Mitt Romney releases two years of tax records from 2010to 2011

[Brovane]

I previously created a thread where people posted their real tax percentage (fed only). It averaged out to be 10% when the few outliers were removed.

This means Romney is at 1.5 times the tax rate of most of us.

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People complaining about Romney's effective tax rate don't want to hear facts such as this.

 

[fskimospy]

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People complaining about Romney's effective tax rate don't want to hear facts such as this.

That's because it not only ignores the total tax burden to people, but it even ignores other elements of federal taxation.

 

[Brovane]

Does that include Social Security/Medicare taxation? My guess is no. Throw those in for everyone and then recalculate.

The discussion was effective Federal income tax rate not pay roll taxes. Which is what the Romney excitment is all about, effective Federal income tax rate.

 

[fskimospy]

The discussion was effective Federal income tax rate not pay roll taxes. Which is what the Romney excitment is all about, effective Federal income tax rate.

Well, if you want to ignore inconvenient taxes that everyone pays that's fine. Just recognize that such a statistic is not telling the whole story, and if you count the total percentage of your income that the fed takes out of your pocket, the outcome is quite different.

If people are interested in an actual accounting of what percentage of their taxes people actually pay, here's a good CBO report on it:
http://www.cbo.gov/ftpdocs/100xx/doc10068/effective_tax_rates_2006.pdf

A good counter example would be that the average american pays 7.65% of their income in social security/medicare taxes. Mitt is paying less than one percent of his income in those taxes, so at a minimum the average American pays a percentage of their income that's 7 times higher or more than Mitt. THE HORROR!

 

[Brovane]

That's because it not only ignores the total tax burden to people, but it even ignores other elements of federal taxation.

I am getting really tired of people looking at their top income tax bracket and assuming all their income is taxed at this rate. In example somebody makes $60k a year, and isn't married. They then assume that their effective Federal income tax rate is 25% because they are in the 25% bracket. That isn't the case.

 

[Ausm]

So most of his income is from investments... which the company earning that revenue paid taxes on. Should the U.S. government just keep taxing the money until there is 50 cents left over?

It Romney's case I would say yes.....

Moran

 

[dmcowen674]

Mitt Romney releases two years of tax records from 2010to 2011

Republican presidential candidate Mitt Romney released tax records on Tuesday indicating he is paying $6.2 million in taxes on a total of $42.5 million in income over the years 2010 and 2011.

http://nbcpolitics.msnbc.msn.com/_n...ned-425-million-is-paying-62-million-in-taxes


Must be nice paying this amount in taxes!

No surprise he is a 1% er

 

[fskimospy]

I am getting really tired of people looking at their top income tax bracket and assuming all their income is taxed at this rate. In example somebody makes $60k a year, and isn't married. They then assume that their effective Federal income tax rate is 25% because they are in the 25% bracket. That isn't the case.

Can you point to who is doing that? I've seen zero mention of that anywhere.

That report references average tax rates within quintiles.

 

[Brovane]

Well, if you want to ignore inconvenient taxes that everyone pays that's fine. Just recognize that such a statistic is not telling the whole story, and if you count the total percentage of your income that the fed takes out of your pocket, the outcome is quite different.

If people are interested in an actual accounting of what percentage of their taxes people actually pay, here's a good CBO report on it:
http://www.cbo.gov/ftpdocs/100xx/doc10068/effective_tax_rates_2006.pdf

I understand completely. Lets just not mix apples/oranges. If we are going to look at Federal income tax rate then we look at this. However comparing total tax burden against Romney's effective Federal income tax rate doesn't show anything. The problem is that calculating total tax burden for a specific individual is much more difficult than doing effective Federal tax rate.

It is like when certain people on this board throw out the % of people that don't pay any Federal income taxes, because their income low and they jump to the conclusion they don't pay any taxes at all. Well if you work you contribute taxes in the form of pay roll taxes, no matter how low your income is. Usually with low income people they actually pay more in pay roll taxes than income taxes. Not even getting into sales tax which is fairly regressive because low income people have to spend a higher % of their income on items that are sales taxed.

