Taxes
 

Why does it matter what a given candidate for political office pays in taxes as long as what was paid stands up to an IRS audit? It is highly unlikely the candidate had anything to do with writing the current/past tax code.

How many crazies are there out there (and there are a few) that would say: Oh I only had to pay under the current tax laws 15% and I feel so guilty here's another 15% just for the heck of it?:smash:

you're right.
However public sentiment is important in an election.
Joe the Butcher may pay 24% of his salary while Mitt the millionaire pays 15% of his salary. That doesnt sit right with most people.
Here is the kicker - Mitt wants to continue that policy and tax law. So his policy directly impacts the tax he pays. It wont sit right with voters.

msnbc.com (nonscientific) survey of what the people want.

Someone reported in comments "the math" based upon the current gov $$ needs supports a 16% flat tax rate?

Aside from the obvious bias ("wealth investors, like Romney"), those polls are useless. Everyone that replies to those things is all of a sudden an economist.

In my own ignorant opinion, it seems like the loopholes and tax deductions are the biggest issue. Child tax credits, mortgage deductions, rent deductions, trusts, the easily exploited "business expense", and 10,000 other flaws are what is wrong.

exactly - I just read a recap of ROmneys taxes. He takes a ton in itemized deductions. As a working family, we get creamed by the AMT and I take very little in deductions. Is that fair?

You guys know I am for low taxes but the problem is broader than the easy answer of tax rates, we need an overhaul of the system Married working families get screwed.

The one thing that really gets me is the carried interest for hedge fund managers which allows them to only pay a 15% tax on their first dollar of earnings.

Amt really sucks. I hate the amt of money I give away
Posted from my iPhone/Mobile device

Just about all of us go to the tax man, H&R Block or a financial advisor or CPA to do our taxes. We are all looking to save money and use loop holes to not pay the IRS. Romney paid 3 million in taxes last year,"so what." He paid what he had to according to tax law.

Enough said.:)

I'm not voting for the guy anyway.

I think that's exactly the point of all this. The tax law needs to be completely blown up and reconstructed to avoid letting people leverage these ridiculous write-offs and loopholes.

The guy paid 3 miilion to the Feds for working hard and being smart. Anyone here top that????

It takes money to make money :humpty:

-spence

Then why isn't the Federal government loaded!!!! They have trillions.
We all know they "invest"

But, if you earned the same amount of $$$ in SALARY from hard work, you'd be taxed much more and would be eligible for less in deductions - resulting in a much higher percentage.

I dont fault Romney at all but think the tax code is too hard on working families.

yet you continue to fault Romney....

"Joe the Butcher may pay 24% of his salary while Mitt the millionaire pays 15% of his salary."

and for the...4th time?...he's not paying 15% of his salary, he's paying 15% or so on his capital gains from investments he made with after-tax earned income(salary) which was already taxed at the top maginal rate when it was earned...good grief :confused: Joe the butcher is very likely paying little or no federal income tax when all is said and done if he is in the bottom 60% of earners

I agree with that statement.

You work get paid a wage take a percentage of your net and when acculminate a thousand or so you invest and that money starts to make money.

You do not need to be a millionaire to be well off. Most Americans do not save and not taught to save and invest. What do we do? We buy new cars that depreciate as soon as you turn the key, boats, 4-wheelers, ski mobiles, skiing, tickets to games etc:, keeping up with the Joneses.

"What em I suppose to do to have fun." DURRRRR.

Don't give me the crap that there is only monies to pay the rent, or mortgage and diapers. People always have money for cigaretts or booze, but no money to tuck away.

Anybody that smokes has to be a millionaire. :)

Not if his money was paid as "carried interest" like hedge funds managers are paid. I'm not sure how his earnings from Bain where paid. Romney (and the hedge fund managers) may be a special case and if you used the owner of a store for example, you are right.

I think the problem with what you said is that most people either don't care what the $ was originally taxed at or really don't know.

X 2

CBS fact check from last nights speach.

Fact or Fiction Number 5 - The Rich, Their Secretaries and Taxes

Treasury Secretary Geithner yesterday declined to answer a key question about the president's proposed "Buffett Rule": How many millionaires and billionaires pay lower tax rates than middle-income families?

The answer: not that many.

End of debate.

