Romney's Taxes

From Jeff at Protein Wisdom:

The bottom line is this:  counting charitable giving, Romney paid something like 44% to Obama’s 30% (from 2000 through 2011, the Obama’s donated less than 7% of their income to charity; on average, Romney doubled charitable giving).   In fact, throw in Biden’s 1% charitable giving, and it’s quite possible Romney paid as much or near as much as the President and VP combined — and Romney did so while pumping capital into companies to either help fund them or restructure them to make them viable in exchange for profit.  Win win! Whereas Obama and Biden?  They were deciding how much of your money belongs to them, and to whom they should give it once they’ve taken it from you. That was their contribution to the economy: coercion.  And “charity” doled out by them though the money comes from you.

Overall, what the tax returns show is that Romney is a capitalist and a man who believes in Christian charity.  He takes risks and those risks are reflected in the tax rates he pays. He also gives generously to charity — and doesn’t pretend that compulsory collection and redistribution by those who give out other people’s money is at all noble.  It isn’t.  It’s cynical and narcissistic.  Giving of your own free will?  That’s the opposite of coercion.

(Read the rest here)

And another point, which I've made before, but I'll make again because many people don't seem to get it. Romney made most of his income via capital gains. Those capital gains came from investments in companies that paid a corporate tax rate of 35%, so his effective tax rate on that income is not the ~14% annouced, but 49%, since the income was already taxed at the corporate level.

To make it simpler: If I own company X which has income of $1M this year. If I pay myself a salary of $1M, the company will have net income of zero and I will have net income of $1M which I will pay the top 33% marginal rate on, leaving me with $667,000 (ignoring for the purposes of this example, that the marginal rate is not applied on the entire amount, assume that I already have sufficient other income to make this all taxed at the marginal rates). If instead, I leave the $1M at the company, they will pay a 35% marginal rate, leaving $650,000 which they can then pay out as a dividend or reinvest it in the company (which will presumably generate capital gains in the future). If I receive it as a dividend I will then pay the 15% dividend rate on the money, leaving me with $552,500. I am over $100,000 worse off in the second case, the Romney case.

It is why it has been frequently recommended that corporate taxes be completely eliminated and dividends and capital gains be taxed at the full personal income rates (with capital gains, which may represent many years of holding, indexed for inflation). But until this is done, don't publish nonsense about Romney's effective tax rate being 14%.