 

[fskimospy]

I understand completely. Lets just not mix apples/oranges. If we are going to look at Federal income tax rate then we look at this. However comparing total tax burden against Romney's effective Federal income tax rate doesn't show anything. The problem is that calculating total tax burden for a specific individual is much more difficult than doing effective Federal tax rate.

It is like when certain people on this board throw out the % of people that don't pay any Federal income taxes, because their income low and they jump to the conclusion they don't pay any taxes at all. Well if you work you contribute taxes in the form of pay roll taxes, no matter how low your income is. Usually with low income people they actually pay more in pay roll taxes than income taxes. Not even getting into sales tax which is fairly regressive because low income people have to spend a higher % of their income on items that are sales taxed.

Right, but what other taxes do you think Romney is paying? Payroll taxes would be a vanishingly small amount of his income. Sales tax would certainly consume some, but it's likely a smaller percentage of his income than a middle class person's as well. (or at least comparable) I'm sure there are some, but when payroll taxes comprise a larger tax on people's income than actual income taxes I think ignoring them gives a pretty heavily distorted view on taxation.

 

[Brovane]

Can you point to who is doing that? I've seen zero mention of that anywhere.

That report references average tax rates within quintiles.

It is more commentary on the boards for the articles on Romney, like at CCN and LA Times.

Speaking on NBC’s “Today” show Tuesday, senior White House advisor David Plouffe called Romney’s taxes “a good example…of the tax reform we need.”

“There's no question that we have a tax code that's far too complicated, far too complex, and when the average middle class worker is paying more in taxes than people who are making $50, 60 million a year, we've got to change that,” he said.

There was this comment from the WH. I understand what they are saying but they are comparing Romney's effective Federal Income tax rate against total tax burden. However I think a lot of people reading this will jump the conclusion that they are talking Federal Income tax burden not total tax burden. They don't say that most middle class workers have a effective tax rate of less than 15%. We don't know what Romney's total tax burden is. Probably even Romney doesn't know this.

 

[Brovane]

Right, but what other taxes do you think Romney is paying? Payroll taxes would be a vanishingly small amount of his income. Sales tax would certainly consume some, but it's likely a smaller percentage of his income than a middle class person's as well. (or at least comparable) I'm sure there are some, but when payroll taxes comprise a larger tax on people's income than actual income taxes I think ignoring them gives a pretty heavily distorted view on taxation.

I do understand what you are saying. On income from investment their is no payroll taxes. Even if we include pay roll taxes to 10% that pushes the average to around 18%. Of course in 2011 we paid less in SS taxes so it would be around 16%. That is why Obama's SS tax rate cut was so important for the economy because it benefted everyone who works.

 

[fskimospy]

It is more commentary on the boards for the articles on Romney, like at CCN and LA Times.

Speaking on NBC’s “Today” show Tuesday, senior White House advisor David Plouffe called Romney’s taxes “a good example…of the tax reform we need.”

“There's no question that we have a tax code that's far too complicated, far too complex, and when the average middle class worker is paying more in taxes than people who are making $50, 60 million a year, we've got to change that,” he said.

There was this comment from the WH. I understand what they are saying but they are comparing Romney's effective Federal Income tax rate against total tax burden. However I think a lot of people reading this will jump the conclusion that they are talking Federal Income tax burden not total tax burden. They don't say that most middle class workers have a effective tax rate of less than 15%. We don't know what Romney's total tax burden is. Probably even Romney doesn't know this.

We can take a good guess though. Generally people who make lots of money pay a lot more in taxes than the average person. Specific industries such as fund managers (like Romney!) are able to use the tax code to vastly lower their tax burden to where it is almost certainly lower than a good portion of the middle class.

This isn't true of all the wealthy by any means, but it does represent a meaningful subsection to which Romney is specifically a part.

 

[spacejamz]

That's supposed to be relevant? Really?

Just as relevant is the lefties here complain that companies (i.e.,oil) make too much based on a dollar amount instead of relevant statistic such as profits margins.

 

[dmcowen674]

Originally Posted by Jhhnn
That's supposed to be relevant? Really?

Just as relevant is the lefties here complain that companies (i.e.,oil) make too much based on a dollar amount instead of relevant statistic such as profits margins.

