Willard Mitt Romney and his Great tax rate- Hey Mitt release your tax records?

[Jackie S]

This election cycle is openning the eyes of many Americans.

The small business man, (and his employees), who makes the vast majority of his income classified as "earned income", pays as much as 35 percent, and the Warren Buffets and Mitt Romneys pay 15 percent.

It's all legal, it's the law. But for the vast majority of Americans, it ain't right.

[waverunner234]

Finally COG, I agree with you

[CuteOldGuy]

Thank you, Wave. I've found that when people agree with me, they're generally right.

[waverunner234]

And I'm long on Euro Dollars and making big money as we speak

[waverunner234]

Rapluf knorotyof kla kiomata log nog upa kaoriola fnuf lokkorochikalimo whap nog laboshouf

[Sensia]

Originally Posted by Jackie S

This election cycle is openning the eyes of many Americans.

The small business man, (and his employees), who makes the vast majority of his income classified as "earned income", pays as much as 35 percent, and the Warren Buffets and Mitt Romneys pay 15 percent.

It's all legal, it's the law. But for the vast majority of Americans, it ain't right.

Nope not really legal just a tax loophole and an exploitation that has been used by the rich and corporations for quite some time. This is what needs to be changed. The fact Romney is exploiting this loophole then telling the poor and working class they need to do more (in the way of their taxes) is appalling and disgusting to me.

[nevergaveitathought]

Originally Posted by Guilty Pleasures

Nope not really legal just a tax loophole and an exploitation that has been used by the rich and corporations for quite some time. This is what needs to be changed. The fact Romney is exploiting this loophole then telling the poor and working class they need to do more (in the way of their taxes) is appalling and disgusting to me.

actually corporations cannot take advantage of a "lower" capital gain rate. the tax rates for regular corporations remain the same whether their income is from selling widgets or selling a long term asset.

as to a lower capital gain rate being a "loophole" as that word is commonly understood, no it isnt. a "loophole" is an ambiguity in the words of a statute by which the intent of the statute may be evaded.

in the tax laws, there are taxes on income and then there is a tax on long-term capital gains. the income tax applies to income, the capital gains tax applies to long-term capital gains. the two are not the same.

unless a "gain" qualifies as a long-term capital gain it doesnt qualify for the capital gains tax. there is no "loop-hole". the words of the statutes are not so ambiguous as to create a loophole.

there are several reasons investing on a long term basis is subject to a different tax than the receipt of current income.

one very simple reason is inflation. if you had $100 in 1985 and invested it, you havent had use of that money, its gone out into the economy, others are using your money to create current income from which they are paying the income tax at the income tax rates. now you sell your investment in 2011 and you receive $209 in exchange for your original $100. in terms of inflation you havent gained one thing, for $209 in 2011 will buy the same amount of "things" as $100 did in 1985. In fact after your 15% capital gains tax, you will have lost value. you took a risk, you helped the economy grow in terms of jobs, regular taxes paid by others etc, and if you had had a loss, so sorry, and even though you had a gain in terms of absolute dollars, you had a loss in value.

[I B Hankering]

Originally Posted by nevergaveitathought

actually corporations cannot take advantage of a "lower" capital gain rate. the tax rates for regular corporations remain the same whether their income is from selling widgets or selling a long term asset.

as to a lower capital gain rate being a "loophole" as that word is commonly understood, no it isnt. a "loophole" is an ambiguity in the words of a statute by which the intent of the statute may be evaded.

in the tax laws, there are taxes on income and then there is a tax on long-term capital gains. the income tax applies to income, the capital gains tax applies to long-term capital gains. the two are not the same.

unless a "gain" qualifies as a long-term capital gain it doesnt qualify for the capital gains tax. there is no "loop-hole". the words of the statutes are not so ambiguous as to create a loophole.

there are several reasons investing on a long term basis is subject to a different tax than the receipt of current income.

one very simple reason is inflation. if you had $100 in 1985 and invested it, you havent had use of that money, its gone out into the economy, others are using your money to create current income from which they are paying the income tax at the income tax rates. now you sell your investment in 2011 and you receive $209 in exchange for your original $100. in terms of inflation you havent gained one thing, for $209 in 2011 will buy the same amount of "things" as $100 did in 1985. In fact after your 15% capital gains tax, you will have lost value. you took a risk, you helped the economy grow in terms of jobs, regular taxes paid by others etc, and if you had had a loss, so sorry, and even though you had a gain in terms of absolute dollars, you had a loss in value.

