13.9% Just Under 15% ?
What is a small amount of money ? The extremely excellent Josh Marshall typed
44 minutes ago (eek I just typed “just typed” then noticed the irony).
The tiny difference between the taxes Romney publicly guessed he roughly paid and the taxes he paid is over $450,000. One of Romney’s many gaffes is saying his taxes were around 15% because, although he had earned money for speaches, he didn’t earn much. Indeed he earned less than 450,000 that way. But it is a huge amount of money to earn with so little sweat.
Similarly the difference between 13.9% and 15% is more than seven times median family income.
Of course, Romney’s income isn’t close to a rounding error in the Federal Budget.
I think that getting the rate under 15% requires considerable effort. As a businessman consulting with his lawyers and accountants, Romney doesn’t leave money on the table (it’s not the money it’s the principle that it’s all about the money). As a candidate, I’m sure he really really wishes he had found a way to send a million more over to the IRS.
Damn!
Where is your Twitter feed?
This is gold!
It may be as simple as tithing. As a good Mormon Romney would be expected to donate 10% of pre-tax income to the Church which would be elibible as a charitable deduction. And 90% of 15% is 13.5%. And given that he had some income, at least those speaking fees but also I would think certain dividends and deferred compensation should incur taxation at the top rate. that might juice that 13.5% to 13.9%. I am not a tax pro but the numbers work out on a ten finger counting/top of the head calcuation.
That is the problem may just be in the tax code and not the tax preparation/finagling.
BTW you have to love the jiu jitsu Mitt pulled on Newt by pointing out that under Newt’s tax plan (no tax on capital gains) that Romney’s tax burden would have been zero. I mean you can attack Mitt as a worker corpse picking vulture or propose to give him and his fellow vultures a 100% tax cut, but trying to combine the two makes for some odd populism on Newt’s part.
It may be as simple as tithing. As a good Mormon Romney would be expected to donate 10% of pre-tax income to the Church which would be elibible as a charitable deduction. And 90% of 15% is 13.5%. And given that he had some income, at least those speaking fees but also I would think certain dividends and deferred compensation should incur taxation at the top rate. that might juice that 13.5% to 13.9%. I am not a tax pro but the numbers work out on a ten finger counting/top of the head calcuation.
That is the problem may just be in the tax code and not the tax preparation/finagling.
BTW you have to love the jiu jitsu Mitt pulled on Newt by pointing out that under Newt’s tax plan (no tax on capital gains) that Romney’s tax burden would have been zero. I mean you can attack Mitt as a worker corpse picking vulture or propose to give him and his fellow vultures a 100% tax cut, but trying to combine the two makes for some odd populism on Newt’s part.
Good points Bruce, especially on Gingrich vs Gingrich.
Just finished Newt’s reutrn, unremarkable except for his overall income and his use of the “John Edwards strategy.”
The JES leaves income to flow through from an S-corp rather than a salary, resulting in a savings of Medicare taxes (about $50K in Newt’s case).
AGI = $3,142, 066
Ti = $2,916,671
Taxes = $994, 708
I’m still not willing to bet that his rate is that high. Scott Lemieux gets it right: http://www.lawyersgunsmoneyblog.com/2012/01/mittens-and-regressive-taxes
Good points Bruce! So the bottom line is Mitt’s statement that he payed around 15% was correct and that he filed his tax returns legally and had a good tax team to prepare them. Anyone making his amount of money would hire tax preparers, to not do so would be idiotic at his level and would disqualify him as President.
So where’s the beef?
Islam will change
The beef Buff is that Romney thinks he paid much too much in taxes and that the code should be changed so he pays millions less. In contrast, Newt thinks Romney should pay about zero (as noted by Bruce).
The question to ask is whether it is a terrible problem that Romney paid 13.9 % because he should have paid less, so that the nation’s most urgent need (aside from repealing HCR) is to cut his taxes.
Only by arguing that it is horrible that he paid that much can you argue that the Republican party serves any useful purpose.
Ah, the joys of spin. Being wrong by $450,000 is “correct”. Being 7.3% lower is “just under”. Or, spun another way, Mitt took the highest conceivable tax rate, given what was known about his status, and offered that when asked. In reality his tax payments are an even smaller share of his income than he let on when first made to discuss the issue. Since Romney had reason to know that he didn’t pay the full 15%, saying he did was dishonest. I’m a little surprised Marshall calls 13.9% “just” under 15%. In that range of tax rates, the savings of a 1% difference is pretty large.
And the “beef”, quite obviously, is that he advocates for a tax system that advantagees him and others like him. The tax system is a spoils system for people like Romney, in the same way that his work in private equity was taking of spoils. The goal is to get as much what the economy produces as can be arranged, rather than to be paid for producing value. That’s Romney’s career so far, and he seems to want to continue taking spoils at the presidential level.
Right, kharris. That’s what being President is for! The government is a vast money machine. The President is there to make sure that the right people get the money the machine pumps out. Who better suited to that job than a former vulture capitalist? NancyO
I just hope that this comes up and that Mitt protests that it was just a “rounding error.” It would be fun to make hay with that fact that at his level of income a rounding error is worth half a million dollars.