Oh stop it. They don't post the profit margin.

 

[cybrsage]

The table below shows industry rankings for net profit margin (profits / sales) of the top 114 industries out of 215 total industries during the most recent quarter, from Yahoo!Finance.

The top five oil companies (Chevron, Shell, BP, ExxonMobil and ConocoPhillips) are part of the "Major Integrated Oil and Gas" industry, and the CEOs of the "Big Five" are appearing today before the Senate Committee on Finance, to get grilled about the "taxpayer subsidies" and "tax breaks" they receive, explain why they deserve to earn record "windfall" profits, and explain the role they play in higher oil and gas prices.

As the table below shows, the Integrated Oil and Gas industry made an average profit of 6.2 cents per dollar of sales, which ranks #114 out of 215 industries by profit margin, and puts oil companies right in the middle of industries by profitability.

http://mjperry.blogspot.com/2011/05/oil-profit-margin-ranks-114-out-215.html

 

[Atomic Playboy]

True, and I thank HaShem quite often for the blessings He has given me.

$10 x 40 = $400 x 52 = $20,800 This is gross income.

$20,800 - $5,800 standard deduction for single person = $15,000
$15,000 - $3,700 personal deduction = $ $11,300 This is ajusted gross income.

The tax on $11,300 is $1,274. This makes that ditch digger pay an effective tax rate of 11.3%

EDIT: Forgot supporting links:

http://www.irs.gov/pub/irs-pdf/f1040.pdf
http://www.irs.gov/pub/irs-pdf/i1040tt.pdf

You're missing the point entirely. The whole point of a progressive tax system is that as people make more money, they pay a greater percentage in taxes on it under the belief that they can more easily afford it. Someone paying $1,200 in taxes who only makes $20,000 a year has to make serious concessions to afford that tax burden. Someone who makes $45,000,000 can pretty easily afford to pay $6,000,000 in taxes; he still has $39,000,000 left at the end of the year.

So instead of comparing the poorest members of our society to the richest and arguing how great the tax incentives are, why don't you do the math and tell us how Mitt Romney's taxes would be different if his $42.5 million income came from taxable payroll from a company and not in the form of capital gains? That's the real issue that we're addressing; not that Romney doesn't pay his fair share compared to a ditch digger, but that people who make all their money from investments don't pay their fare share compared to people who work for a living. Would Romney still have an effective tax rate around 15% if his money was taxable as income and not capital gains?

 

[Ausm]

You're missing the point entirely. The whole point of a progressive tax system is that as people make more money, they pay a greater percentage in taxes on it under the belief that they can more easily afford it. Someone paying $1,200 in taxes who only makes $20,000 a year has to make serious concessions to afford that tax burden. Someone who makes $45,000,000 can pretty easily afford to pay $6,000,000 in taxes; he still has $39,000,000 left at the end of the year.

So instead of comparing the poorest members of our society to the richest and arguing how great the tax incentives are, why don't you do the math and tell us how Mitt Romney's taxes would be different if his $42.5 million income came from taxable payroll from a company and not in the form of capital gains? That's the real issue that we're addressing; not that Romney doesn't pay his fair share compared to a ditch digger, but that people who make all their money from investments don't pay their fare share compared to people who work for a living. Would Romney still have an effective tax rate around 15% if his money was taxable as income and not capital gains?

The Right Wingers in here can't grasp the basic concept of a progressive Tax system for some reason.

 

[WackyDan]

He's more or less paying the capital gains rate, not using loopholes or anything else. I think the capital gains rate should be higher, but he's not doing anything that could remotely be considered unethical.

The sad thing is the average person will look at this and say we need to raise the top income rate even higher which will do nothing to people like Romney but hurt upper middle class people.

What should the capital gains rate be? Think about that carefully.

I am middle class... Yet I have managed to buy some stock and have some other investments that are not traditional retirement vehicles.

The current rate at 15% allows me to realize a return on my investment that is not huge, but nice enough that I want to invest more...

Raising the cap gains % would hurt small time investors like me who might only cash in several thousand dollars worth of stock at one time...

