Romney/Bain

[sd'sker]

america essential has a regressive tax rate: "Investor and multi-billionaire Warren Buffett has criticized the US tax code as highly regressive, citing himself as anecdotal evidence: Buffett stated that with an income of over $46 million, he pays a tax rate of 17.7%, whereas his receptionist pays a tax rate of 30%. Buffett's critique focuses on significantly lower tax rates applied to certain forms of investment income including capital gains. However, progressive or regressive taxation often must be considered as part of an overall system since tax codes have many interdependent variables."

[carlfense]

america essential has a regressive tax rate: "Investor and multi-billionaire Warren Buffett has criticized the US tax code as highly regressive, citing himself as anecdotal evidence: Buffett stated that with an income of over $46 million, he pays a tax rate of 17.7%, whereas his receptionist pays a tax rate of 30%. Buffett's critique focuses on significantly lower tax rates applied to certain forms of investment income including capital gains. However, progressive or regressive taxation often must be considered as part of an overall system since tax codes have many interdependent variables."

Income is income . . . unless you have the money to lobby Congress to treat your $100 in income differently from another's $100 in income.

[huKSer]

[sd'sker]

america essential has a regressive tax rate: "Investor and multi-billionaire Warren Buffett has criticized the US tax code as highly regressive, citing himself as anecdotal evidence: Buffett stated that with an income of over $46 million, he pays a tax rate of 17.7%, whereas his receptionist pays a tax rate of 30%. Buffett's critique focuses on significantly lower tax rates applied to certain forms of investment income including capital gains. However, progressive or regressive taxation often must be considered as part of an overall system since tax codes have many interdependent variables."

Income is income . . . unless you have the money to lobby Congress to treat your $100 in income differently from another's $100 in income.

what really bothers me are capital gains taxes. people making a ton of money for having a ton of money should be taxed a ton (in thinking hedge funds). people making a little on investments, which are a bigger risk because of their limited income, should not be taxed at all.

[zoogs]

 

Ooh, clever. So, when or if Mitt Romney becomes president, whose money exactly do you suppose he is going to be working with?

 

carl, I was hoping you would go more in-depth on the marginal tax stuff!

[sd'sker]

hukser, do you think what the mega-rich do with their money does not affect us all?

[carlfense]

carl, I was hoping you would go more in-depth on the marginal tax stuff!

I'll try.

 

Probably the easiest way to explain our marginal tax rate system is with a simplified example.

 

Let's imagine a hypothetical tax codes with three tax rates:

First: the tax rate for income up to $20,000 is 0%.

Second: the tax rate for income between $20,000 and $100,000 is 10%.

Third: the tax rate for income over $100,000 is 20%.

 

Family A (Husband, Wife, Kid) earn an income roughly at the poverty line of $19,000.

Family B (Husband, Wife, Kid) earn an income of $40,000.

Family C (Husband, Wife, Kid) earn an income of $200,000.

 

Now, if you want to demagogue this issue . . . you (rightly) point out that family A pays no income tax. Zero dollars. However, if you look more closely at the situation you'll see that Family A, B, and C all pay zero dollars in income tax on their first $20,000 in income. Family A is not exempt from the tax code . . . they just don't earn enough money to break into the second bracket.

 

Family B would pay $0 on their first $20,000, and pay 10% in tax on their second $20,000. That leaves them with a tax bill of $2,000.

 

Family C would pay $0 on their first, $20,000, pay 10% in tax on their next $80,000, and 20% on their remaining $100,000. That leaves them with a tax bill of $28,000.

 

Each family, regardless of total income, pays the same rate on each dollar within each bracket.

 

That's why it's disingenuous when talking about the Democrats proposal regarding Bush tax cuts to say that the everyone gets a tax cut except for the rich. All of those middle class and lower tax cuts? The rich get those cuts just the same as the lower classes. Under that proposal taxes would return to prior levels for dollars earned above $250,000 . . . but the tax cuts would be retained for each dollar earned less than $250,000.

 

 

 

Clear as mud? Kind of what I thought.

[zoogs]

Hey, that is interesting. And very clear, by the way.

 

My understanding of the importance of marginal tax to the tax discussion actually, was about incentives. A progressive tax that is too steeply progressive results in situations where individuals have no incentive to earn more, because earning a little more would result in being hit by a higher rate of taxes. For instance, a family earning $19,999 would not be properly incentivized to up their income above $20,000.

 

In general, being an argument against highly progressive taxes.

 

A flat tax would be steeply regressive in effect, however. I don't think that would be considered by anybody to be a serious proposal.

