Mitt Romney's Income Was Not Taxed at the Corporate Level (No double taxation)

[HiPointDem]

I really don't want to waste my time talking about Governor Romney's tax returns, but come on folks. He was asked on 60 Minutes about whether it was fair that he paid a 14 percent tax rate on his income, compared to the much higher tax rate paid by many middle income families. According to the Huffington Post's account, he responded by saying:

"It is a low rate, ... And one of the reasons why the capital gains tax rate is lower is because capital has already been taxed once at the corporate level, as high as 35 percent."

If the question is why does Mitt Romney pay a low tax rate, this answer is wrong. The bulk of his income comes from Bain Capital. Bain Capital is organized as a partnership. This means that income is not taxed at the corporate level. It is only taxed when partners like Mitt Romney receive it. So the story of double taxation simply does not fly in Romney's own case.

http://www.cepr.net/index.php/blogs/beat-the-press/mitt-romneys-income-was-not-taxed-at-the-corporate-level

[pnwmom]

1. K & R. n/t

[Vincardog]

2. I would love every dollar to have a stamp on it so that when it is taxed it it can be marked and we

would know that it is forever more exempt from taxation. In Willard's world this would be true.

[cojoel]

3. Capital Gains Tax is never taxed at the corporate level

That is a tired old argument on why Corporate Dividend payments to shareholders should be taxed at a lower rate. But since so many corporations pay no tax that is also a canard.

Capital Gains Tax is earned when the value of something (such as stocks) go up and a profit is realized. It involves something you already own. There may be correlations between profitability, dividends, and so forth, with the value of a corporate stock, but it never involves direct taxation of stock price gains.