Why are you a Republican?

[Smitty]

Give me a break. A lot of Republicans are not conservative because of their religious beliefs – read above for a few examples.

The entire argument regarding taxation has nothing to do with people wanting to keep “all their money”….it has to do with what is reasonable. The “rich” already pay a TON. The top 10 percent of taxpayers pay 70 percent of the taxes.

For me – someone who is certainly NOT in that bracket – that sounds fine. How much do YOU think they should pay, din99?????? 80 percent? 90 percent? Give me a break.

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[JanS]

so…smitty…that “rich” paying 70%…back it up….links, please..

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[Smitty]

http://blog.heritage.org/2011/10/04/in-pictures-how-much-the-top-earners-already-pay-in-taxes/

http://www.ntu.org/tax-basics/who-pays-income-taxes.html

Jan, as you will soon discover people will obfuscate by adding in SS, State, Local and anything else they can find. But, the fact remains, the top 10% pay 70% and the bottom 50% pay only 2% of federal income taxes. That is what the current discussion is about.

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[dyn99]

Smitty,

Here is what I think is fair:

-For the poorest people that cannot afford to provide food or shelter to their families, they shouldn’t pay any tax. In fact, government should help them get food and shelter (preferably in a more effective way than it currently does), and provide them opportunities to for job training to increase their earning potential.

-For working class people who struggle with finances, living paycheck to paycheck their entire lives, they should pay some tax, but mostly consumption-based taxes to discourage them from buying certain types of products that don’t help them raise their standard of living. IE, cigarettes should be about 3x the price they are so most people can’t afford to smoke them.

-For the middle class, we should pay reasonable, progressive, but not excessive income taxes. A national VAT should be introduced and Internet purchases should be taxed as with other goods/services. The payroll tax should be eliminated and replaced by the VAT and a modified and simplified federal income tax.

-For the highest earners (say the top 10%), tax treatment should be fair for this group so that all high earners pay a minimum percentage of their total income in taxes.

Smitty, you can rail about the top 10% paying 70% of taxes all you like. But the fact is that there is a huge amount of unfairness in this group the way the current tax code stands. I can tell you that from the inside, as I am in this group.

For example, Mitt Romney makes $20m/year and pays 10-15% effective tax rates on his income.

I make less than 2% of what Mitt Romney does annually, and my effective tax rates are 25-30% on income every year. Once you factor in the 15.3% payroll tax (which I pay both sides of since I am self-employed, although it is not on every dollar of income), you’re looking at 30-35% effective rates.

So what I think would be fair would be to not differentiate between different types of income for taxation purposes. Just because Mitt Romney uses his investments to make money, and I use my God-given brains and hard working employees to make money, doesn’t mean that my effective tax rate should be 2-3x what his is.

I’m not saying that I pay too much in tax – I’m saying that Mitt Romney pays too little, as a percentage of his income. So do all of the hedge fund managers that are having their income taxed at 15% marginal rates because of the tax code.

So raising the top bracket (~$400k+) to 40%? I think that’s fine as long as Mitt Romney, CEOs, and hedge fund managers all have to pay the same 40%. I’d prefer to see that threshold a little higher, like $500k, but we’re splitting hairs here.

I’d even be okay with a 45-50% bracket for income > $2 million/year.

If Mitt Romney paid $7-9 million in taxes on his $20m in income, I’d feel a whole lot better about this country than the current situation, where he pays less of his income in taxes (as a percentage) than a family of 4 making $30k/year and struggling to feed and house themselves (who are paying [between their employer and payroll deduction] 15.3% payroll tax on every dollar of that $30k/year).

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[dyn99]

And most Republicans want to keep the preferences toward capital gains, dividends and other investment income in our crappy tax code, protecting the fat cats and their single or barely-double digit tax rates.

So that is why I think they’re more interested in keeping their money than they are helping the most vulnerable in our society.

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[redblack]

smitty: when the top 10% has 60% of the nation’s income and 80% of the nation’s wealth, of course they’re going to pay more.

seriously, man. try living on less than the standard deduction per annum, then having a republican start eyeballing you as some kind of freeloader because you don’t pay any taxes; sniveling about what’s fair; and blaming our deficit and debt on the government assisting poor people – whose ranks are still growing despite the miracle that is supply-side economics.

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[redblack]

http://www.taxpolicycenter.org/briefing-book/background/numbers/revenue.cfm

so when we talk about the rich paying a disproportionate share of income taxes, remember that only 42% of the government’s revenue is derived there. so the wealthy pay 60% of that 42%: 25% of total federal revenue comes from income taxes on the top 10%.

now, consider corporate tax rates and how much revenue the government derives from them.

from the link above:

The share of revenue coming from the corporate income tax dropped from about one-third in the early 1950s to less than a tenth in 2010. In contrast, payroll taxes provided two-fifths of revenue in 2010, four times its one-tenth share in the early 1950s.

so, given those stats, i want to know about republicans’ constant insistence that america is a hostile climate in which to do business.

i mean, if 70% of GDP comes from consumer spending, where do you think all of that money goes? and if we buy foreign goods that are made cheaper by “free” trade, that money doesn’t stay in the country.

this should make you reconsider whose deficit and debt we’re carrying right now. personally, i don’t think it’s because poor people are driving around in cadillacs or enjoying steak and lobster dinners with the brandy, cigars, and crack provided to them by the generosity of the american taxpayer.

you should also consider that rich people don’t really consume much more than the rest of us do, so their contribution to consumer spending is fairly insignificant.

without looking up the numbers, that also means that the remaining 30% of GDP is likely corporate spending and capital formation and management on wall street.

why are the people who contribute less to GDP than the rest of us enjoying relatively low tax burdens and 300% gains – while 1 in 6 of the rest of us struggles to find income?

i guess i’m just asking the rank-and-file republicans here to think about how well trickle-down economics is working in the laboratory of the american marketplace, and whether or not this jibes with your definition of “personal responsibility” and job creation.

