BREAKING - Romney Was Part of 47% Who Didn't Pay Any Federal Income Taxes In 2008 and 2009

[TomCADem]

The amazing thing is that the source of this disclosure is Mitt Romney himself during a debate with Newt Gingrich where he attacks Gingrich's proposal to reduce capital gains taxes to zero. Ironically, in making the attack, Romney admits that he did not pay any federal income taxes!

Does this mean that even Romney will vote for Obama in 2012?

http://www.politico.com/blogs/burns-haberman/2012/01/romney-i-wouldnt-pay-taxes-under-newt-plan-111988.html

The moment came after Newt Gingrich joked about Romney’s 15 percent tax rate, saying: “I’m prepared to describe my flat tax as the Mitt Romney flat tax.”

Romney jumped in to ask: Do you tax capital gains at 15 percent or zero percent?

Gingrich’s answer: Zero.

“Under that plan, I’d have paid no taxes in the last two years,” Romney said, alluding to the fact that all his income is from investments.

[Travis_0004]

1. You miss read it.

He said if Newt's plan became law, he would have paid no taxes, due to the plan of capital gains being taxed at 0%. If he didn't work in 2010, then his only income was from capital gains, but the capital gains tax rate was not 0% in 2010 for high income people.

[Lochloosa]

2. I don't think so. In my book capital gains is not "income" from working.

It's income from investments. "Income" tax is a working person tax. Capital gains is a rich persons tax.

[Travis_0004]

3. Ok, so by your standards he had an income of 0, and paid 0 in taxes.

[progree]

5. Well, I think so. The issue is paying federal INCOME taxes, not federal INCOME-FROM-WORKING taxes nt

[RLBaty]

9. Sounds like that fuss I had earlier today about atheism and semantics!

Income from wages is income.
Income from capital gains is income.
Income from interest is income.
Income from dividends is income.
Income from robbing banks is income.

And on and on it goes.

I think the law actually says this, in relevant part:

http://www.law.cornell.edu/uscode/text/26/61

> 26 USC 61 Gross Income Defined
>
> (a) General definition
>
> Except as otherwise provided in this subtitle, gross income means
> all income from whatever source derived, including (but not limited to)
> the following items:
>
> (1) Compensation for services, including fees, commissions,
> fringe benefits, and similar items;
>
> (snip)
>
> (3) Gains derived from dealings in property;
>
> (snip)

"All income from whatever source derived"

The tax on capital gains is an income tax!
The tax on wages (compensation for services) is an income tax!

Get it!

Sincerely,
Robert Baty

[lumberjack_jeff]

10. For the purposes of taxation, there are two kinds of income. "earned" and "unearned"

Both are subject to income taxes, at different rates.

[TomCADem]

4. Capital Gains Taxes Are Not Federal Income Taxes - Where Are Mitt's Tax Returns?

If Mitt is saying that he would not have paid any taxes in 2008 and 2009 under Newt's plan, then that means he is not earning any income that would be taxes according to the federal income tax brackets that we are all familiar with.

Of course, this is also a reason why we need to see Mitt's tax returns. The fact of the matter is that he stands to receieves millions in benefits from his own proposals, which are heavily weighted toward the wealthy.

http://www.nytimes.com/2012/03/04/business/capital-gains-vs-ordinary-income-economic-view.html?_r=0

Throughout almost the entire history of the United States income tax, the tax rate on capital gains has been lower than that on ordinary income. Today, the top rate is 15 percent for capital gains and 35 percent for ordinary income. There are good reasons for this — including, for example, the fact that capital gains are not indexed for inflation. But put that aside. If we are going to tax capital gains at a lower rate, one question necessarily arises: What is a capital gain, and how can we distinguish it from ordinary income?

The answer seems simple. If you have a job, the money you are paid for your work is ordinary income. If you buy an asset at one time and sell it later for a higher price, the profit you made from holding it is a capital gain.

[progree]

6. Cap gains are declared on federal income taxes 1040 and 1040 Form D.

[Laura PourMeADrink]

7. his new deadline's coming up...October 15 ....26 days? I remember someone asking him when

he would release 2011.....and questioning the fact that he might wait until 10-15....(like kind of advising him that he should get them out ASAP since 10-15 would be too close to the election and crazy tax stuff would be brought up). Obviously, he hasn't listened to that. Bet he won't ever even release...But, surely it will come up during one of the debates, surely

[progree]

15. The last day one can file 2011 taxes without penalty is October 15, 2012

So that's a benign (and plausible) reason for the Oct 15 date. (One must however pay in an estimate of what one thinks he/she owes by the usual April 15, 2012 filing date, and if the estimate is too low, well, there's a penalty. Also, to use the Oct 15 date, one must file an extension by April 15).

I know this because I have an accountant that likes to file in October. I can understand why he can't get everything done by April 15, but it irritates me that he delays and delays until October. I like him and his high quality work, but I've finally begun insisting on getting it done well before the Sept 15 estimated tax payment date. Anyhow, enough about me.