More importatnly, though, I don’t understand why people don’t focus more on asset/wealth disparity than income disparity. No one begrudges anyone a single good year, and plenty of individuals do float in and out of higher brackets from year to year. It’s when the tax advantages, the financial chicanery, the political connections, and other forms of rentier income compound year over year over year that things get bad.
When only a tiny fraction of the poplulation controls the vast majority of the capital, and they deploy it not through entrepreneurship but by chasing whatever the asset class of the day is and/or through rentier strategies, that’s when we wind up in real trouble. Yes, income disparity is a symptom, but this is the true disease.
Did Romney publish a PDF of the return?
Did Romney’s run off deal with Bain expire in 2009?
Wow, sorta makes your eyes water.
http://mittromney.com/learn/mitt/tax-return/2010/wmr-adr-return
That they guy didn’t do jack shit but cash checks, including ‘carried interest’ derived from management tasks actually performed by others and only paid 13.9% to pay for his share of national defense and the U.S. Court system that protects his vast wealth.
Relatively few people outside Econoblogs and certain business reporters really understand that billionaires pay tax AT MOST at 15% and without even fiddling around too much can drive their rate below that even as they bitch and moan that poor people, who after all are paying over 15% in combined FICA FROM THEIR VERY FIRST WAGE DOLLAR, “don’t pay taxes”.
Romney apparently had zero wage income in 2010 or 2011 and so paid no Social Security or Medicare tax at all. Meaning on that basis alone he paid a smaller percentage of his income than Juan the Dishwasher.
If you don’t see the inequity involved with charging workers more on their first wage dollar than a billionaire on his first, middle and billioneth dollar derived from passive investments and/or management fees then there is not much I can do.
Of course I personally don’t subsribe to the fact that the entire incidence of FICA actually falls on workers because it is carried on the books as “labor compensation” along with medical insurance premiums. But Romney clearly subscribes to the Econ 101 model and so is stuck with the implications.
Interesting, I think, that as the financial industry finds itself in the middle of an “emporer has no clothes” episode, the powers within the GOP are backing a guy from the financial industry. Private equity or venture capital is a big distinction in reality, but in today’s politics, both are “Wall Street”. The GOP is at risk of having a guy who got rich doing Wall Street stuff at the top of its ticket. Paying very low taxes on his Wall Street gains seems to me just the first of a long series of issues to which Romney is vulnerable. This seems to me a very odd choice.
Ike won the presidence after he won the war. Romney wants to be president after he (people like him, that is) lost the economy. Does this make political sense?
Interesting, I think, that as the financial industry finds itself in the middle of an “emporer has no clothes” episode, the powers within the GOP are backing a guy from the financial industry. Private equity or venture capital is a big distinction in reality, but in today’s politics, both are “Wall Street”. The GOP is at risk of having a guy who got rich doing Wall Street stuff at the top of its ticket. Paying very low taxes on his Wall Street gains seems to me just the first of a long series of issues to which Romney is vulnerable. This seems to me a very odd choice.
Ike won the presidency after he won the war. Romney wants to be president after he (people like him, that is) lost the economy. Does this make political sense?
no
2010 speaking fees were $528,800. Gasp.
Bruce et al,
Your point? Did he do anything not perfectly legal? Did his tax preperation team not do due diligence? I’ll let a noted Democrat speak here:
“
Warren Buffett, the billionaire calling for more taxes on the rich, said Mitt Romney’s U.S. tax 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.”[…]
“He makes his money the same way I make my money,” Buffett said. “He makes money by moving around big bucks, not by straining his back or going to work and cleaning toilets or whatever it may be. He makes it shoving around money.”
So obviously your argument is not with Romney but with the system. You could have just as easiliy wrote this post using Buffet’s names and numbers. Or Soro’s or Koch or Heinz-Kerry etc etc.
And Obama and the Dems have had 3 years and multiple oppurtunities to change the system. And they did nothing….
BTW, I thought it was very interesting that he donated more to charity than he gave to the IRS. A very generous man with his wealth.
So it comes down to the fact you don’t like the current tax code and stand against the policies of both the Democrat and Republican parties. So who you going to vote for?
Islam will change
In political terms, Romney should have been out ahead of this last year at the latest. Letting this pop up now is just incomprehensibly stupid.
I hope his economic advisors are smarter than his political advisors.
Sure it does. They have a huge propaganda machine telling anyone who will listen that the problem is too much govenrment interference, too high a tax burden, too many handouts via “entitlement” programs.
They hear and they believe.
Which is part of why –
WASF!
JzB
str,
Yes that IS true. These should have been out way before this.
And it should be obvious he has pretty good economic advisers…
Islam will change
No, he has good CPAs.
“And Obama and the Dems have had 3 years and multiple oppurtunities to change the system. And they did nothing…. “
That is a lie. In the real world the votes to do something about increasing taxes like that were never there thanks to the Blue Dogs afraid for their seats so saying that they could have changed the system just isn’t true.