How about:
1. leave the capital gains tax rate as is.
2. The carried interest, which romney (and hedge fund managers etc) gets as a slice of Bain et al.'s profits from what I understand, goes to normal income rates
3. Set some floor for closing loopholes. If you make 7 figures a year, do you really need the child or mortgage intereste deductions?
4. Continue to close more corperate loop holes.

Of course we are all out to pay the least we can all pay, but there HAS to be a structure that doesn't decimate the lower and middle class that isn't 'class warefare'....

Sure. I do agree the middle class needs help. I think where we disagree is how it can be accomplished. I think cuts in spending will be enough.

i never once faulted romney. How can I, he is following the rules?
I fault the rules. Not romney. As is stated earlier, its not just the %, its the deductions and other. A working family making 100K - 300K, while well off is getting SCREWED in taxes. The code is not fair and has not been adjusted.
Not romneys fault.

Who in their right mind is not going to take advantage of an entitled tax
deduction if they know about it?

The whole progressive tax system needs to be completly overhauled and made into a flat or fair tax program.

It will never happen, too many lawyers, tax consultants and IRS employees
holding the power and Waaay too simple for the Govt. to want to understand.

After I get married next year, AMT is going to be a major concern of mine. But like you said, the rules are screwed up and because I do a lot of independent contract work, my CPA has advised me incorporate, work as an employee of that corporation and it will result in a portion of my earnings only being subject to Capitol Gains Tax, while also potentially helping us avoid AMT. All this work because the AMT is such a screw job.

Is is a messed up? Yup, certainly is.

As they say: don't hate the player, hate the game.

If it's too simple, it can't be easily exploited.

:hihi:

Perfect JD.:uhuh:

you continue to perpetuate the myth that he's not paying as much as he should and that there is a fairness issue that he's on the wrong side of and now that somehow what he pays in capital gains tax actually results in other people, like you, getting screwed...thus we have Warren Buffet's secretary sitting where American Heros have traditionally sat during the State of the Union as a poster child for those paying a higher tax on their "income" than the rich SOB that employs them, of coures we only find out later that this "secretary" makes between 200,000-500,00 dollars a year....sorry Jimmy, but that's exactly what your arguments imply and you fall right into this fairness trap which gets entirely away from the actual issue...

you are getting "screwed" because we have a government that is massively unfunded due to bloat and the current and future promises of entitlement programs...if they decide to tax capital gains on Romney types at 100%(and if you check there are only a small portion of "the rich" that fall into the capital gains class, the rest are paying the top marginal rate on earned income)....you will continue to be screwed because it will not solve the issue....the only serious cuts that Obama has proposed to date are military cuts which will in turn fund Obama Care, so we are gutting the military to create another unaffordable bureaucracy....some here have pointed out the reasons that taxes on capital gains are different than earned income.... do you want your capital gains or retirement investment dividends to be highly taxed at your retirement? I can easily make a credible argument as to why you should pay higher rates based on fairness and the needs of the government bureaucracy and in fairness to those that you have stood on the backs of to get where you are presently...

"adjusting the tax code" so that Romney pays more will not result in you paying less, they have no intention of allowing you to pay less because they have no intention of reducing government, and the nearly half of Americans earning incomes below you while paying little or no federal taxes need your generous contributions because they are enjoying unprecedented govenment benefits ...they will most likely ask you to pay more in the future..it's a fairness thing:)

"Joe the Butcher may pay 24% of his salary while Mitt the millionaire pays 15% of his salary. That doesn't sit right with most people."


I checked...the average salary for a butcher nationwide is around $30,000...

BLS data reveals that the mean annual wage for butchers and meat cutters is $30,190. Those in the 10th percentile earn $18,060; in the 25th percentile they average $21,850; in the 50th percentile $28,600; in the 75th percentile butchers average $37,380 and in the 90th percentile the average annual salary is $45,500. Most experienced union butchers likely make in the upper range of the bureau's salary spectrum.

Industries
The majority of butchers work for grocery stores, with 89,550 workers earning an annual mean wage of $30,550. Specialty food stores employ 12,770 butchers and meat cutters, who earn an average $27,910. Animal slaughtering and processing companies employ 11,010 workers, who average $27,380 per year. Other general merchandising stores employ 6,000 and pay $32,460 while wholesalers employ 3,220 with average earnings of $30,750. The industry paying the most, the federal government, employs 1,160 butchers and pays an average of $44,270 annually.



