.5 million in 2011.

Critics say the 15 percent rate for carried interest is an unfair tax break because investment managers, as Romney was, are providing a service that should be taxed at the higher rate paid by wage earners.
 
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  • #21
Pengwuino
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well, except that the bulk of his investments are in tax free Cayman Islands

That's always been a fishy area, but I still find capital gains taxation to be stupid.
 
  • #22
Evo
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That's always been a fishy area, but I still find capital gains taxation to be stupid.
Yeah, but this is about Romney, not the average American.

And to members, let's not go off topic into a discussion of taxes unless it is about Romney.

And everyone needs to read the P&WA rules, which aren't being followed here by some members (not you Peng).
 
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  • #23
turbo
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Romney should pay income taxes like the rest of use, regardless of how the income is derived. I'm all for a reduced-rate on capital gains, but only if the investment is held for a significant length of time, on a par with the length of time that normal Americans have to hold Savings Bonds.
 
  • #24
obafgkmrns
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Yeah, but this is about Romney, not the average American.

And to members, let's not go off topic into a discussion of taxes unless it is about Romney.

And everyone needs to read the P&WA rules, which aren't being followed here by some members (not you Peng).

Sounds like your actual pique is that Romney's rich, you're not, and you want the Government to rectify the situation.
 
  • #25
Char. Limit
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Sounds like your actual pique is that Romney's rich, you're not, and you want the Government to rectify the situation.

Uh-huh. You're going to need a lot more evidence than that for your so-called "argument" to fly.
 
  • #26
Evo
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Sounds like your actual pique is that Romney's rich, you're not, and you want the Government to rectify the situation.
I haven't said anything like that. Not even a good attempt at a strawman fallacy based on what you quoted.
 
  • #27
russ_watters
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Evo has a point. If Romney reduced his tax-burden by making tax-deductible contributions to the Mormons, he has foisted off the deduction on all the rest of us taxpayers.

If we truly have a "separation of church and state", then why do donors' income taxes (a governmental function) get reduced by making donations to churches? Why should my tax-burden go up so some fat-cat can reduce his taxes by making a donation to a church? Doesn't seem right.
I don't think you really want to go down either of those roads, turbo:

First, if you're worried about people reducing their taxes via deductions increasing the burden on the rest, then you bring into play the 47% who bring their burden down to zero via deductions.

Second, this has nothing to do with separation of church and state. Romney's individual charity choice is his, not the government's.
 
  • #28
russ_watters
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I am in favor of closing this loophole for the rich (working age people who derive their income from capital gains), but don't trust liberals at all on the issue. Getting a clear definition of "rich" is like nailing jello to a wall: the 99% is the new buzzword, but I've never seen a tax proposal that didn't reach much further down in defining the "rich".
 
  • #29
And while most people pay social security and medicare taxes on 100% of their income, none of his capital gains income are taxed and won't be until the new tax law goes into effect in 2013.

Most people pay SS and Medicare taxes on 100% of their income because those are systems that are supposed to be what you pay in, you get paid out. If they did this for very high incomes, then you'd get people who don't need SS or Medicare getting very large SS and Medicare payments, which wouldn't be too popular. If one makes the high-earners pay into SS and Medicare while putting a cap on how much in benefits they receive, then SS and Medicare become a de-facto welfare program, which opens up a whole other can of worms.

Giving to a church that will grow rich off of most of it as opposed to giving to a charity that will use most of it for work that benefits society, yeah, I guess I don't consider giving money to super wealthy churches the same as giving to charity.

Isn't this over-generalizing though Evo? There are churches out there that use their donations to help the community and there are also some very rich, very money-grubbing charities out there. A lot of the money many charities raise gets poured into raising more money, not into helping anybody. The big charities have investment funds, engage in extensive marketing/campaigning/fundraising, and hire top-of-the-line CEOs to run them. For many charities, the goal is not to help anyone anymore but rather to self-perpetuate the charity.
 
