Tuesday, January 24, 2012

Mitt Romney Is . . .

After Mitt Romney released his 2010 and 2011 Tax returns I couldn't resist doing a little digging to see where that puts him. Apparently a worth of over $30 million puts him in the top 0.007% in the US. His taxes alone are more than 99.966% of people in the US make in a year.

Mitt Romney Occupy Taxes Money Income Wealth
Mitt is the 0.007%

12 comments:

Jake Shore said...

I'm sure you realize that nearly all his income comes from dividends which are taxed at 15% (capital gains). If it was earned income, he would pay the 35%. Not to mention there are probably some tax write-offs because of the millions he gives in charity and tithing.

James Wood said...

Oh, I know that the tax code is to blame for the inequality in the percentage that the wealthy pay versus what they actually pay. I just wanted to point out that the ridiculousness of someone who claims they lived on the real streets of America.

It's not bad or wrong for Romney to have money. It's just stupid of him to try and pretend that he's a regular guy. I would have more respect for him if he would sack up and just be who he is: a rich guy who made his money through investments.

Mostly I'm pissed at our tax code that gives a 20% break to someone who's fortunate enough to have their income come through investments (which happens to be the wealthy, which happens to be the people who can donate to politics in large sums and fund lobby groups).

I think Romney avoiding releasing his taxes for this very reason. It shows how far away he is from the average American, which wouldn't be too bad in a booming economy, but with the bitterness simmering in this country around the Occupy and Tea Party movements, Romney probably just killed his campaign.

Jake Shore said...

I watched that clip, and I don't think he was trying to say he's some working class hero. He was contrasting himself with Newt Gingrich, who has spent pretty much his entire career in government, whereas he has been out there in the market taking risks in the real world, not insulated by government (no I don't think even Bain Capital is big enough to get bailed out).

I will grant you it's definitely clumsy. Romney is clearly uncomfortable with his wealth in this campaign, and it shows. But given virulent anti-capitalist, anti-rich, class envy rhetoric that's being peddled by the Occupy movement, the President, the Democratic Party, and now the Republican Party, can you blame him for trying not knowing how to best handle this?

I would agree that he should just own it, be transparent, and that he should have released his tax info right out of the gate.

I don't have a problem with the Capital gains rate. It's not just rich people, it's regular folks with investments, IRAs, and other retirement plans.

Even with difference in rates vs. what is actually paid, the rich still pay, contrary to popular belief, more than their fair share. According to the nonpartisan Tax Policy Center:

-The top 1% of all taxpayers earned 20% of all adjusted gross income and paid 38% of all income taxes at an average tax rate of 23.27%.

-The top 5% earned a total of 35% of the total adjusted gross income and paid 59% of all income taxes at an average tax rate of 20.7%.

Having said all that, I think you're absolutely right. The tax code is a stupid, incomprehensible mess. They should scrap it, simplify it and eliminate ALL special exemptions and loopholes that allow some wealthy people and corporations (GE anyone?) to avoid paying their fair share. That's the way to raise revenues without hurting the economy, which is what the President' own deficit commission (Simpson-Bowles) recommended. I would make an exception on the home mortgage deduction (only for the first two homes, though), and charitable giving.

Ty said...

I get you point, Jake, but I think one element was left out. The infrastructure of the American economy provided the fertile ground for the investments of the ultra rich. They, more than anyone, have been able to exploit this fertile ground, and it is fair to ask them to pay more. Remember that before WWII the rich had to pay almost 60% in taxes, Regan reformed that to 39% (if memory serves), Clinton kept Regan rates, and bush cut it by 4%. Historically, taxation on the rich has never been lower (and job creation has seldom been slower).

When you are part of a system on which you rely for so much, it is your job as one of the people who has the most, to sacrifice the most when there is a crisis. Let's stop talking about fairness and talk about responsibility. The richest class had a chance to pitch in by creating jobs, few even tried, now our desperation increases, and yet they, statistically, continue to hoard wealth. When people do not do by choice what the health of their country demands, the choice must be taken away before the system fails. We are close to system failure.

