Mitt Romney pays 15% income taxes, less than middle class

[Freeborn126]

Super-rich Romney admits paying only 15 per cent in taxes

Republican front-runner under pressure to make public his returns ahead of South Carolina primary
David Usborne Author Biography

Wednesday 18 January 2012

Just four days before voting in the crucial Republican primary in South Carolina, Mitt Romney conceded yesterday that he has only been paying about 15 per cent in taxes on most of his very considerable income, a rate far lower than most middle-class Americans are asked to contribute.

After taking a beating from his rivals for his years as CEO of Bain Capital, a private equity firm with a history of investing in companies that variously blossomed or went bust, the issue of his personal tax filings is now emerging as a potentially more dangerous threat to his candidacy. It took centre stage at a fractious candidates' debate in Myrtle Beach on Monday night when he was pressured to agree to make his tax returns public.

"Mitt, we need for you to release your income tax [returns], so the people of this country can see how you made your money," Texas Governor Rick Perry said to rowdy applause from 3,000 people packed into the Myrtle Beach convention centre. "As Republicans, we cannot fire our nominee in September. We need to know now."

If Mr Romney knew the question was coming, he failed before the television cameras to give any kind of comfortable response. Instead, wearing a now familiar clenched grin, he wavered, noting that in the past candidates have only made their filings available in April, tax filing time in America.

"If that has been the tradition, I am not opposed to that, time will tell," the former Massachusetts governor said, managing not to promise anything.

That Mr Romney is fearfully rich is not news. Details in the public domain suggest he has a fortune close to $250m (£163m) which on its own is probably generating another $1m for him each month after taxes. The risk is that he will be seen more than ever as symbolising the great American income divide that has spurred the Occupy Wall Street movement, particularly if he is benefiting from tax loopholes not available to most people.

It is a quirk sometimes known as the "Buffett Rule" after investment oracle Warren Buffett backed efforts by Barack Obama to correct it, saying that he was paying a lower tax rate than his secretary. Professional money and hedge fund managers generally get paid by sharing the profits of their companies rather than with regular salaries and are therefore able to get away with paying the lower 15 per cent tax rate applied to capital gains.

"What's the effective rate I've been paying? It's probably closer to the 15 per cent rate than anything," Mr Romney told reporters after a town hall event.

Monday night's debate offered other moments that did not flatter the candidates or the audience. Some in the hall booed, for instance, at the mention from moderators that Mr Romney's father was born in Mexico. Mr Perry, meanwhile, seemed to risk diplomatic pandemonium in Nato by saying that Turkey is governed by "what many would perceive to be Islamic terrorists". The Turkish foreign ministry made clear its displeasure in a statement yesterday.

http://www.independent.co.uk/news/world/americas/superrich-romney-admits-paying-only-15-per-cent-in-taxes-6291073.html

[Freeborn126]

So let me get this straight, "Conservatives" favor Mitt Romney over all other candidates when he:

1.  Believes in Global Warming/Carbon Tax

2.  Flip flopped on abortion

3.  Would sign the NDAA

4.  Pays less in income taxes than the middle class

5.  Wants to start another war with Iran

6.  Supports the Patriot Act

7.  Supported TARP bailouts

8.  Likes Government mandates and State run healthcare

9.  Get the most campaign contributions from Wall Street than any other repub candidate

10.  Never served in the military

Are people insane???  I mean its basically Obama with a (R) next to his name.

[Soul Crusher]

It's off of capital gains.  What's the issue? 

[dario73]

It's off of capital gains.  What's the issue? 

Don't expect the left wing liberal morons to understand.  Democrats are retards when it comes to economics and tax law.

[Dos Equis]

Super-rich Romney admits paying only 15 per cent in taxes

He "admits" this?  lol . . . . .  Is there some crime here?  His income is derived from investments.  He has been very successful.  How horrible. 

[Soul Crusher]

He "admits" this?  lol . . . . .  Is there some crime here?  His income is derived from investments.  He has been very successful.  How horrible. 

The Libertarian MBA he is 240 does not seem to have paid attention the day they discussed taxation.     

[howardroark]

What's ignored in this 15% capital gains tax rate is the 35% corporate tax that gets taken out of his capital gains. Thus, the effective tax rate on investment is closer to 45% than 15%.

[Straw Man]

What's ignored in this 15% capital gains tax rate is the 35% corporate tax that gets taken out of his capital gains. Thus, the effective tax rate on investment is closer to 45% than 15%.

what did GE pay in corporate taxes last year?

