Sally Kohn in Salon unpacks Romney’s “47 percent” crack, and what it means, specifically, to the Republican Party and their wealthy benefactors:
Now, what’s interesting is that, while complaining that poor people don’t pay enough in taxes, conservatives also complain that the wealthy pay too much. They do this by focusing on the absolute dollar amount paid, as opposed to percentage. So, for instance, when Warren Buffett states that he pays lower taxes than his secretary, conservatives protest. Buffet pays far more in actual dollars, they argue.
Which is, of course, true — 1 percent of $1 billion is $10 million whereas 40 percent of $100,000 is only $40,000. In absolute dollars, sure, the billionaire is paying far, far more than the middle-class family, let alone a poor family. Yes, conservatives are right, the top 10 percent of Americans pay more than half of the nation’s total tax revenues — but that’s because the top 10 percent enjoy more than half of the nation’s income. And that gulf of inequality is only growing.
But does anyone really think the richest of the rich should pay an effective 1 percent income tax rate while the middle class pays 40 percent?
Oh wait, right — Mitt Romney and Paul Ryan think that’s a grand idea! Under Paul Ryan’s budget plan, which Mitt Romney endorsed, taxes for the middle class would go up while tax rates for millionaires and billionaires would be slashed to unprecedented lows. And under this tax plan Mitt Romney, who currently pays a less-than-fair share of 15 percent would pay just 0.82% percent in taxes.
In other words, it appears Mitt Romney isn’t angry that desperately poor people don’t pay taxes — he’s jealous!
The rich work hard at wanting more. And with the GOP, that hard work always pays off.
OFA: “You work hard, stretch every penny, but chances are you pay a higher tax rate than him: Mitt Romney made $20 million dollars in 2010, but paid only 14% in taxes—probably less than you. Now he has a plan that will give millionaires another tax break and raises taxes on middle class families by up to $2000 dollars a year. Mitt Romney’s middle class tax increase: he pays less, you pay more.”
Ezra Klein: “The reason Romney’s plan doesn’t work is very simple. The size of the tax cut he’s proposing for the rich is larger than all of the tax expenditures that go to the rich put together. As such, it is mathematically impossible for him to keep his promise to make sure the top one percent keeps paying the same or more.”
The Brookings Institution backs this up:
“For some time, Mitt Romney has been promising to reduce income tax rates and then pay for these cuts by closing loopholes. But he’s never specified which loopholes he’d close and now we know why. A new analysis from the Brookings Institution (and first reported by Lori Montgomery in the Washington Post) suggests that, in order to lower tax rates without increasing the deficit, Romney would have to close loopholes that benefit middle-class Americans as well as the wealthy. The end result, if I’m reading the report correctly, would be lower taxes for the wealthiest 5 percent of Americans but higher taxes on everybody else. (See the graph below, which Steve Benen of Maddowblog constructed based on the report’s findings.)
“[...] For the record, reducing or eliminating tax breaks like the home interest mortgage deduction is a perfectly worthy idea, even if it means the middle class pay higher taxes. In the long run, most if not all of us need to pay more taxes. But Romney isn’t proposing to raise taxes on everybody. He’s proposing to raise them on the poor and middle class, while reducing them for the rich.
“Keep in mind that, even as Romney is proposing to taxes on most Americans, he is proposing to cut programs on which most Americans rely. His proposal to cap federal spending at 20 percent of gross domestic product, with a fifth of that set aside for defense spending, would inevitably require dramatic cuts to Medicare, Medicaid, and other vital public services.
“Figuring out the impact of campaign promises can be difficult. But if you’re like 95 percent of Americans, understanding what Romney’s plan means for you is simple: You’ll pay higher taxes and get fewer public services, so that Romney and his friends can keep more of their money. “
And the rubes in the GOP voting base allow themselves to be distracted by gays and abortion. It would be funny if they were the only ones to suffer the consequences.
Obama vs. Romney on tax rates: As you can see, rates are largely the same—except for the nation’s richest and poorest. The poor would pay almost twice as much in taxes under Romney’s plan; meanwhile, the very richest in the country would be forced to cough up about 10% more of their income under Obama. The net effect? In short, Romney’s plan would reduce federal revenues to about 17% of GDP—down .9% from where they are now. Obama’s budget would raise revenues 19.2%, with most of that money coming from those making over $250,000 a year.
It’s way past time to put that Republican fairy tale called “Investors and Job Creators Need Lower Taxes” to bed:
According to Republican gospel, taxes on investment must always be low, or else investors will simply sit on their money, refusing to do the very thing that could earn them more money. However, as David Abromowitz laid out in Bloobmerg View today, Mitt Romney’s tax returns undermine this argument.
After all, Romney made his fortune via investments made by Bain Capital, the private equity firm that he ran. And Bain’s investments between 1984 and 1999 “occurred when capital-gains rates were much higher than they are today. Yet Bain consistently attracted massive amounts of private capital, and thrived”…
[...] As billionaire investor Warren Buffett put it, “I have worked with investors for 60 years and I have yet to see anyone — not even when capital-gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain.” It’s worth remembering that it was conservative icon Ronald Reagan who completely equalized the tax treatment of investment and wage income, rejecting the argument that a lower capital gains rate was necessary to incentivize investment.
As Pat Garofalo noted earlier:
[Would the wealthy really] squirrel away their money under the mattress if the capital gains rate goes back to the level at which it was under Clinton? In fact, business investment was stronger under President Clinton that it was under President Bush. The overwhelming majority of capital gains go to the richest households. Keeping that rate so far below the rates applied to normal income is simply a giveaway to the wealthy that doesn’t boost the economy.
