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ROMNEY: Who pays more than they have to?

Letter by lyle laws, puyallup on Jan. 23, 2012 at 1:37 pm with 40 Comments »
January 23, 2012 1:37 pm

I wonder how many of the people who are screaming about the percentage of Mitt Romney’s earnings that goes to pay income taxes pay more than the law requires them to pay. Or for that matter how many of them don’t have to pay any federal income taxes at all.

Over all, between the 15 percent he pays in personal income taxes and the 20 to 35 percent the Bain investment company pays in corporate income taxes before he receives his share of the earnings, in effect Romney actually pays about 35 percent or more on his total income.

Why are so many people (mostly Democrats, of course) so upset because someone made profitable investments and paid the full amount of taxes required?

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  1. Lyle Laws – in effect he DID NOT pay 35%, as you deduce. Do you figure your employers tax when you sum-total your own personal earnings and taxes? Didn’t think so. The IRS doesn’t, either. So I guess you’re the only one!

    People are torqued because an educated high wage earner typically pays above 28% on personal income. Romney’s burden is less than 1/6th of his enormous income, while you and I have a burden of 1/3rd our (presumably) more-modest income. But, because his ‘paychecks’ come from capital gains rather than a salaried arrangement, he gets blessed by the tax-fairy. And you are perfectly ok with it because somewhere down the line, some finance lobbyist successfully amended the tax code to their benefit.

    Since you, Lyle Laws, are so perfectly happy as long as its ‘law,’ then I’m sure you’re head over heals regarding Obamacare that will be taking effect shortly. Hey, its ‘the law’ after all? Ooops – we may have found an inconsistency with your logic after all………..

  2. Justsayin says:

    He pays a lot more than I do or you do for basically the same services. Percentages are unfair mechanisms for taxation. The military protects him like everyone else. He gets the same benefit from public education everyone gets, yet he pays way more in raw dollars that most of us. Percetages are leftist mechanisms designed to redistribute wealth.

  3. sandblower says:

    Percentages are a fair share arrangement that are in place because of all the reasons so accurately expressed by Elizabeth Warren, candidate for the US Senate from Massachusetts.

  4. “the 20 to 35 percent the Bain investment company pays in corporate income taxes”

    What makes you so sure Bain investment company pays 20 to 35 percent in taxes? I thought they were a pass through entity.

  5. Lyle – unless Bain investment company is a sole proprietorship, Romney doesn’t pay their taxes.

  6. And Lyle – its the Republicans who have been making a big stink about Romney’s finances, not the Dems.

  7. If it’s really fair that we want then shouldn’t everybody pay something? I understand that the rich should pay their share and they probably recieve more than there share of the pot. But all of those who pay nothing still get to vote on how we spend the taxes they don’t pay, so please explain again how that’s fair. The people who trully are getting the short end of the stick is middle income Americans.
    The top has become the pigs at the federal troff while the bottom is the suckerfish atached to the taxpayer sucking everything they can while doing nothing. Both need to be kicked to the curb.

  8. oldman4, if you work you pay medicare and social security taxes. These are two of the four biggest spending items at the federal level.

    Plus there a few excise taxes that are not income based.

  9. I’m no right-winger, but I agree with you Oldman4 – for symbolic value at least, everyone should pay federal tax, even if its just a nominal amount. I would remind everyone that the poor pay plenty of local taxes, everything from vehicle excise to gas to consumer goods… 10 cents of their few dollars is more significant a hit to them then 10 cents on my dollar.

  10. concernedtacoma7 says:

    Buffet structured his income in a similar fashion to Mitt, very deliberately to avoid taxes. Where is the outrage on Buffet?

    The companies he invested in paid taxes. It was his capital at work and the taxes cut into his profit.

    And if is so unfair, why did BHO, Nancy and Harry not address it when they had the chance?

    This whole debate was sparked by Newt trying to capitalize on the class warfare movement started by a canadian mag and pushed by our current president. There is no economic value in this conversation, just a distraction from BHOs failed economy and an excuse to raise taxes.

  11. lylelaws says:

    Norsey,

    Why do you think it is wrong when someone who has earned his money honestly only pays what the IRS requires? Do you pay more than you need to pay?

    After all, by himself Governor Romney pays more federal income taxes than half of the people in Amereica combined do. Is that fair?

  12. lylelaws says:

    BeerBoy,

    It is only natural that those of you on the far left try your best to trash Mitt Romney because you know that he is the Republican candidate who has the best chance of defeating Obama.

    By the way BeerBoy,do you feel guilty because you don’t pay more than the IRS requires?

  13. ct7, So glad you brought up Warren Buffet!