[Soul Crusher]

 

what did GE pay in corporate taxes last year?

Go ask the head of obamas job council.  He should be able to tell you.

[howardroark]

what did GE pay in corporate taxes last year?

Is GE a good example of an average business?

The entire existence of GE relies on producing goods subsidized by the federal government through the tax structure. The average effective corporate tax rate (once deductions and credits are taken into account) is 21%. So after capital gains tax, the investor gets 1/3 of his income taken away by government.

[Straw Man]

Is GE a good example of an average business?

The entire existence of GE relies on producing goods subsidized by the federal government through the tax structure. The average effective corporate tax rate (once deductions and credits are taken into account) is 21%. So after capital gains tax, the investor gets 1/3 of his income taken away by government.

probably a good example of the type of biz where guys like Romney make all their money

[howardroark]

probably a good example of the type of biz where guys like Romney make all their money

Let me get this straight - you are now arguing against government largess?

[240 is Back]

Go ask the head of obamas job council.  He should be able to tell you.

LMFAO!



I think the fact he paid 15% won't be a biggie...

but

During the same press conference, Romney said that he only makes some income from speaker’s fees, “but not very much,” which is money that would be taxed at normal income tax rates. From Feb. 2010 to Feb. 2011, Romney earned $362,000 in speaker’s fees.

I guess these things won't matter too much to GOP voters willing to overlook his support for cap/trade and tarp.

[Straw Man]

Let me get this straight - you are now arguing against government largess?

??

[Dos Equis]

What's ignored in this 15% capital gains tax rate is the 35% corporate tax that gets taken out of his capital gains. Thus, the effective tax rate on investment is closer to 45% than 15%.

Good point.

[howardroark]

EATR = Effective Average Tax Rate

EMTR = Effective Marginal Tax Rate

So when you take the EATR and then the cap gains tax Mitt pays, his average tax rate is almost 40%. That, of course, isn't counting the income tax he pays, which should be in the 35% tax bracket.

[howardroark]

??

You disagree with the fact that GE not only paid no tax on corporate profits, but received money from the federal government. So you are arguing against federal government largess, right? You are disagreeing with the federal government guiding businesses and picking winners and losers, right? You are disagreeing with the tax deductions and tax credits regarding green energy that GE was allowed to utilize, right?

[howardroark]

Half of the story regarding GE is about GE utilizing tax subsidies, mainly regarding tax credits for green energy. The other half has to do with GE moving its profits overseas - because the tax rates are too high in the US.

To me, that seems like a pretty good argument for "broadening the base and lowering the rates," something that 90% of free market capitalists and Republicans want to see happen.

[Fury]

Too much logic, Howard. You probably just ran Straw out of this thread.

[Dos Equis]

Something I posted a while back about corporate taxes:

Article from a year ago.  Just to put the corporate tax issue in context.  The government collects billions in corporate taxes from the ten largest U.S. companies.  If we were to look at all Fortune 500 companies, we'd see the same thing.  We'd also see the same thing from small businesses.  This notion that corporations are not paying taxes is a liberal canard.    


What the Top U.S. Companies Pay in Taxes
by Christopher Helman
Friday, April 2, 2010

As you work on your taxes this month, here's something to raise your hackles: Some of the world's biggest, most profitable corporations enjoy a far lower tax rate than you do -- that is, if they pay taxes at all.

The most egregious example is General Electric (NYSE: GE - News). Last year the conglomerate generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion.

Avoiding taxes is nothing new for General Electric. In 2008 its effective tax rate was 5.3%; in 2007 it was 15%. The marginal U.S. corporate rate is 35%.

How did this happen? It's complicated. GE's tax return is the largest the IRS deals with each year -- some 24,000 pages if printed out. Its annual report filed with the Securities and Exchange Commission weighs in at more than 700 pages.

Inside you'll find that GE in effect consists of two divisions: General Electric Capital and everything else. The everything else -- maker of engines, power plants, TV shows and the like -- would have paid a 22% tax rate if it was a standalone company.

It's GE Capital that keeps the overall tax bill so low. Over the last two years, GE Capital has displayed an uncanny ability to lose lots of money in the U.S. (posting a $6.5 billion loss in 2009), and make lots of money overseas (a $4.3 billion gain). Not only do the U.S. losses balance out the overseas gains, but GE can defer taxes on that overseas income indefinitely. The timing of big deductions for depreciation in GE Capital's equipment leasing business also provides a tax benefit, as will loan losses left over from the credit crunch.