And what’s Mitt Romney, the GOP’s preordained presidential candidate, have to offer? Nothing if you’re not in the top one percent. For the rest of us, it’s the same old bottom to top income redistribution scheme — only more so:
While Romney would make these two groups — the poorest 125 million Americans — pay higher taxes, the top 60 percent all would get tax cuts. The top tenth of one percent would save, on average, $464,000 a year, the Tax Policy Center’s analysis says.
His plan gives one third of his tax cuts to the top tenth of one percent of taxpayers. By comparison, Bush gave this group only one eighth of his cuts.
Romney would also eliminate estate and gift taxes, a policy that I believe would damage the spirit of striving that has served us so well until now, replacing it with a new era of dynastic wealth.
Can you imagine? Romney and the GOP might as well just say, “Let them eat austerity.” What an outrage.
“Treat all income the same. Tax it all according to the same rate schedule. A dollar is a dollar, whether you got it from your labor or your inheritance or your hedge-fund fees or your stock sales. It isn’t the only thing we could do to improve the tax code, but it would be the most transformative, and it expresses a principle that few would be able to argue against. [..] I’d like to see Mitt Romney—and any Republican, for that matter—be forced to answer this question: Why should investment income be taxed at a lower rate than income people work for?” – Beyond the Buffett Rule (via ryking)
Tell me why this weird, awkward, robotic multi-millionaire, singing “America the Beautiful” Bill-Murray-lounge-style in the video below, should pay a lower tax rate than average working and middle class Americans? And if you’re a GOP base voter whose knee-jerk reaction is to defend the idea that millionaires should pay less tax, but you’re not — and, unless you win the lottery, will never be — a millionaire yourself, please describe the methods by which the Republican Party brain-washed you. It’s really important we understand what happened, for the survival of future generations.
It will never stop unless we make it stop:
Romney’s New Loophole For The Rich - The former Bain executive has pledged to eliminate capital gains taxes for households with income under $200,000. Roberton Williams explains how this would work in reality:
Nearly 80 percent of households already pay no tax on gains and dividends—either because they have no investment income or because they’re in the 15-percent tax bracket or below. This cut—about $40 billion in 2015—can only help the remaining 20 percent. Not surprisingly, the bulk of benefits go to high-income households. And, because the threshold would apply only to non-gains and non-dividend income, households in the top 1 percent would get nearly a tenth of the tax savings.
TAX CUTS for the wealthiest Americans are enormous & unaffordable:
If this simple math doesn’t clearly illustrate the Republican plan for bottom-to-top income redistribution, I don’t know what does. This is what Warren Buffet was talking about when he compared what he paid in taxes to what his secretary paid in taxes.
If millionaires were receiving the same tax ‘savings‘ as those making $50,000, instead of paying $103,835 less on their income (derived by labor or capital gains, doesn’t matter), their tax savings would be only $18,180. That’s a difference of $85,655 in additional tax revenue that could be going to our depleted treasury. That could be $85,655 worth of spending cuts that wouldn’t have to be made to programs and services that everyone uses and / or depends on.
BILL O’REILLY’S comments on income and taxes:
During an interview with White House press secretary Jay Carney, Bill O’Reilly criticized President Obama for using investor Warren Buffett as an example of the unfairness in the tax code. Obama, in his speech on jobs before a joint session of Congress, said that “Warren Buffet pays a lower tax rate than his secretary — an outrage he has asked us to fix.” O’Reilly took exception that remark, suggesting that it was an “apples to oranges” comparison because Buffett pays mostly capital gains taxes while his secretary likely pays mostly income tax.
His criticism is off base. Taxes on “capital gains” are taxes on income derived from capital, as opposed to income derived from labor. Both capital gains taxes and income taxes are taxes on income. O’Reilly is wrong to suggest Buffett and the president are being misleading or unfair.
And why IS income on labor taxed higher than income from capital gains? The majority of us derive income from our labor, and the majority of us are carrying those who derive income from capital gains because our labor is being taxed at a higher rate.
The inequality between the wealthiest and the rest of us isn’t just in how much our incomes are taxed either. Income inequality — what we earn and take home — has been growing for at least 30 years:
Productivity has surged, but income and wages have stagnated for most Americans. If the median household income had kept pace with the economy since 1970, it would now be nearly $92,000, not $50,000.
“… [T]he economists Thomas Piketty and Emmanuel Saez… found that from 1950 through 1980, the share of all income in America going to everyone but the rich increased from 64 percent to 65 percent. Because the nation’s economy was growing handsomely, the average income for 9 out of 10 Americans was growing, too – from $17,719 to $30,941. That’s a 75 percent increase in income in constant 2008 dollars.
But then it stopped. Since 1980 the economy has also continued to grow handsomely, but only a fraction at the top have benefited. The line flattens for the bottom 90% of Americans. Average income went from that $30,941 in 1980 to $31,244 in 2008. Think about that: the average income of Americans increased just $303 dollars in 28 years.
That’s wage repression.”
Isn’t it funny how the Republican party is in full-on war mode about two things: 1) more tax cuts for the wealthy / corporations and 2) spending cuts to “entitlement” programs (to help subsidize those tax cuts).
SOME IMPORTANT INFORMATION FOR THE TEAPARTY BASE:
Here’s a list of federal entitlement programs and the percentage of people who report they’ve not used a “government social program” –
Bonus question: guess which are the top 10 happiest countries in the world? (Tip: not the U.S.).