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Media Perpetuates 15% Tax Lie With Romney

From the always dependable Reuters:

Romney says he is taxed at around 15 percent rate

By Sam Youngman
January 17, 2012

MYRTLE BEACH, South Carolina (Reuters) – Republican Mitt Romney acknowledged Tuesday that his income tax rate is "probably closer to 15 percent than anything," suggesting that one of the wealthiest people to ever run for U.S. president pays a much lower rate than most Americans.

His comment, a day after Romney agreed for the first time to release his tax returns — but not until April when they are generally filed — added fuel to his Republican rivals’ calls for him to be more transparent about his finances.

It also drew fire from the Democratic White House and other critics, who said it reflected how Romney, whose estimated net worth is $270 million, is out of touch with the experiences and concerns of typical Americans.

Romney, a former private equity executive and Massachusetts governor, seemed to feed that narrative on Tuesday. He said that he gets speaker fees "from time to time, but not very much."

Annual campaign financial disclosure forms indicate that he was paid more than $374,000 in speaker fees from February 2010 to February 2011.

Romney’s estimate of his income tax rate suggested that like many of the wealthiest Americans, he could earn a large chunk of his income from investments – much of it in capital gains.

Because capital gains generally are taxed at 15 percent compared with the top income tax rate of 35 percent on ordinary wages, those with significant income from capital gains often pay lower tax rates than many Americans.

Such disparity in the rates within the U.S. tax code are a sore point for many Americans, even some of the very rich whose rates are relatively low.

Billionaire investor Warren Buffett, for example, has said he paid $6.9 million in federal income taxes on $39.8 million in taxable income in 2010, a rate of 17.4 percent. Buffett has said it’s unfair than his tax rate is lower than his secretary’s

As we have noted before, Mr. Buffett’s company Berkshire Hathaway, is still fighting their tax bill for six of the last ten tax years.

We have also noted that Mr. Buffet’s income, like Mr. Romney’s, has already been taxed once, and at the 35% rate, via the corporate income tax. So this 15% tax is on top of that 35% tax.

So, in truth, Mr. Romney could be paying a 50% tax rate on his income. But the news media and the rest of the Democrat Party will continue to pretend otherwise.

Romney has long been reluctant to raise a curtain on his vast financial holdings

In reality, releasing one’s tax returns is a relatively new tradition. It started after Watergate, when the news media realized that this was another avenue of attack against Republicans.

Even Ronald Reagan was forced to break his longstanding rule of keeping his personal finances private. He released his 23-page 1979 income tax return just weeks before accepting the GOP nomination.

And in the decades since, the tradition has been to release the records in April of the election year. (See Hillary’s above.)

In recent days, Romney’s increasingly desperate rivals – former House of Representatives Speaker Newt Gingrich and Texas Governor Rick Perry – repeatedly have questioned whether Romney, in not releasing his tax returns, is hiding something.

And thereby falling once again into the trap of class warfare and the politics of envy.

Their calls for Romney to release his returns were echoed on Tuesday in a New York Times editorial, which called Romney’s "insistence on secrecy impossible to defend now that he appears to be closing in on the nomination and questions have intensified about his personal finances."

Remember how the New York Times fulminated against Hillary Clinton for not releasing her tax returns until April of 2008? — We don’t either.

This article was posted by Steve on Wednesday, January 18th, 2012. Comments are currently closed.

16 Responses to “Media Perpetuates 15% Tax Lie With Romney”

  1. Petronius says:

    In addition to taxes on investment income (15%) and corporate taxes (35%), it must also be recognized at the outset that business profits are already restrained by competition. The role of competition is to eliminate economic unfairness by ensuring that profits will go only to those who earn them by providing the most useful products and services to the public.

    Once again Reuters trots out Warren Buffett, the so-called Sage of Omaha, as the spokesman for higher taxation of investment income. And once again Reuters fails to mention that one of the immediate results of higher taxes on investment income –– as urged by Buffett and other adherents of Liberal-Marxist ideology –– would be a collapse in the stock market and a reduction in the amount of investment capital that would be available for companies on the market.

    This reduction in investment would restrain economic growth and result in unemployment. In other words, businesses would need to eliminate marginal production and layoff employees in order to reduce costs, so that they may then begin once again to attract investment capital.