I think someone that posts frequently here can tell you what his federal tax liability is very quickly....if you check the tax rates he's likely paying 15% before deductions and eligible for a whole host of benefits

I suppose you can now complain about the inherent unfairness of "Millionaire Mitt" paying the same tax rate on his "salary" as Joe the Butcher :) although that would still be only partially credible if at all

congrats JD, to you and your future bride...that is great news...:claps:

Romney's Wiki page is very interesting...no community organizing or terrorist friends in the neighborhood or radical anti-American spiritual advisor "uncles"

In 1990, Romney was asked to return to Bain & Company, which was facing financial collapse.[52] He was announced as its new CEO in January 1991[64][65] (but drew only a symbolic salary of one dollar).[52] Romney managed an effort to restructure the firm's employee stock-ownership plan, real-estate deals and bank loans, while rallying the firm's thousand employees, imposing a new governing structure that included Bain and the other founding partners giving up control, and increasing fiscal transparency.[43][47][52] Within about a year, he had led Bain & Company through a turnaround and returned the firm to profitability without further layoffs or partner defections.[47] He turned Bain & Company over to new leadership and returned to Bain Capital in December 1992.


Millionaire Romney screwed the government out of tax revenue by working for $1!!!!!!

Exactly, if you or I or anyone of this site could get away with it they would.

Sounds like the right guy to lead this country out of the crapper. Obama has no business experience like this.

im not talking debt, Im not talking expense, Im talking tax code. The current tax code is not set up to properly tax today's population. This is not class warfare, this is not about Mitt. said it 10 times, you dont get it. the AMT screws working families.

I know...you've barely mentioned him...

isn't it ironic?

the AMT was created to properly tax yesterday's population and particularly targeted a few high earners, probably a fairness thing..... now it has you feeling all of this unfairness....there's a lesson there :uhuh:

Growth of the AMT

Although the AMT was originally enacted to target 155 high-income households, it now affects millions of middle-income families each year. The number of households that pay the tax has increased significantly in the last decade: In 1997, for example, 605,000 taxpayers paid the AMT;[49] by 2008, the number of affected taxpayers jumped to 3.9 million, or about 4% of individual taxpayers.[50] A total of 27% of households that paid the AMT in 2008 had adjusted gross income of $200,000 or less.

The reason it is relevant (matters) is because these candidates are making proposals about what the tax code should be.

How so? Is one required to pay a certain rate of taxation before he can make proposals? How is paying a certain rate, whatever that is, make one more qualified or expert or authoritatively relevent in any way to make such proposals?

Personally, I'd rather have someone who believed in lower rates, regardless of what his rate is, to make those proposals. And, like PRBuzz, I certainly would prefer someone who didn't cheat on his taxes to be in on the discussion.

It has to do with credibility. These guys would go out and complain about a 35% tax rate on the highest bracket. Once they have to show that they really don't pay that rate, the conversation changes. The question of " what do you actually pay matters to the people listening. Under Gingrich's plan, Romney who makes 40 million or whatever would pay 0% on pretty much his entire income, while a person making 75,000 would actually pay 15%. Just because it doesn't matter to you doesn't mean it is irrelevant.

By the same token someone who is paying 28% would bitch about someone who is paying 15%. So does that make the 28 percenter more credible? And in which direction--that the 15 percenter should pay more, or that the 28 percenter should pay less? And by the same token, should that nearly half who don't pay any federal income tax now have a say, and would they have any credibility if they demanded that everyone else should get their rates raised. And by the same token, would those that do pay 32% now have more credibility in the discussion than those who pay less? It sounds like if you are to have credibility in making tax proposals under your logic you should be in the highest bracket, and actually pay it, otherwise it might be perceived that you are for a tax code that makes OTHER people pay the burden.

And what is relevant to me is not some complex tax code concocted by actuaries who figure various percentages for different earners on some undefined, subjective standard of "fairness," but what the money is spent for. When figures like 15 trillion, and 30 trillion, and 50 trillion dollars, AND MORE are projected to be a national debt, then there is no tax bracket that is adequate. We are playing out a tragicomedy about a nation that boasted a glorious revolution of individual rights over a tiny tax on tea, that has now descended into squabling among ourselves over what size of our personal incomes should be confiscated to pay an impossible amount spent on an ever expanding transfer of wealth into a bottomless pit of mystery. And rather than revolting against that, we point fingers at each other and argue who should pay more.