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[Talaki34]

All things government.

If I ever wonder why nothing constructive happens…

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[Smitty]

“For example, Mitt Romney makes $20m/year and pays 10-15% effective tax rates on his income.”

Just to be clear on this oft quoted number.

Romney paid 15% because all his “income” was derived from investments. Capital gains on money he invested that had already been taxed once when he earned it as income.

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[dyn99]

You are actually incorrect on that statement. Most of Mitt Romney’s wealth was created through compensation as a private equity fund manager.

As a fund manager, his income was taxed as “carried interest”, providing him the ability to avoid higher marginal tax rates on his income. Carried interest is taxed like a capital gain.

http://en.wikipedia.org/wiki/Carried_interest

Then, subsequent profits made from his investments were being taxed as lower rates than marginal income tax rates.

Moral of the story: My income is taxed more as I make it than Mitt Romney’s is having made it twice over. And I make less than 2% of what he does annually.

So, Smitty, how’s that for “fair”?

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[Smitty]

“The reason for this treatment is that a fund manager would make a substantial commitment of his own capital into the fund and carried interest would represent a portion of the manager’s return on that investment. “

Yes. you are correct. It is treated similar to a capital gain since he risked his money similar to a market investment.

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[wakeflood]

With the important caveat that as a vulture capitalist, the relatively minimal percentage of Bain’s investment in actual dollars was often tied to guaranteed returns by sucking the $ out of the newly vultured companies’ coffers and gained back via “management fees”. Nice work if you can get it. Oh yeah, he borrowed from Mexican drug cartel money to get started, didn’t he? Must have known he was going to make a killing to get into bed with them.

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[dyn99]

I invest substantial amounts of my time and money into my business, yet the income created by it is still taxed as ordinary income.

I even have to pay tax on profits that I “make” but don’t distribute. So I’m paying tax on phantom money that I never see.

There is little difference between carried interest and a business owner’s retained capital.

But carried interest is taxed at roughly half the rate.

That’s crap. I can’t believe you’re defending the stupidity of this, Smitty.

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[HMC Rich]

God I wish I had more time to refute your voodoo incantations. Some of it I certainly believe but other posts do not hold water.

Dyn99 Percent, you were complaining that Republicans care more about themselves than the “needy” in society.

Let’s use the current President and VP compared to the former candidate Romney. OoPS, Romney gave more. Greedy Bastard.

How about Bush Cheney? Ooops, Bush Cheney gave way more. Glass houses baby, Glass houses.

Shouldn’t the 1% give more to the rest of us? And look those Republicans gave more than the Democrats. How about that?

Anyway. I need to have the time to refute all or most of JoB’s post attacking Republicans. But I don’t have enough time.

Although I did agree with most of the Dyn99 percent post regarding what congress should do. Not all of it, but I agreed with a lot of it.

I do believe there are many areas where we can come together. Cue Beatles

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[HMC Rich]

Full Disclosure. Concerning the posts right before my tongue in cheek post. Above my pay grade. I can’t get into that argument. Sadly I do not have the financial expertise nor the time to research it. Have fun boys and girls arguing that but I am staying out of it. Now I will argue some other areas on the blog. As JoB and others can attest to, if I meet you in person, I don’t argue politics. I like to get to know the person. I can argue politics on the blog. ‘

Happy New Year.

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[Talaki34]

Bill Moyers website. Interview with Jacob S. Hacker and Paul Pierson. Book ,“Winner-Take-All Politics, How Washington Made the Rich Richer-And Turned its Back on the Middle Class.

On Winner-Take-All Politics

No political party has clean hands.

Until we are able to find common ground, the drain on everyday Americans will continue and then it will be too late. The “Powers That Be” and their political cronies have only to sit back and wait.

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[redblack]

rich: pick me! pick me! post 38…

in response to the comment about lord willard’s charitable contributions, i have two comments. the first is that he has to pay tithes to the church of LDS, and he calls that charitable giving. the second is that charitable donations are tax deductible.

what i’m saying is that i don’t believe his motives are altruistic.

like dyn99 said, see some of jesus’ comments about rich people. they rarely behave as the bible instructs them to.

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[JoB]

i question whether we understand the difference between charitable deductions as defined by the IRS and charitable giving?

donations to a church organization are not used dollar for dollar to assist the needy…

unless of course you belong to the rare church where that is true.

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[Vstrom]

There are Republicans in Seattle? ;)

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[dyn99]

Hey Smitty,

Take a look at this:

http://finance.fortune.cnn.com/2013/01/02/democrats-romney-loophol/?iid=HP_LN

This is the kind of BS I am talking about. Do some more reading on carried interest. See what you think about that income being taxed at now 60% of the rate that my income is taxed at…

I suppose 60% is better than 45%, but still not good enough in my mind.

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