    Denied the possibility of making a reasonable profit, the investor and entrepreneur would be reluctant to assume the heavy risks which are invariably associated with hiring employees, the building of a factory, the modernizing of a plant, the expansion of production, the introduction of technological innovation, even the replacement of machinery. It takes quite a bit of courage to assume such risks in the first place. If we leave to the investor only his losses, while we continue to reduce his profits through tax increases, private investment activity will be reduced to a game in which one can only lose. The result will be stagnation and eventual bankruptcy of the company, unemployment, and poverty for all.

    Indeed, a tax policy of the kind urged by Buffett and Reuters would have a depressing effect on the entire economy, and economic stagnation and unemployment should be expected to result all along the line. Due regard for the economy’s requirements for investment capital obliges us to set limits on the extent to which taxes, wages, and other costs can be increased. This is not a peculiar feature of our quasi-capitalist economic system, but is true even in a socialist state. It is simply a fact of life.

    Of course if your goal is the destruction of capitalism and the impoverishment and proletarianization of the American people, then by all means you should raise taxes on investment activity to your heart’s content.

  2. Reality Bytes says:

    So Romney’s only half as rich as Pelosi, 1/4 as Kerry. I don’t seem to remember the same outcry.

  3. proreason says:

    In past years on S&L I ranted about John Kerry’s taxes, based on the tax return he was forced to disclose (ONE return) in the year he ran for president. I won’t go into the rant again, but what the return showed was basically that he and Theresa had claimed about 6 million in income from her billion dollar fortune, and paid something like 12% income taxes on that. I would bet my last dime that it was the absolute most thay have ever EVER paid in taxes. Note that although 6 million is a lot of income in raw numbers, it was 6/10th of 1% of her total fortune.

    What it meant is that they had essetially invested their billion dollar fortune in municipal bonds (0% tax), non income-producting real estate, or hidden or sheltered their income in other ways.

    My hunch is that Romney’s income is a lot more than 6/10th of 1% of his net worth, and that he is paying pretty close to 15% on that income which is the capital gains rate.

    In other words, Romney is probably risking a substantial portion of his fortune each year to create income and not playing the typical uber-rich tax avoidance game that almost every liberal fat-cat plays.

  4. tranquil.night says:

    In an age when politicians are making investments based on political knowledge, I’m in favor of full disclosure. I understand the unfair scrutiny it prompts and I have no reason to think Mitt’s doing anything dirty (I like Pro’s theory and think it could actually help him if he stops being so evasive and defensive about it), but hey, we rag on Turbo Tax Timmy, and we poke at Plugs Biden and the Haughty John Kerry for being total hypocrites because we see their taxes. We pile on Obama in wanting to see the college transcripts. Do we really want a political pissing match to erupt during the general over who will release their largely irrelevant documents first?

    And is the Inevitable One going to continue to let the media define this narrative or is he going to command it himself?

    Mama Bear Palin was one of the first to jump on this actually.

  5. sticks says:

    It seems a good thing for politicians to be out front about their sources of income as that might give clues as to who they are beholden to, the problem is that these things are always a one way street. In other words the spotlight is always on the Republicans especially if they are conservative, meanwhile the Democrates have their hands in all kinds of shady dealings and those stories never get told or they just go away. Remember Hillary’s
    amazing prowess in the futures market? Or Whitewatergate, and the list goes on. This is not to say that Republicans don’t also stick their hands in the cookie jar, or that we should not hold them to a high standard (we should). It just bugs me that it’s so one sided.

  6. wiseguy says:

    Sorry buds, 15% is a ridiculously low rate for these people with millions of dollars. They need to pay their fair share!! Warren Buffet is right, it is ludicrous that a secretary’s gross wage is taxed double or more that of a person with millions of dollars. You guys need to go back and study the French revolution. Finally the commoners got so upset they went ballistic and ended the existance of most of the 1 percenters. Take Romney, assuming he had to work 40 hrs a week, in a year’s time he’s making $11,500 per hour. …. fairness in taxation is what we want.

    Oh, and that baloney about the money being taxed twice by a 35% corp. tax rate, first off most corporations pay almost nothing in taxes and not anywhere near the 35% rate. Secondly us commoners are double or triple or quadruple taxed all the time. By the time one buys a gallon of gas at the pump that crude has been taxed alot more than just once.

    • tranquil.night says:

      A wiseguy eh?!

      Mitt agrees with you!

      He said last night he wouldn’t like the Gingrich tax system. Why, then he wouldn’t be be paying any taxes at all!