Mick Wright said...

Investments are taxed at a lower rate because they are returns on income that has already been taxed, both by the person investing it and by the corporation being invested in. They are also taxed at a lower rate to encourage investment, providing an incentive for people with money to use it to help companies expand and grow. They are also taxed at a lower rate because the investor takes a risk in doing so -- there is no guarantee of a positive return. And that is what Romney means when he said he's lived and worked in the real world, the world that pays taxes, and taxes risks in the real economy. We all benefit from the people who do that for two reasons: 1. the economy grows, and 2. the government earns revenue from that activity.

James Wood said...

I understand the tax code. What I don't get is why we keep using such a broken system. Romney and other investors don't create jobs and they don't help the economy, at least not on purpose. That may be a side effect of their investing, but it's not the goal. And, when the investing is in the bet the a company will fail, they actually benefit from the economy getting worse and people losing their jobs. A company with a good stock value is, in no way, equal to a company that creates jobs and is good for the economy. Often the pressure to perform for investors drives companies to eschew their values, cut jobs and hurt the economy of the country.

I think we need to get rid of tax on all forms of income and just have a national sales tax. That's the only fair system I can imagine that taxes both individuals and companies and doesn't allow for tax loopholes while encouraging saving and investment.

Jake Shore said...

Ty, you said, "The infrastructure of the American economy provided the fertile ground for the investments of the ultra rich. They, more than anyone, have been able to exploit this fertile ground."

I have no idea what that means.

As far as tax rates, during the Eisenhower administration the top federal income tax rate was about 90%. Problem is, there was no increase in revenue. Why? Because no one actually paid that rate. Because the rich know how to move their money around and shelter it. High tax rates, combined with a ridiculous tax code with all manner of exemptions and loopholes encourages this behavior.

Reagan actually lowered the top income tax to 28%. It was raised slightly later in his administration, raised again under Bush I, and raised to 39% under Clinton. Then it was cut to 35% under Bush II. So your statement about taxes has never been lower for the rich is not accurate.

But since you associated low tax rates on the rich to the lethargic economy, would you mind explaining to me, exactly, how raising tax rates on the rich would create jobs?

And when you say:

"Let's stop talking about fairness and talk about responsibility. The richest class had a chance to pitch in by creating jobs, few even tried, now our desperation increases, and yet they, statistically, continue to hoard wealth. When people do not do by choice what the health of their country demands, the choice must be taken away before the system fails. We are close to system failure"

So what you're saying is that their money doesn't really belong to them. And that the government has the right to take it away. Are you kidding me? The rich are paying an increasing proportion of taxes because less people on the bottom are paying taxes at all. One of the dirty little secrets of the evil Bush tax cuts (which were across the board, not just for the rich) is that about 10 million people were taken off the tax rolls.

On August 8th of last year, the New York Times acknowledged that "Letting all of the cuts expire at the end of 2012 would save $3.8 trillion over the next decade. Letting the tax cuts expire for those making more than $250,000 would save $700 billion."

In other words, 82 percent of Bush tax relief goes to households earning below $250,000, benefiting the middle class, and poor families who got dropped from tax rolls altogether. Which is why my tax refund is everything I paid in taxes plus a whole lot more. So the government feels that not only should I pay no taxes, but I should receive a subsidy (from other taxpayers) for no reason. Don't get me wrong. I'm happy to get the check, but is that fair or responsible?

James Wood said...

I'm bringing this over from the Facebook conversation on the same topic:

I learned, through some additional research, that Romney's income is from work, not investments. He's making money as an investment banker, so he takes the investments of other people (who were likely taxed at the 35% on their income) and then manages those investments for a fee. That fee is paid through a percentage of the profit on the investments (usually 20%), but because it's money from the sale of investments it's only taxed at the capital gains rate, even though that's the money paid for Romney doing his job.

In 2007 a bill was before congress to change this loophole, and increase the tax rate for investment bankers to that of actual income (35%). An onslaught of lobbying helped to defeat the bill. One of the lobby groups was that of Bain Capital, the company Romney founded.