Also the do nothing part as Obama et all raised taxes on the rich to pay for health care reform. Of course the main point is yours, given the rules of the senate, Obama and the Democrats *and* Lieberman were only really in power for a few months which they devoted to HCR.
In any case, if we agree that the laws which allow Romney to pay so little are bad laws, we can agree that he should never be President as he wants to reform them so he pays much less.
Jim,
Nope it was not a lie. At the minimum the Obama administration could have done nothing and let the Bush (now Obama) tax cuts expire. Obama and the Dems just had to sit on their hands.
But I do notice another Dem admitting that Bush Jr was more adept at handling Congress and getting his bills passed than Obama…
And Robert anyone randomly picked from a phonebook would be better than Obama…
Islam will change
Buffy’s unwillingness to see the point being made here is pretty evident, given his “where’s the beef?” and “Your point?”. But let me try to help.
As I noted before (but Buffy somehow didn’t absorb), Romney is campaigning for more of the tax policies that allow him to pay so little. That, along with plentiful examples of his disconnect from how the lower 99% lives, suggests him to be a poor choice for power. Since he is campaigning to get people like us to give him power, then the “point” surely is that we should not give it to him.
By the way, in addition to his effort to pass off 13.9% as 15%, TPM points out that he carried forward some losses on the tax forms he has released. That may well mean he paid a far lower tax rate in 2009, because he had enough losses to offset any realized gains. And there are those accounts in tax havens. Yes, he has closed (some of) them. Timing is coincident with changes in US law which reduce the tax sheltering ability of some overseas accounts, so whatever he actually did, there is a suggestion that he was very active in avoiding taxes. Illegal? Maybe not. Probably not, given that he has harbored political aspirations for a long time. But what we have here is a guy who spent his private career doing nothing productive, the sort of nothing that can lead to great riches. A big part of his experience is in thinking about how to gain advantage for a narrow group of people by – as Summers and Schlifer put it – breaking tacit contracts. That is a very poor background for the presidency.
Funny, Buffy seems entirely willing to say bombastic things about Obama’s qualification for the presidency, but seems unable to graph that the rest of us are discussing Romney’s qualification for the presidency. Wonder what could be inhibiting his understanding?
kharris,
And my point is he’s more qualified than Obama. Who, BTW, fully supports Romney’s tax position as Obama has done nothing with his overwelming majorities to change them. Obama also had to actively campaign and sign into law the Obama tax cuts that you all deride with such ferocity. From a tax perspective there is no difference between the two.
So since your out in the political wilderness, who will you vote for?
Islam will change
Buffy,
I realize that you cling to the fiction of Obama having control over policy outcomes, so that he can be blamed for any policy that exists. The truth is otherwise. Seriously, honest discussion requires resisting the urge to spin every little thing. I know that would leave you pretty much empty inside, poor little fellow, but them’s the facts. The “you all: and “overwhelming majorities” and “such ferocity” are simply distractions, which suggests you’ve got a pretty weak position once all the misdirection is stripped away. Oh, and the trick of turning discussion of issues into political challenges – don’t you think that’s getting a little tired? Many of us WANT to think about what the right policy is, in addition to thinking about what’s politically possible. Any time you seem to be having trouble selling your view, you fall back on “politics, dude, so you lose”. Really, really gettting old.
So here’s a test you should try for yourself. In the quiet of your own little brain, without the embarassment of level-headed, fact-based folk watching, see if you can make an argument that doesn’t involve spin you’ve picked up from your partisan masters or dishonest claims about what other people believe. We don’t need to see the results. Having you crank out one junior-high level intellectual exercise isn’t going to change anybody elses’ life. It might, however, change yours.
I realize that you cling to the fiction of Obama having control over policy outcomes, so that he can be blamed for any policy that exists. The truth is otherwise. Seriously, honest discussion requires resisting the urge to spin every little thing. I know that would leave you pretty much empty inside, poor little fellow, but them’s the facts. The “you all: and “overwhelming majorities” and “such ferocity” are simply distractions, which suggests you’ve got a pretty weak position once all the misdirection is stripped away. Oh, and the trick of turning discussion of issues into political challenges – don’t you think that’s getting a little tired? Many of us WANT to think about what the right policy is, in addition to thinking about what’s politically possible. Any time you seem to be having trouble selling your view, you fall back on “politics, dude, so you lose”. Really, really gettting old.
So here’s a test you should try for yourself. In the quiet of your own little brain, without the embarassment of level-headed, fact-based folk watching, see if you can make an argument that doesn’t involve spin you’ve picked up from your partisan masters or dishonest claims about what other people believe. We don’t need to see the results. Having you crank out one junior-high level intellectual exercise isn’t going to change anybody elses’ life. It might, however, change your.
Oh, by the way, I was perfectly aware that you were claiming Romney to be better qualified. In fact, that should have been pretty obvious to you, since I pointed out that you were making that claim. When you asked other people, who are making the argument that Romney is not qualified to be president, what their point is, I decided to help you by making it clear. You pass off your personal views as statements of fact, but then seem unable to grasp that others are disagreeing with you.
Or is that just another of your silly rhetorical poses?