      Nevermind the millions he’s already fed to Leviathan.

    • fallingpianos says:

      Let’s say for a moment that wiseguy (and Warren Buffet) have legitimate concerns about the tax code. Why does it never occur to these smarter-than-thou people to suggest that the secretary’s tax rate be lowered?

      Of course, I already know the answer. I just want to hear it from a self-proclaimed wiseguy.

    • proreason says:

      I’m with you wiseguy. I favor a wealth tax on all income that sits idly and isn’t put to work by investing in productive activities. Like what John Kerry does. For people like him, I would just take 5% per year of their unearned, unearning wealth. Most here would disagree, but I think that is fair.

      Of course, Mitt Romney’s money is invested in high risk ventures which, when the ventures work out, which only some do, gets taxed at 15%, because that is the law. He puts his money to work.

      But since you are obviously ignorant about how taxes work, are you aware that if those high risk venture’s fail, which many or most do, then there is only a three thousand dollar offset to the ones that do? Which for most people is nothing. So if Mitt makes 20 million this year, he will pay 3 million in taxes. If he loses 20 million next year, he will pay no taxes for that year, but over two years, he would earb nothing but pay 3 million in taxes. His two year tax rate would be infinity. Put it on paper, and ask your teacher to help you understand it.

    • tranquil.night says:

      “You guys need to go back and study the French revolution.”

      Heh, you need to study France since the French revolution.

    • Petronius says:

      Every Liberal’s idea of civilization = blood on the cobblestones.

    • wiseguy says:

      tranquil.night said: “Nevermind the millions he’s already fed to Leviathan.”

      Compared to most of us his ‘millions in taxes paid’ is a mere pittance compared to what he earned (less than 15%). Pay-up your fair share bud. His earnings indicate he has used way more of our roads, airports, tradeports, seaports, and other infrastructure than a person grossing what a secretary earns. I’m sure if his earnings were cut back to $5,000 per hour he could ‘get by’ … :-O

      fallingpianos said:”Why does it never occur to these smarter-than-thou people to suggest that the secretary’s tax rate belowered?

      Not enough reasoning power, eh, so got to resort to name-calling. I’m neither far right nor far left, but I can see here you’ve been influenced by cult-radio …. the furor himself ‘Hile Limbaugh’. I thought you guys were so concerned about the huge budget deficits?? Lowering the tax rate for the secretaries is out of the question for now. The ‘fat cats’ need to pay their fair share.

      proreason said:
      “But since you are obviously ignorant about how taxes work, are you aware that if those high risk venture’s fail, which many or most do, then there is only a three thousand dollar offset to the ones that do? Which for most people is nothing. So if Mitt makes 20 million this year, he will pay 3 million in taxes. If he loses 20 million next year, he will pay no taxes for that year, but over two years, he would earb nothing but pay 3 million in taxes. His two year tax rate would be infinity.”

      Obviously here you are the ignorant one. Romney invests in practically nothing that is ‘high risk ventures’. If he did, he would have no problem releasing the last dozen years or so of his tax returns. He is afraid to release those tax returns because they would all show he has made millions and millions every year. By definition such ‘high risk ventures’ as you are referring to would not make Romeny millions and millions of income each and ever year.

      tranquil.night said: “Heh, you need to study France since the French revolution.”

      France has a stronger middle class than the United States, especially since the 2008 Bush-Financial-Crash.
      France is also in debt like the U.S.A.

      Signed wiseguy.
      “Unregulated capitalism” is as bad as facism or communism.

    • BigOil says:

      Our nation sure is blessed. It can only be divine intervention that we have geniuses like Wiseguy and Barry the Great to determine exactly what percentage of the labor should be confiscated from those rich sob’s for the greater good. By focusing our confiscation efforts on the top 1%2%…whatever they deem appropriate, we should be able to limit the pecentage of slaves to well below pre-revolutionary war America.

      I think he is beginning to win me over. Utopia is right around the corner.

    • Dupree says:

      wiseguy says he’s a centrist, then from the other side of his mouth quotes the rabidly liberal Liz Warren. Whatever man. It’s not about your side winning or my side winning. It’s not about some arbitrary percentage of income that can be considered fair to some nameless bureaucrat. It’s about setting up a system which best allows for economic growth and stability, because this benefits everyone. Central planning and penalizing producers does not and has not accomplished this.