So, according to Romney, it's not right that there are Americans who pay nothing in taxes. That tax code needs to be changed, but when asked about his own tax burden he says that he's only paying what's legally required (laws which he helped to shape through lobbying) and it would be unwise for him to pay more.

Sources: http://www.npr.org/2012/01/24/145759842/a-few-questions-answers-about-mitt-romneys-taxes

http://goo.gl/UQLHg

Jake Shore said...

Here's what I don't get James. On your Facebook post for this blog, you responded to Mike Lewis' charge that you were engaging in class warfare by saying you were just joking. Can you really say that honestly based on your last two remarks on this blog? I mean, come on. It sounds like you're pulling the Jon Stewart "I'm just a comedian" line. It seems pretty clear based on your repeated swipes at Mr. Romney that you are recycling the meme being advanced by the media and the Left, that Mitt Romney is the poster child for what's wrong with the tax system, and the face of income inequality in America. Nevermind there are FAR more egregious examples of both problems.

Am I not being fair? You contend (based on your resear- er..uh..joking) that Romney isn't paying what he ought to in taxes, based on some loophole. How come it took Mitt Romney for you to dig for this injustice in our tax code? Why do you and the media insist on singling Romney and Bain Capital for doing what tens of thousands (?) of investors do every day. Why the fixation on his tax returns? I don't recall the media pouring through every line John Kerry's tax records and making them front page news. Why not mention that in addition to the $6.2 million he paid in taxes, Romney gave away $7 million. Did that not fit the narrative of the evil vulture capitalist you have consistently supported in recent days?

"So, according to Romney, it's not right that there are Americans who pay nothing in taxes. That tax code needs to be changed, but when asked about his own tax burden he says that he's only paying what's legally required (laws which he helped to shape through lobbying) and it would be unwise for him to pay more."

You just connected three claims and/or statements to Romney without attribution, and that I cannot find anywhere.

If you were a big government liberal, I wouldn't waste my breath. But James, you have described yourself as a fiscal conservative more than once. What perplexes me is that in light of that claim, you consistently use social media to attack conservatives and disseminate media that attacks or mocks conservatives, who are only ones advocating fiscal constraint, while nary a word about the President and his party's out of control, irresponsible spending or his refusal to face the issue of our time, which is debt and the looming crisis over entitlements.

Like I said, I just don't get it.

Jake Shore said...

As to your former comment, James, your characterization of venture capitalists is not only wrong, it's harmful.

Creating jobs is not the goal of ANY corporation or small business. That is a fallacious standard. It's to make a profit. And there's NOTHING wrong with that! It's not evil. If I start a small business, I'm not doing it to create jobs, I'm doing it make a buck. Job creation is a positive consequence of that enterprise. This idea that jobs are a human right, or the only valid reason for owning or creating a business is destructive and false.

Someone close to me is an executive officer of a venture company. They depend on venture capital. There is no scenario in which the failure of the company helps the investors. Recently, the lead investor in this company became entangled in some legal issues that prevented them (against their will) from continued support. They've lost hundreds of thousands of dollars. When that happened, the company had to lay off or furlough more than three quarters of its employees. The executive officers, with decades of expertise, experience and education (and six-figure salaries) worked for minimum wage for months while they tried to find new investors. Fortunately they did, and they have hired everyone back who didn't get another permanent job. Now they are thriving and growing.

Thank you venture capitalists.

As I understand it, many, if not the majority of companies that Bain Capital invested in, were struggling or failing companies, some in danger of bankruptcy. In order to turn a profit again, they had to reduce costs, which included laying off employees. Some of those companies, once they were profitable again, were able to grow and hire again. What is the alternative James? Let them fail? Keep everyone on and go out of business, negating any chance of saving the company? What if there were no venture capitalists? Would we be better off? The preferred and desired outcome for any investor is the success and growth of a company, not its failure.

The problem right now isn't Mitt Romney, venture capitalists or the rich. The problem is this sick, misguided obsession with the wealth of others. There is not a finite amount of money or wealth. That notion assumes that anyone who becomes rich got that way by taking from someone else. You'll pardon me, but that's b.s.. And it's harmful. Wealth is created. Those who are trying to get rich aren't trying take a bigger piece of the pie. They're trying to bake a bigger pie.