    Buffett Blames Congress for Romney’s 15% U.S. Tax Rate

    Jan. 23 (Bloomberg) — Warren Buffett, the billionaire calling for more taxes on the rich, said Mitt Romney’s U.S. rate of about 15 percent reflects poor laws rather than failings by the candidate for the Republican presidential nomination.

    “It’s the wrong policy to have,” Buffett told Bloomberg Television’s Betty Liu in an interview today. “He’s not going to pay more than the law requires, and I don’t fault him for that in the least. But I do fault a law that allows him and me earning enormous sums to pay overall federal taxes at a rate that’s about half what the average person in my office pays.”

    http://www.businessweek.com/news/2012-01-23/buffett-blames-congress-for-romney-s-15-u-s-tax-rate.html

    Now we’re all on the same page with Warren Buffet, aren’t we?

  14. er, that’s Buffett, with 2 t’s

  15. Come on Lyle – I’m not criticizing Romney, I’m criticizing the tax scheme that burdens the salaried man greater than the capital gains man. If I sell computers, 1/3rd of my income is taxed. If I sell financial ‘goods’ less than 1/6th of my income is taxed. How does that make sense?

  16. bobcat1a says:

    I’m still trying to figure out why different classes of income pay taxes at different rates. Why is one kind of income taxed at more than other kinds. Why would I get a lower rate for money I inherit than money I win in the lottery or earn as a worker? Could it be that rich people write the tax laws and protect their own? Just asking…anyone have a rational answer?

  17. If Mitt didn’t break any laws, what’s the beef?

  18. I agree with Bobcat. We should have a flat tax… for everyone. No loop holes.

  19. concernedtacoma7 says:

    No, I am not on the same page as Buffett.

    You sell computers and pay your 1/3. Mitt and Buffett invest their wealth in companies that make a good or service. Those companies pay a tax, then Mitt and Buffett get their share. Then they pay their own taxes.

    Buffett pays 40% of the money earned by him to the govt

  20. bobcat1, You answered your own question!

    “Could it be that rich people write the tax laws and protect their own?”

    Lobbyists paid by rich people (Remember what Mitt said, “Corporations are people too, my friend!”) go to congress to influence the writing of tax bills, and often times write the complete bills themselves, and then use campaign contributions, and other “inducements” to the legislators to get the laws passed that benefit the rich people.

    ct7, That’s kind of what Mr. Buffett is saying too, and if Warren Buffett were really paying 40% tax rate as you say, then he probably would NOT be saying the things he’s saying right now about the tax laws. The article said Buffett pays taxes at about half the rate of his employees. Are you trying to tell us that Warren Buffett’s employees are paying at an 80% tax rate? I think not!

    From the article:

    Buffett, “He’s [Romney's] not going to pay more than the law requires, and I don’t fault him for that in the least. But I do fault a law that allows him and me earning enormous sums to pay overall federal taxes at a rate that’s about half what the average person in my office pays.”

    “Buffett has said his tax rate is the lowest among the about 20 employees at Berkshire’s headquarters in Omaha, Nebraska. Capital gains from most assets held for longer than a year are taxed at a top rate of 15 percent, while wage income is taxed at a top rate of 35 percent. The difference between those two accounts for Buffett’s lower rate.”

    http://www.businessweek.com/news/2012-01-24/buffett-blames-congress-for-romney-s-15-u-s-tax-rate.html

  21. Lyle – so Newt Gingrich is part of the “far Left”?????

    You are entitled to your own opinions but you are not entitled to your own facts. Romney released his taxes after questions from REPUBLICANS.

  22. And Lyle – Robamney as President….how do you imagine that will be any different than Wobamush’s term?

  23. “If Mitt didn’t break any laws, what’s the beef?”

    The beef is in the enormous concentration of wealth that the capital gains tax rate seems to feed.

    Concentrated wealth is a very, very bad thing! It limits business growth; it limits invention; and it’s bad for human health among other things.

  24. ManuelMartini says:

    “Mitt and Buffett invest their wealth in companies that make a good or service.”

    We’ve learned that Romney made money by closing companies, laying off employees and bankrupting their pension funds.

    And for this we should tax him less?

  25. alindasue says:

    I keep reading about how the capital gain tax rate should be raised because “the rich” aren’t paying their fair share…

    Do you people realize what the effect of a raise in capital gains’ tax would do? Who it would affect?

    I’m not talking about “The 1%”. Sure, they could just about afford any type of raise in the tax rate without having to sacrifice the summer house. That’s not the issue.