    • tranquil.night says:

      “Compared to most of us his ‘millions in taxes paid’ is a mere pittance compared to what he earned (less than 15%). Pay-up your fair share bud.”

      Keyword: earn. Not inherit, not steal.

      Why doesn’t the fairness argument go both ways?

      How about you do your fair share, work harder, and earn more, bud?

      “France has a stronger middle class than the United States, especially since the 2008 Bush-Financial-Crash.”

      Bud, France’s entire population doesn’t fit into the size of our middle class. The average low-income American stills enjoys over a 20% higher standard of living than average “middle class” French.

      France’s economy is stagnant. Their investing and entrepreneurial classes are castrated. They’re not just in debt and structurally unable to grow out of it; they’re financial system is close to mortal peril because of generations of the unfunded state socialist behemoth.

      This HAS been happening here since 2008 especially for a very understandable reason: Liberalism. We started emulating everything that brought Europe to the point at which it is now. Purposefully. Without regard or care for the broader impacts because all that mattered was employing the government to arbitrate Social Fairness.

  7. wiseguy says:

    BigOil: “…to determine exactly what percentage of the labor should be confiscated from those rich sob’s for the greater good. By focusing our confiscation efforts on the top 1%…2%…whatever they deem appropriate,…

    It’s not rocket science guy, it’s called INCOME TAX, the more you earn the more you pay. Quite simple, really … do you get it now? Why should the wealthy get a free lunch off of the rest of us? Romney pays less than 15% of his earnings to taxes, while a secretary that earns in a year what Romney earns in about 2-3 hrs of his time, pays twice that. Romney needs to pay his way and not expect us to pay his way.

    Dupree:”It’s about setting up a system which best allows for economic growth and stability, because this benefits everyone.”

    Amen bro…

    Dupree:”Central planning and penalizing producers does not and has not accomplished this.”

    Central planning …. get a life… it’s called an INCOME TAX. The more you earn, the more you pay, period. Penalizing producers ….. are you crazy, first off I would argue the point whether what Romney did ever produced anything worthwhile, but that is a different subject. Let’s assume he did produce alot … besides b.s. If he produced alot, then he should have no problem paying his way. Paying his way, means he pays a higher percentage of income to tax than the secretaries do plain and simple.

    tranquil.night:” Why doesn’t the fairness argument go both ways?”

    You’ve got to be kidding me, How is it ‘fair’ that Romney pays less than 15% of income to tax, and the secretary pays double that? How is it fair that Romney gets a free ride while the common average person pays almost double the percentage in tax he pays? Fair????? …Not.

    tranquil.night:” How about you do your fair share, work harder, and earn more, bud? ”

    Have done that am doing that and probably alot harder than any of the lot of you. As an engineer with my own company I use to quit paying social security tax by the middle of April almost every year (once a person’s income hits a certain level for the year, they don’t have to pay anymore social security insurance). Then most of my work went to China and India. With a kid in 9th grade, and another starting their freshman year at university, i went back to school at great personal sacrifice and into a healthcare field. Had to declare bankruptcy right after graduation. The field I chose is now flooded and there are 100 plus people that apply just for a one day a week part-time job. This is the first time in 50 + years that this particular healthcare field has had to many people and not enough jobs. It happened about 5yrs. ago.. the field getting flooded. Now, I’m going back to school for another healthcare field that has a more advanced degree, so should eliminate as many people going into it. Now my youngest who was 9th grade is in med school. So i’m working part-time in my 1st healthcare field, when i can get work, and going back to school. Oh yeah, while i was in engineering we built our own house, a friend was the ‘brain’ my spouse and i were the brawn.
    So don’t lecture me about working harder and earning more!!
    Oh yeah, back when I had my engineering company I use to think it was very unfair that I didn’t have to pay social security insurance (old age insurance) anymore. I had the money and I would have gladly paid it for the whole year. Get rid of the income cap, and there would be no problem with social security.

    Oh yeah, the french middle class is far better off in the matter of health insurance. From friends who live there, the insurance goes with them whereever they go. In other words it doesn’t go with the job. It frees up a whole host of economic opportunities when one does not have to worry about whether or not there is health insurance, also greatly increases worker mobility.
    A big problem they have with jobs is the huge influx of immigrants to France.

    Signed wiseguy.
    “Unregulated capitalism” is as bad as facism or communism.


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