Some will call this fixation "social justice," which is a worthy cause, and although I disagree with some of it's current manifestations, I do believe it is natural outgrowth of our Christian faith. But much of what is called social justice today has transformed into envy. And envy is evil. It pits people against one another and it creates a victim mentality that prevents people to from taking responsibility for themselves and achieving their full potential.

How would taxing the rich more, or taking away their wealth, help you? Or anyone?

James, I served four years honorably in the Marine Corps, I have worked to help abused and neglected kids, and I currently teach special needs kids. And I believe Mitt Romney, through his pursuit of profit and self interest, and by virtue of his wealth creation, job creation, charitable giving and tithing has done far more good for his community and for America, than me.

James Wood said...

Good points, Jake.

First, let me gather up those attributions. I'm sorry I didn't get them earlier.

“I pay all the taxes that are legally required and not a dollar more. I don’t think you want someone as the candidate for president who pays more taxes than he owes.” ~M. Romney
From The Washington Post

Bain Capital is among the firms that paid lobbyist to oppose tax increases (NY Times), which includes a bill that would have sent the hedge fund manager rate from 15% to 35%, proposed by Republicans (CNN Money).

Mitt said "Forty-seven percent of Americans pay nothing in income taxes, that's a heck of a big number." (October 10, 2011) (I wish I could find a better source, but it'll just have to be The Daily Show at 6:13 in the video.)

You're right and bring up a good critique of me. It's not fair of me to claim I'm joking and then get hyper-pointed and political. The picture started as a joke and then, as I started doing more research, I got more and more frustrated with what I found. Mitt is far from being the only one who epitomizes what's wrong with our tax code. Warren Buffet (mentioned in the State of the Union) is also paying far too little in taxes.

You also bring up a fair critique of my comments lately. I have been critiquing the Republicans more than the Democrats. I will point out that not long ago you and I had a discussion about Ron Paul, who could never be considered "a big government liberal."

As for the conversation about venture capitalists, which is you're responding to my response to a previous response ("I'm the dude, playing the dude, disguised as another dude!"). Let me untangle that a bit. To my original post about Romney's low rate one of the defenses given was that by making money, Romney and others like him create jobs and help the economy. I wanted to point out that there is no, direct causal effect between investment and job creation. I'm not saying that creating jobs is the only important thing in the world (though the SOTU made it seem so), just responding to that comment.

James Wood said...

To respond to your comments on venture capitalists, no doubt there are good people doing good work that benefits individuals and the economy as a whole. I also have no doubt that there are predatory venture capitalists that look for ways to turn a quick buck at the expense of the companies in which they invest. Likely the average is somewhere in the middle. But the mark of success for a VC firm isn't the number of companies they save or jobs they restore, but the number of dollars they make for themselves. It is not a direct relationship between VC success and economic growth, though there may be a correlation at times, it's also possible for there to be an inverse relationship. In the end, I don't want to get rid of VC firms. I think they perform a needed service, sort of like the triage on a battlefield. They help the wounded to live or die as necessary.

You're dead on target when you say that,

"The problem right now isn't Mitt Romney, venture capitalists or the rich. The problem is this sick, misguided obsession with the wealth of others."

This is true on both sides of the political spectrum. Liberals need to stop trying to take from the rich and give to the poor and Conservatives need to stop trying to take from the poor and give to the rich. It's not fair that the wealthiest in this country pay so little in taxes, nor is it fair that the poorest pay little or nothing in taxes. If we are a country, united and together, we ought to all pay our share.

We should tax everyone less and have a smaller government. But everyone should be taxed equally. No loopholes for how you earn your money or where you bank or where you buy your stuff. I'm willing to give up my tiny tax burden for the sake of the country, it will be good for the economy, good for jobs and just the right thing to do.

Thank you, discussing with you is good for my brain. This is the first comment I've had to split in twain for being too big for blogger.