+1
Some people will never understand.

[Texas Contrarian]

"The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital from static to more dynamic situations, the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential growth of the economy."

--John F. Kennedy, January 1963

[JD Barleycorn]

So I think some of us agree, lower taxes are a good thing.


I would be more concerned with what a candidate is invested in and who do they owe for their compaign cash.

[CuteOldGuy]

I think the best campaign reform would be instant disclosure of donations. All these regulations concerning donations simply makes them more creative about how to hide where the money is coming from. Let everyone donate what they want, then disclose. The people are better at picking out bullshit than the government.

[WTF]

Originally Posted by Jackie S

This election cycle is openning the eyes of many Americans.

The small business man, (and his employees), who makes the vast majority of his income classified as "earned income", pays as much as 35 percent, and the Warren Buffets and Mitt Romneys pay 15 percent.

It's all legal, it's the law. But for the vast majority of Americans, it ain't right.

Finally someone who gets it.

This is where Mitt will get exposed if he gets the nomination.

The Tax Code is fuc'd up.

Mitt is not a Corp.

Mitt is not investing his money, he was investing others. Why should he pay such a low rate. He is basically a money manger. Getting paid for doing the research. He should have to pay taxes as if that was ordinary income. No different than any other person getting paid for advice.

Big Banking BS has done a number on some of you. They have you thinking that they should be taxed lower than the rest of us or our world will collaspe. Nothing is further from the truth. Their fuc'n world would!

[cptjohnstone]

from what I hear, the 15% is based on long term capital gains and zero current income

[Texas Contrarian]

Originally Posted by WTF

Mitt is not investing his money, he was investing others. Why should he pay such a low rate. He is basically a money manger. Getting paid for doing the research. He should have to pay taxes as if that was ordinary income. No different than any other person getting paid for advice.

I assume that the issue WTF is referring to here involves what is called "carried interest." Since many people may not clearly understand what that means, let me try to explain it in a nutshell:

When a private equity or hedge fund manager forms a partnership for the purpose of pooling funds from a number of investors who wish to purchase ownership interests in an operating business, commercial real estate, or some other risk asset, he will often use a deal structure called "two and twenty." What that means is that he will charge a 2% management fee right off the top, no matter whether the investment works out well or not. Then additionally he will recieve a 20% share of any net capital gains over time. The tax argument essentially centers around whether an equity manager should be taxed at the capital gains rate (15%) rather than the "ordinary income" rate (35%) when the "gain" results from operations in which he did not place his own capital at risk. Those who support the tax break for carried interest claim that a higher rate of taxation on carried interest would inhibit capital formation; those who oppose it argue that it should be considered fee income, pure and simple, and therefore should be taxed at 35%. Although I have benefited from 2 and 20 deals, I will readily admit that arguments in favor of the tax break for carried interest are lame and disingenuous.

I have no idea what the deal structure of Romney's partnerships is or was. It may be that he has recently benefited from large carried interest distributions arising from past deals, or it may be that he is just selling off a few assets along the way.

Why does the carried interest break still exist, you might ask? Various journalists began talking about it four years or so ago. (It's existed for a long time.) The reason, of course, is money. Greenwich hedge funds managers spread plenty of that around. Senators Clinton and Schumer (NY) ran interference for years.

But I'm a strong proponent of at least reasonable preferential treatment of long-term capital gains when an investor has capital at risk. It never worked out well when politicians pushed the cap gains tax rate too far. Distortions resulted, and the projected revenue never materialized. History is very clear on that.

A lot of people are not aware of the strong inverse correlation between capital gains tax realizations and the top-bracket tax rate on capital gains. This graph is a real eye-opener for some:

[CuteOldGuy]

The income tax is ridiculous, and leads to all kinds of chicanery, legal and illegal. This is why Marx included it as a plank in his Communist Manifesto - it perpetuates class warfare and serves as a vehicle for transferring money from the taxpayers to elite. You know, everyone is equal, but some are more equal than others.