  • #30
rcgldr
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And while most people pay social security and medicare taxes on 100% of their income, none of his capital gains income are taxed and won't be until the new tax law goes into effect in 2013.
Also there's a cap on social security, once you make a bit over $106,000 (USA), you stop paying any FICA (social security) taxes, a regressive tax bracket that goes from 6.25% (now 4.25% with tax cut) to 0%. Eliminating the FICA cap would greatly help the social security system from going bankrupt.

capital gains
Other than IPOs, most of the money invested in the stock market just moves back and forth between investors. Occasionally companies will buy back their own stock to prop up stock prices; who gains when this is done? The only jobs created by most of this activity are related to the financial industry, like the brokers that make commisions off of stock trading.
 
  • #31
Evo
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Isn't this over-generalizing though Evo? There are churches out there that use their donations to help the community and there are also some very rich, very money-grubbing charities out there. A lot of the money many charities raise gets poured into raising more money, not into helping anybody. The big charities have investment funds, engage in extensive marketing/campaigning/fundraising, and hire top-of-the-line CEOs to run them. For many charities, the goal is not to help anyone anymore but rather to self-perpetuate the charity.
That's why I was specific "churches that keep most of the money" meaning most of the money they collect does not go to charitable work, and "charities that give most back to benefit society", as opposed to the ones that keep most of it. For example, a church "charity" could fall into the category of giving most back to society. I apologize if I didn't make that clear. I knew what I was thinking. :redface:
 
  • #32
That's why I was specific "churches that keep most of the money" meaning most of the money they collect does not go to charitable work, and "charities that give most back to benefit society", as opposed to the ones that keep most of it. For example, a church "charity" could fall into the category of giving most back to society. I apologize if I didn't make that clear. I knew what I was thinking. :redface:

Ahh, okay :smile:
 
  • #33
russ_watters
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Also there's a cap on social security, once you make a bit over $106,000 (USA), you stop paying any FICA (social security) taxes, a regressive tax bracket that goes from 6.25% (now 4.25% with tax cut) to 0%. Eliminating the FICA cap would greatly help the social security system from going bankrupt.
So are you in favor of completely separating the pay-in from the pay-out? I wouln't imagine SS fans would be in favor of that, since eliminating the connection means people may not get back what they pay in...

...or do you just want to do that for the rich?
 
  • #34
rcgldr
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Also there's a cap on social security, once you make a bit over $106,000 (USA), you stop paying any FICA (social security) taxes, a regressive tax bracket that goes from 6.25% (now 4.25% with tax cut) to 0%. Eliminating the FICA cap would greatly help the social security system from going bankrupt.

So are you in favor of completely separating the pay-in from the pay-out? I wouln't imagine SS fans would be in favor of that, since eliminating the connection means people may not get back what they pay in.
The study on this included two options. This is a quote from yahoo article (the orignal link is broke, but I saved the quote):

Modify the Social Security tax cap. Workers pay into the Social Security system on earnings up to $106,800 in 2010. About 83 percent of worker earnings were subject to Social Security payroll taxes in 2008. If all earned income above $106,800 annually were subject to Social Security contributions but did not count toward benefits, Social Security's projected deficit would be completely eliminated. If the higher income counted toward Social Security benefits, about 95 percent of the shortfall would be absolved. Other ideas: apply a new Social Security formula to earnings above the current cap or raise the amount of the income cap to apply to 90 percent of all worker earnings.
 
  • #35
Moonbear
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I am in favor of closing this loophole for the rich (working age people who derive their income from capital gains), but don't trust liberals at all on the issue. Getting a clear definition of "rich" is like nailing jello to a wall: the 99% is the new buzzword, but I've never seen a tax proposal that didn't reach much further down in defining the "rich".

Why specify rich? If someone isn't yet retirement age and derives income from capital gains, why should it matter how much of the rest of their income comes from other sources? I really do think it makes sense to tax all income the same, regardless of the source, but then let you apply previous losses as reductions in adjusted gross income without a cap on those either. Money changing hands is all the same to me.

As for Romney, I have no problem with him paying 15% in taxes. It's consistent with current tax law, and he's actually paying his taxes, so what more is there to expect? His 15% is still a heapload more money than probably most here even earn as gross income.
 

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