some continue to blur the simple distiction between earned income and capital gains income....:smash:


The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital... the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth in the economy.
John F. Kennedy


this is the beauty and evil of a "progressive" tax code..politicians and citizens can arbitrarily target individuals and their wealth regardless of source based on arbitrary needs and political expedience while at the same time excluding large portions of the population who can be then be mobilized against those not paying their fair share...it's all very childish and shameful....tax policy is little more than a political club used to rile up portions of the population in order to grant politicians the ability to "institute fairness" which, as Jimmy has found, tends to envelop and adversely affect many more than was originally claimed intended like every other liberal "great idea".....

this argument over tax rates completely ignores the real problem that we have...

this is like an employee going to their boss demanding a larger paycheck.....and the boss telling the employee that they're already the highest paid at what they do they just have too many maxed out credit cards and children out of wedlock, equity loans and personal loans and they keep taking those 4 million dollar vacations when their salary is only a fraction of that(which sets a really bad example for others:uhuh:)...

and then the employee, deaf to all that was said, in response, starts bitching about how much the boss makes:)
as though that will somehow improve his situation....

"Focusing attention and attacks on people who have greater wealth-generating capacity — whether races, classes, or whatever — has had counterproductive consequences, including tragedies written in the blood of millions. Whole totalitarian governments have risen to dictatorial power on the wings of envy and resentment ideologies.

Intellectuals have all too often promoted these envy and resentment ideologies. There are both psychic and material rewards for the intelligentsia in doing so, even when the supposed beneficiaries of these ideologies end up worse off. When you want to help people, you tell them the truth. When you want to help yourself, you tell them what they want to hear.

Both politicians and intellectuals have made their choice."

Thomas Sowell

It's not that people are blurring the distinction between "earned income" and "capital gains income", it's that people are commenting about paying a sub-15% tax rate on their income, regardless of how it is categorized.

Taxes are taxes, whether I write a check to the state of MA or to the IRS, just like income is income whether it was earned through dividends or a paycheck.

no difference, regardless of how it is categorized....interesting...:confused:


this should be fascinating, I'll let the numbers guys weigh in before I take a crack at that logic

crickets...OK

first, while I would absolutely agree with you that there ought to be a simplification of the code and may even agree that all of the various forms of income ought be "treated the same" when a tax rate is applied....there are simply no facts to back up your statement that "income is income" because the various incomes are derived very differently and as such have been treated historically very differently with regard to taxation....it may just be a wishful "vote them all out" of type generality but we both know that neither are very likely to occur any time soon....

so if we are talking about the reality today...the two are very different, both in how they are derived, categorized.. as well as how they are taxed...

Romney is subject to various tax rates on various forms of income and expenditures just as you are subject to various tax rates on the same...you have differing rates on income, savings and investments depending on your income and investments and can take advantage of certain investments to avoid or defer taxes....seems that many jump on the "tax everyone the same bandwagon" up until they examine their own situation closely and consider what their liability might be now and in the future if they were to pay a flat rate with no deductions, tax shelters or incentives to invest

it is absolutely "blurring the line" to complain that Romney is paying a lower rate on income which is defined by the IRS as something entirely different than your own earned income(salary), which is exactly what has been said...noone has complained that Romney pays a lower rate on his investment income than they do because they pay the same and probably less...it is just disingenuous...apples and oranges...as is often said here

someome mentioned carried interest...which is 30% of Romney's income in the two years taxes that he released and derived from his time at Bain Capital, the rest is from other investments....you can certainly argue that carried interest ought to be taxed like earned income(but show me and example where earned income can be construed as a long term investment and an earner is willing to wait 1-5 years to receive the benefits of the income)

On a typical fund, it takes at least five years before the managers begin to collect carried interest, says Emily Mendell, a spokeswoman for the National Venture Capital Association.

.... there are stipulations that come with the derivation of carried interest that differ from traditional earned income that make them very different and more to the point, changing the way that carried interest is taxed would do precious little to improve the country's economic situation but I guess it might make a few people feel better and would still leave the Romney types paying 15 or so % on the other 70% of his income

if you want to argue for a 15% flat tax for all Americans on all income...I'm sure that Romney would be quite happy to support that:uhuh::)


read this...she gets into the nuts and bolts of the topic pretty well...she is an advocate of taxing all income equally and is pretty thorough in her assesment of the whole situation

Raising carried interest tax won't solve problem