But it's the tax benefit of overseas operations that is the biggest reason why multinationals end up with lower tax rates than the rest of us. It only makes sense that multinationals "put costs in high-tax countries and profits in low-tax countries," says Scott Hodge, president of the Tax Foundation. Those low-tax countries are almost anywhere but the U.S. "When you add in state taxes, the U.S. has the highest tax burden among industrialized countries," says Hodge. In contrast, China's rate is just 25%; Ireland's is 12.5%.

Corporations are getting smarter, not just about doing more business in low-tax countries, but in moving their more valuable assets there as well. That means setting up overseas subsidiaries, then transferring to them ownership of long-lived, often intangible but highly profitable assets, like patents and software.

As a result, figures tax economist Martin Sullivan, companies are keeping some $28 billion a year out of the clutches of the U.S. Treasury by engaging in so-called transfer pricing arrangements, where, say, Microsoft's (NYSE: MSFT - News) overseas subsidiaries license software to its U.S. parent company in return for handsome royalties (that get taxed at those lower overseas rates).

"Corporations are paying lower amounts of their profits in taxes now than in the past," says Douglas Schackelford, who teaches tax law at the University of North Carolina at Chapel Hill. "Other countries have been lowering their rates, but not the U.S."

Mind you, not all global megacorps enjoy such low tax rates. Try to muster some pity for Big Oil. ExxonMobil (NYSE: XOM - News) paid more income taxes than any other U.S. company last year, some $15 billion, or 47% of pretax earnings. Exxon's peers Chevron (NYSE: CVX - News) and ConocoPhillips (NYSE: COP - News) likewise paid out more than half their earnings in income taxes. The oil companies are oddities among the multinationals because many of the oil-rich countries where they do business levy even higher taxes than the U.S.

Exxon tries to limit the tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi. No wonder that of $15 billion in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas.

Likewise, GE has $84 billion in overseas income parked indefinitely outside the U.S.

Naturally the Obama administration wants to put an end to this. It has proposed doing away with tax deferrals on overseas income. If the plan passes, a U.S. company that pays a 25% tax on profits in China would have to pay an additional 10% income tax to Uncle Sam to bring it up to the 35% corporate rate. "Eliminating deferrals would put U.S. companies on an unlevel playing field," says the Tax Foundation's Hodge, "especially if competing with the likes of Germany, which only taxes companies on domestic operations."

Hewlett-Packard (NYSE: HPQ - News) and others among the top 25 state in their annual reports that if Obama's tax measures pass it would mean a certain tax hike, probably amounting to billions of dollars.

Would no more tax holiday for GE really end up helping Mr. and Mrs. Taxpayer? Doubtful. "The average Joe should be in favor of lower corporate taxes," says Hodge, "because ultimately they are paying the corporate income tax. Either as workers, getting lower wages and fewer jobs, or as consumers, paying higher prices, or as retirees, getting lower dividends and earnings on their investments."

In the same vein, JPMorgan Chase (NYSE: JPM - News) Chief Executive Jamie Dimon has spoken out against an Obama proposal to levy a special tax on banks to recoup bailout costs. "Using tax policy to punish people is a bad idea," said Dimon. "All businesses tend to pass costs on to customers."

No. 1: Wal-Mart Stores

Robyn Beck/AFP/Getty Images
Sales: $401 billion
Pretax income: $20.9 billion
Income taxes: $7.1 billion
Tax rate: 34.2%

$1.2 billion of Wal-Mart Stores' taxes are international.

No. 2: ExxonMobil

Eric Thayer/Getty Images
Sales: $311 billion
Pretax income: $35 billion
Income taxes: $15 billion
Tax rate: 47%

None of ExxonMobil's income taxes were paid in the U.S. In 2008 the company's income tax bill was $36 billion.

No. 3: Chevron

David McNew/Getty Images
Sales: $172 billion
Pretax income: $18.5 billion
Income taxes: $8 billion
Tax rate: 43%

Chevron paid $19 billion income tax in 2008. Of this year's taxes, just $200 million were paid in the U.S.

No. 4: General Electric

AP Photo/Paul Sakuma
Sales: $157 billion
Pretax income: $10.3 billion
Income taxes: (-$1.1 billion)
Tax rate: N/A

How Can It Be That You Pay More to the IRS Than General Electric?