[carlfense]

Hey, that is interesting. And very clear, by the way.

 

My understanding of the importance of marginal tax to the tax discussion actually, was about incentives. A progressive tax that is too steeply progressive results in situations where individuals have no incentive to earn more, because earning a little more would result in being hit by a higher rate of taxes. For instance, a family earning $19,999 would not be properly incentivized to up their income above $20,000.

 

In general, being an argument against highly progressive taxes.

 

A flat tax would be steeply regressive in effect, however. I don't think that would be considered by anybody to be a serious proposal.

There's definitely a tipping point somewhere . . . but I think where a lot of people get lost is thinking that (referring back to my hypothetical brackets) if they earn $99,000 they want to do everything possible to keep from earning $100,001 or more because their entire income will be taxed at the 20% rate.

 

Yglesias just covered this phenomenon a couple days ago. http://www.slate.com/articles/business/small_business/2012/07/small_business_tax_myths_most_firms_are_not_affected_by_obama_tax_proposals_.html

 

At the link you'll see people claiming that they earn close to $250,000 and not wanting to go over that mark because they want to avoid the taxes. (Which leads me to seriously question their income claims.)

 

 

But anyways, back to your point. I think there is a term (something like _____'s Law, or ______'s Principle) for the optimum efficiency point for tax rates. It escapes me at the moment.

[carlfense]

Drip. Drip. Drip.

“Romney said he will stay on as a part-timer with Bain, providing input on investment and key personnel decisions. But he will leave running day-to-day operations to Bain's executive committee.” (Greg Gatlin, “Romney Looks To Restore Olympic Pride,” The Boston Herald, 2/12/99)

http://www.slate.com/blogs/weigel/2012/07/13/did_the_romney_campaign_create_the_swift_yachting_story_.html

[carlfense]

And more!

 

Another Globe article published in 2002contains a quote from a former Bain Capital executive named Marc B. Wolpow who said Mr. Romney remained in a very active role at Bain Capital while he was supposedly on a leave of absence for his Senate race.

 

“I reported directly to Mitt Romney . . . You can’t be CEO of Bain Capital and say, `I really don’t know what my guys were doing,’” Mr. Wolpow said of Mr. Romney role at the company during his leave.

 

Mr. Wolpow declined to comment on this story.

 

http://politicker.co...07/romney-bain/

 

Where does Romney's campaign rank on a list of inept campaigns?

['SkersRule]

It's crazy how someone can be a mere community organizer, then serve briefly in the Senate and somehow be "qualified" to be elected President.

 

Apparently, leftists think that the American people lack common sense....well they're half right.

[huKSer]

And more!

 

Another Globe article published in 2002contains a quote from a former Bain Capital executive named Marc B. Wolpow who said Mr. Romney remained in a very active role at Bain Capital while he was supposedly on a leave of absence for his Senate race.

 

“I reported directly to Mitt Romney . . . You can’t be CEO of Bain Capital and say, `I really don’t know what my guys were doing,’” Mr. Wolpow said of Mr. Romney role at the company during his leave.

 

Mr. Wolpow declined to comment on this story.

 

http://politicker.co...07/romney-bain/

 

Where does Romney's campaign rank on a list of inept campaigns?

Well, at least he was born in the U.S. of A.

[zoogs]

Just to clarify, what are the ramifications if Mitt did indeed stay on longer than 1999?

 

Association with Bain failings 1999-2002?

 

Embarrassment over various misrepresentations in how he has characterized this part of his departure?

 

Something more sinister/inappropriate about having been at Bain while he was not supposed to be?

[krill]

Just to clarify, what are the ramifications if Mitt did indeed stay on longer than 1999?

 

Romney has deflected criticism of some of Bain's more controversial (in a political sense) buyouts that resulted in bankruptcies and / or large layoffs by saying he left in 1999, before the more high profile cases like KB Toys.

 

I don't think Romney should really have to defend his record at Bain, since he did nothing illegal and Democrats invest in such firms as much as Republicans. What bothers me a lot is that for 10 years (circa 1999-2009) Romney continued to draw a sizable income from Bain investments, which he paid very little taxes on. That's why he has refused to release his tax information before 2010. Someone brought up the topic of fairness. so what's fair here: A middle class worker paying 25/28% on the bulk of their income + payroll taxes, a poor single mother paying no income taxes after credits/deductions, Romney paying well under 15% on millions of dollars in investments he's not even managing.

 

Romney defending himself in interviews from his lakeside estate in NH was also great thinking by his campaign.