Wednesday, January 25, 2012

TAXING THE WEALTHY: A QUICKIE

I like numbers. Here are a few I gleaned from the media this week about taxes and some famous wealthy people. And btw, don't get me wrong, I have nothing against wealthy people in general.

Mitt Romney 2010 income tax return:
Income:  $20,000,000 approx.
Taxes paid: $3,000,000
Tax rate:  13.9%
Charitable donations:  $3,000,000 (15% of income)

Barack Obama 2010 income tax return:
Income: $1,800,000 approx.
Taxes paid: $454,000
Tax rate: $26%
Charitable donations: $250,000  (13.9% of income)

Newt Gingrich 2010 income tax return:
Income: $3,100,000
Taxes paid: $994,708
Tax rate: 31.6%
Charitable donations: $80,600 (2.6% of income)

What do I think about this? Mr. Romney makes a lot of money - good for him. Because most of his income is returns on investments - or capital gains -  it is taxed at a rate of 15%. This is the standard rate for this kind of income, and I think it was established during the G.W. Bush years.

Mr. Obama and Mr. Gingrich make good money also, and they each pay taxes in the 30% range, which is where many Americans are.

I'm a bit shocked that Mr. Gingrich seems a bit stingy with his charitable donations, paying well below the national average for people in his income bracket.

Now, what if wealthy folks like these three were taxed as much as 5% more on their income per year? Here is the additional amount they each would pay:
Romney:  $1,000,000
Obama:   $    90,000
Gingrich: $   155,000.

Would this extra amount break these people? Hardly. Would the extra tax mean that they would each create fewer jobs (a favorite "fact" of the Republicans)? Well, not directly, because these guys don't create jobs. Maybe indirectly in terms of them spending less money and thus less demand for goods translating into fewer jobs? Nope - they each would be left with plenty of cash to spend. So why don't we want to rescind the Bush tax cuts on these guys and help reduce the federal deficit?

Making money and being wealthy isn't a crime, and neither is paying taxes based on the government tax code. The issue here is the lack of a level playing field for all Americans, and the rightness of asking the more fortunate to pay their fair share.

1 comment:

Marc Alan FIshman said...

I think the American people, the majority of them at least, would LOVE to tax the rich more. You are right, it won't "break" them. In fact, I dare say at some point, with that much money, they wouldn't "hurt" unless it was stolen ala The Beagle Boys vs. Scrooge McDuck.

The fact is, he with the money is he with the power. And when your money buys you the bests money men to invest, and earn those capital gains... You end up like Mitt. Filthy Rich. I don't begrudge the man his due. But I sure wish he, and every other multi-millionaire was taxed far higher than they are.

Those with the wealth control those in power through donations, favors, and generally "dirty" tactics. And while our government still uses antiquated systems like the electoral college, and these massive tax cuts for the wealthy? It will stay that way.

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