GE's financial services unit, GE Capital, keeps the overall tax bill so low. Over the last two years, GE Capital has displayed an uncanny ability to lose lots of money in the U.S. and make lots of money overseas, where tax rates are lower.

No. 5: ConocoPhillips


AP Photo/David Zalubowski
Sales: $152 billion
Pretax income: $10 billion
Income taxes: $5 billion
Tax rate: 51%

ConocoPhillips paid $13 billion in taxes in 2008.

No. 6: AT&T

Justin Sullivan/Getty Images
Sales: $123 billion
Pretax income: $19 billion
Income taxes: $6.2 billion
Tax rate: 32.4%

AT&T's executive officers are eligible to bill the company $14,000 a year for their own income tax preparations.

No. 7: Bank of America

David McNew/Getty Images
Sales: $120 billion
Pretax income: $4.4 billion
Income taxes: (-$1.9 billion)
Tax rate: N/A

How did Bank of America not pay any taxes on $4.4 billion in income? Because of deductions like $860 million in tax-exempt income, $670 million in low-income housing credits and a $600 million loss on shares of foreign subsidiaries. With a provision for credit losses of $49 billion, Bank of America probably won't be paying taxes for a long time.

No. 8: Ford Motor

Scott Olson/Getty Images
Sales: $118 billion
Pretax income: $3 billion
Income taxes: $69 million
Tax rate: 2.3%

Ford's tax rate is so low because of past years' losses from U.S. operations.


No. 9: Hewlett-Packard

Justin Sullivan/Getty Images
Sales: $115 billion
Pretax income: $9.4 billion
Income taxes: $1.75 billion
Tax rate: 18.6%

HP's low tax rate is due to lower tax rates in foreign countries. The company says in its annual report that President Obama's proposals to end tax deferrals on international operations would mean a big tax hike.

No. 10: Berkshire Hathaway


Justin Sullivan/Getty Images
Sales: $112 billion
Pretax income: $11.5 billion
Income taxes: $3.5 billion
Tax rate: 30%


http://finance.yahoo.com/taxes/article/109244/what-the-top-us-companies-pay-in-taxes

[Straw Man]

Too much logic, Howard. You probably just ran Straw out of this thread.

LOL

I'd like to see Romney actual tax return before I pretend that the corporations he's deriving his income from are actually paying that average tax rate (though I doubut that matters to Randians or Tea Baggers on this board)

[howardroark]

LOL

I'd like to see Romney actual tax return before I pretend that the corporations he's deriving his income from are actually paying that average tax rate (though I doubut that matters to Randians or Tea Baggers on this board)

So you agree that the the federal government should:

1. Eliminate subsidies known as "tax expenditures"

and

2. Lower tax rates in order to encourage capital to come back into the United States?

[Straw Man]

So you agree that the the federal government should:

1. Eliminate subsidies known as "tax expenditures"

and

2. Lower tax rates in order to encourage capital to come back into the United States?

I would be in favor of a comprehensive tax reform of both personal and corporate taxes which would mean some increases in some areas and decreases in other

I'm not a Ayn Rand disciple so I don't believe in merely lower taxes/less regulation = benefit to society

[howardroark]

I would be in favor of a comprehensive tax reform of both personal and corporate taxes which would mean some increases in some areas and decreases in other

I'm not a Ayn Rand disciple so I don't believe in merely lower taxes/less regulation = benefit to society

LOL. Stop changing the subject.

Anyone who is aware of what is happening with GE, knows that they do not pay taxes because of two things:
1. The utilize subsidies for green energy and other social engineering objectives.
and
2. They move their income overseas because the US has the highest corporate tax rate in the developed world.

Thus, the solution to the problem you are trying to solve is:
1. Eliminating the subsidies which companies like GE utilize.
and
2. Lowering tax rates till the EATR and EMTR is equal to or lower than the tax rates in foreign countries.

[Straw Man]

LOL. Stop changing the subject.

Anyone who is aware of what is happening with GE, knows that they do not pay taxes because of two things:
1. The utilize subsidies for green energy and other social engineering objectives.
and
2. They move their income overseas because the US has the highest corporate tax rate in the developed world.

Thus, the solution to the problem you are trying to solve is:
1. Eliminating the subsidies which companies like GE utilize.
and
2. Lowering tax rates till the EATR and EMTR is equal to or lower than the tax rates in foreign countries.

changing the subject

I thought this was about Romney and what he paid in taxes?

I'm not a Ayn Rand disciple so you and I won't agree on much of anything regarding taxes, regulation or the role of governement