Perhaps the cap gains rate could be loosely tied to overall income level, making it progressive like the income tax code. Exceed a certain yearly income, or cap gains amount and you go up in brackets.

It should also be noted that for some investment gains....Like dividends, the corporation pays full tax on those before allocation to share holders... who then pay 15% cap gains on them... Raising the effective rate on paper to 50% - * Yes... assuming the corp is paying the 35% corp tax rate...

Tax code is so hosed.....

 

[cybrsage]

You're missing the point entirely. The whole point of a progressive tax system is that as people make more money, they pay a greater percentage in taxes on it under the belief that they can more easily afford it.

15% is higher than 11.8%.

So instead of comparing the poorest members of our society to the richest and arguing how great the tax incentives are, why don't you do the math and tell us how Mitt Romney's taxes would be different if his $42.5 million income came from taxable payroll from a company and not in the form of capital gains? That's the real issue that we're addressing; not that Romney doesn't pay his fair share compared to a ditch digger, but that people who make all their money from investments don't pay their fare share compared to people who work for a living. Would Romney still have an effective tax rate around 15% if his money was taxable as income and not capital gains?

They are different things. Taxable payroll is 100% risk free, investment income involves risk where you can lose all your money. To say the two are the same is silly.

 

[lothar]

And what I think is interesting is that Newt's tax plan has capitol gains tax rate at 0%, and Mitt Romney said that under his plans he wouldn't pay any taxes.

This is the problem small and large investors have the same tax rate. What I would like to see is a 0% capital gains tax when invested under a certain dollar amount, something like 50k or 100k would have to do research to find a good number. Then something like 15% after that to like 300k, then another higher rate after that. Or at least something like this, giving small investors an advantage over large investors. Really the entire system and what is taxed and at what rates needs to be changed. But I think they could find a good system to help growth a larger population where one large investor won't gain such huge benefits and gives smaller investors more incentive.

Mitt Romney's economic plan proposes to eliminate capital gains taxes for anyone that makes less than $200k/year.

 

[Sonikku]

Holy crap. Just looking at this topic and at this board it becomes clear this election is more about math and how effectively politicians can spin it then any other I have ever seen.

"If anything the rich have never had more of the tax burden! They're being taxed to death!"

"If anything the rich have more of the tax burden because they became two and a half times richer while everyone elses pay stayed flat!"

"If anything the corporations are taxed to death at 35%!"

"If anything corps like GE and others exploit the tax code to pay nothing at all!"

UGH. It's become a damn "spinning" war.

 

[Deeko]

with that line of reasoning my income tax should be lowered since the company I work for paid taxes on it.

This is incorrect. Companies pay corporate income tax on profits, not gross revenues. The income your company gives you is considered an expense deducted from their revenue, and therefore they are not taxed on that amount - you are. Capital gains are, in fact, after the corporate income tax.

I'm not arguing for against capital games here, so please don't try to spark an ideological battle with me over if this is right or wrong. I'm just stating the facts of the situation.

 

[The-Noid]

Holy crap. Just looking at this topic and at this board it becomes clear this election is more about math and how effectively politicians can spin it then any other I have ever seen.

"If anything the rich have never had more of the tax burden! They're being taxed to death!"

"If anything the rich have more of the tax burden because they became two and a half times richer while everyone elses pay stayed flat!"

"If anything the corporations are taxed to death at 35%!"

"If anything corps like GE and others exploit the tax code to pay nothing at all!"

UGH. It's become a damn "spinning" war.

I think the Republican line would be for a flat tax, rather than the huge deductions, corporations and personal are taking. Capital gains need a way to differentiate themselves beyond short and long term as well.

Carried interest vs. actual investment, venture investment has different rates than late money etc.

 

[TechBoyJK]

You are putting the cart before the horse.

Its when you make that kind of money, you should be smart enough to hire a great tax attorney/account to comply with the tax code.


No one gets to that kind of money by hiring tax attorney's.

Bad phrasing on my part. What I was trying to suggest is that people who get rich (ethically) typically also have a great tax attorney because they can afford one. So the rich people usually have someone thoroughly analyzing their taxes and seeking out each and every possible way to pay the lowest taxes possible.