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Romney, this summer...
“I did go back and look at my taxes, and over the past 10 years, I never paid less than 13 percent,” Romney said in August.
Romney's 2011 tax return released yesterday....
Mitt Romney paid $1.9 million in taxes on $13.69 million in income in 2011, most of it from his investments, for an effective rate of 14.1 percent
Romney, in July....
I don't pay more than are legally due and frankly if I had paid more than are legally due I don't think I'd be qualified to become president.
The Republican presidential nominee could have paid less in taxes, but he engineered his 2011 returns to overpay the government to ensure that his effective tax rate would "conform" with his statement last month that he had paid at least 13 percent, according to his trustee, R. Bradford Malt.
Why is all this a problem for Mr. Romney? Is it a problem?
If Romney would have done like any of us would have done....taken the entire charitable donation deduction instead of only a portion.....his tax rate would have dropped to 10.38%, which would prove that his statement from August, "I never paid less than 13%", was not entirely truthful.
So what did Mitt Romney expect his tax preparers to do? Make sure Mitt's tax rate in 2011 did not come in lower than 13%. In order for that to happen, Mr. Romney completely contradicted something else he had previously said, "I don't pay more than are legally due and frankly if I had paid more than are legally due I don't think I'd be qualified to become president."
Mitt Romney is paying more than is legally due to the IRS in 2011. Therefore, (you finish the equation).
Mr Romney is truth-challenged.....and I'm being kind. But that's not some new revelation. This tax return situation just makes Romney appear foolish. Retroactive calculations to make it appear as if you had not lied about paying no less than 13%....while simultaneously paying more than required, which, in Mitt's own words, disqualifies him from being president.
Like I said , nothing new here.
But I want to say something about the fact that the Romneys paid taxes at a 13.9% rate on over $13 million in income. The Romneys don't work. They don't. Sure, Mitt has been running for president for the last 6 years, but neither Mitt nor Ann are employed. The couple receive over a million dollars per month from passive investments. Some offshore, most not.
Point being that a couple worth well over $240 million.....a couple who have not, as Mitt quipped, "had a job", for quite awhile....have millions sent to them in the mail every year....millions....for doing absolutely nothing. Those millions, because they come from what are called capital gains, are only taxed at a 15% rate. If those millions had been regular income from, you know, regular working at a job, then the tax rate would have been 35%.
Passive income....income you do nothing whatsoever to "earn".....no sweat of the brow, no involvement at all.....is taxed at 15%. Active income,.....sweat of the brow, personal involvement....is taxed at 35%.
The theory of the genuises who established this dichotomy explain that our country needs to encourage "investment". Lowering the capital gains rate to less than half of the highest income tax rate is supposed to incentivize wealthy folks to "invest" in America.
Today, that usually means hiring a broker to buy and sell equities in the markets. Account levels change but nothing is really invested in hard tangible products, buildings or innovations. Since the equities markets are a zero sum game for all those who participate.....same number of wins as losses.....whatever premiums are gained by the "investment" of the winners are negated by the losses of those who lose in the equities market. Zero sum game. Hardly a bee-hive of entrepreneurial-driven investing.
There are many forms of capital gains. Some I consider helpful, constructive and good for our economy and country. But most of today's capital gains are made from the "markets"...which means from buying and selling equities....an activity that is a zero sum game and only moves money around in already-existing accounts. Stock and option trading creates no wealth....for every winner there is a loser. That's not wealth creation...that's a crap game.
There's a reason why the "financial industry" has been accounting for a larger and larger share of our national income over the last decade. Very, very wealthy Americans, like the Romneys, have been incentivized by low 15% capital gains tax rates to gamble on non-productive paper shuffling rather than do the hard work of building a company or expanding an existing one.
It's time to start taxing passive investments at a much higher rate than 15%. It's time to incentivize work and production.....not gambling and paper shuffling.