    However, when we talk about capital gains, we are also talking about your CDs and IRAs. We are talking about pension funds and investments made to build up our retirement nest-eggs. Those are all capital gains.

    As the letter writer points out, “I wonder how many of the people… pay more than the law requires them to pay.”

    Mitt Romney’s tax preparers (I doubt he does his own taxes, although it is possible) no doubt find him the most deductions that they legally can, just as yours and mine would. He can’t be faulted for that.

    We could just plain raise the tax rate on capital gains to make him pay more, but then we would be affecting the incomes of millions of retirees as well. Something to consider…

  26. Well said alindasue.

    I’m for a flat tax, no deductions, everybody pays something.

  27. alindasue – just as income tax has sliding brackets that adjust upward, capital gains taxes could adjust upward – this is exactly what Buffett has proposed.

  28. to clarify alindasue – the capital gains structure could easily be changed in a manner that would have absolutely no impact upon the average retiree and only target those who are “earning” millions per year from their investments.

  29. alindasue says:

    beerBoy said, “alindasue – just as income tax has sliding brackets that adjust upward, capital gains taxes could adjust upward – this is exactly what Buffett has proposed.”

    Warren Buffet’s proposal has merit, but we need to be careful to “adjust upward” enough that we are in fact moving into the realm of venture capitalists and beyond the frugally invested retirement accounts.

    It’s been my experience that “make the rich pay more” measures tend to do a good job protecting low income people from the increase, but low income people tend not to have much along the line of capital gains to worry about. Anybody above “low income” tends to get caught in the fray paying more…

  30. aislander says:

    Elizabeth Warren’s opinions on the dependency of the economy on government are ludicrous and demagogic.

    The government–if it is operating within its means (which means OUR means)–depends on the economy, NOT the other way around!

  31. BlaineCGarver says:

    “If I sell computers, 1/3rd of my income is taxed”

    Bull..unless computer salesmen earn about four times what I do (and that’s unlikely, and my rate: single, and no deductions is about 11 or 12%, which I consider too damn much when put on top of the state sales and all the hidden taxes)

  32. hansgruber says:

    For goodness sakes, he paid what the law requires. Enough.

  33. stumpy567 says:

    Let’s look at the other extreme…… someone who gets paid to file taxes.

    A rough estimate of this scenario

    Single wage earner claiming head of household filing status
    with 2 qualifying dependants.
    (qualifies for earned income tax credit)

    Income $36000 estimated withholding @ 15% $5400
    Standard deduction $8500 (Head of household)
    exemptions 3 @ 3700 $11100 (one exemption for each person)
    basis for tax owed $16400
    tax due $1856
    Earned income credit ($5112)
    Tax paid/ withholding ($5400)

    Pays no tax and gets $3256 from our government!!!!!!!!!!!

    I’m not against supporting families and I want fairness but this is the other extreme in our tax code that no one talks about.

  34. PumainTacoma says:

    Heavens vote OBAMA out of office. I am so tired of his weak stance and bitterness for American success. He and Rev. Jeramiah Wright and Michelle can go back to Chicago and bemoan America from their own doorstep and not that of the presidency.

  35. stumpy567 says:

    Why don’t you 99% folks out there have yourself a paradigm shift and think of yourselves as 1% wannabees?
    If you focused on solutions rather than problems everyone would be happier.

  36. “If you focused on solutions rather than problems everyone would be happier.

    SOLUTION: Let’s fix the federal tax system, like Warren Buffett suggests, to make it so everyone pays his fair share?

    Today’s news is saying while Mitt Romney paid about 13% on his income, the average American paid about 26%. So let’s implement this solution that everyone pays at least 26%, until the budget is balanced and the national debt is wiped out, then we can allow the government to lower tax rates. This will make us all happier!

    The motion has been submitted. Do I hear a second?

  37. stumpy567 says:

    “everyone pays at least 26%, until the budget is balanced and the national debt is wiped out”

    Muckibr,
    Do you really trust the government to reduce our taxes when the budget is balanced?
    That’s part of the problem no matter how much we pay they will find a way to spend more than they collect.
    The solution: pass a balanced budget amendment to the constitution.

  38. aislander says:

    We’re talking about paying taxes on earnings from money that has already been taxed. Do you want to pay 35% or more (if lefties get their way) on the equity on your house when you sell?

  39. alindasue – any frugally invested retirement fund that nets more than a $1 million per year can stand an increase in rates.

  40. alindasue says:

    beerBoy said, “alindasue – any frugally invested retirement fund that nets more than a $1 million per year can stand an increase in rates.”

    True, and if the higher tax level is adjusted to allow retirement nets below that to pay the lower rate, there would be no problem.

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