I don't know why Romney wouldn't make getting it done earlier than Oct 15 a priority, as you say, what's in there could be in a lot of news cycles so close to the election. Well, you never know, maybe he gave all his 2011 earnings / income / gains / whatever to the poor and that's going to be the great October surprise that propels him to the greatest and most progressive presidency since FDR. (He was just bullshitting the fat cats about not caring about the 47% in that video so as to get their money and ultimately be Robin Hood with it).

[Laura PourMeADrink]

22. yes...we always extend to 10-15 too..especially since we pay. I have a feeling

that his 2011's are probably pretty clean. Surely, surely, he would not do something funky knowing already what a mess he would create so close to the election. But, he's a stubborn sob....and he might just say. I don't care - bilking the gov't is more important.

[Jeff In Milwaukee]

19. Capital Gains are, in fact, income.

They are taxed at a lower rate because we live in a plutocracy. To get at your original point, the exchange between Gingrich and Romney almost assuredly means that Romney DID pay taxes during the years in question because he had capital gains.

[mary195149]

8. All Romney's Income

came from capital gains which is being taxed at 15%. That is income tax. But with capital gains you do not pay payroll tax since it was not earned income.

[BlueStreak]

11. And you do not pay INCOME TAX on it. You pay CAPITAL GAINS tax.

And that has the special billionaire's rate of 15% and all sorts of other provisions just for rich people, such as loss carry-forwards and so on.

Every tax accountant knows there are tax tables for income tax calculations and these are not used for cap gains. Cap Gains doesn't have a tax table. It is 15%, period.

Calling capital gains a kind of "income tax" is a technical, semantic argument. It most certainly is not what most people think of as "income tax".

[RLBaty]

12. You said "semantic"!

I don't know about most people, but some will be subject to learning that the tax on capital gains is part of the income tax scheme of things that is part of our law.

Call it what you will, but capital gains are income, by definition, and they they are subject to a a tax; which most folks can understand is an income tax.

Simple stuff!

If you want to talk about low rates and/or who doesn't pay income tax; why not take up the problem with "ministers" who have a special law just for them and allows them to exclude from "income" amounts their employers designate as "housing".

The FFRF is challenging that as UNconstitutional.
I'm with the FFRF on that one!

Sincerely,
Robert Baty

[thesquanderer]

13. There is no such thing as "Capital Gains tax"...

...there is just a capital gains rate within the income tax.

Capital gains are a category of income that is taxed at a different rate, but it is still income (money you have received), and the tax on it is still an income tax. Income is, most literally, the opposite of outgo. It is all the money that "comes in" to you, regardless of how or why.

[progree]

14. Its declared on your federal INCOME tax 1040

[font color = blue]Calling capital gains a kind of "income tax" is a technical, semantic argument. It most certainly is not what most people think of as "income tax".[/font]

Do you have any poll results showing that, or is that just what you think and therefore you assume "most people think" the same way? (I think of them as both capital gains taxes and income taxes).

Very probably, some of Mitt's income was/is from dividends (the righties want to reduce taxes on dividends just like capital gains to zero for everyone). Do you consider taxes on dividend income "dividend taxes" instead of "income taxes"? If you get rental income, do you consider the taxes you pay "rental taxes" rather than "income taxes"? If you get income from a job do you consider the taxes you pay "job taxes"? How about "interest taxes" on interest income?

[font color = blue]Every tax accountant knows there are tax tables for income tax calculations and these are not used for cap gains. Cap Gains doesn't have a tax table. It is 15%, period. [/font]

There might be 1% of so of tax accountants who think that the tax rate on capital gains is "15% period". Ones that are drunk most of their waking hours.

People whose income puts them in the 10% and 15% marginal tax brackets pay a 0% tax rate on capital gains. Those in higher tax brackets pay 15% tax on capital gains.

Also, short term capital gains are taxed at the same rate as ordinary income, no matter what marginal tax bracket a person is in.

There's another set of tax rates on gains in collectibles. And yet another set for Section 1250 Property.

Also, there is quite an interaction between capital gains and ordinary income -- both are equally counted in Adjusted Gross Income and thus capital gains can push ordinary income into a higher marginal tax bracket (see the Qualified Dividend and Capital Gain Tax Worksheet). So it's not at all like they are two distinct separate things that just happen to be on the same tax form.

Methinks you and TomCaDem are trying to pull a bunny out of a hat, but there's no bunny. If you or TomCaDem think something from a primary debate months ago, and given a fantastical interpretation, is "breaking news", that will dominate the news for the next 10 news cycles, then I think ... well, never mind.

[TomCADem]

16. Well, It Would Be Great To See Romney's 1040...

...To get a better idea of what he was referring to. Also, what was his effective tax rate if capital gains are only taxes on the actual sale, rather than on capital appreciation. In other words, what is Romney actually paying in taxes?

Romney denigrates people who do not pay federal income taxes, proudly refers to his own tax situation for his political benefit, yet fails to prove it up.

If Romney is not selling any assets, and he is not earning any actual income, what is he paying?

[progree]

24. He apparently had capital gains -- yes, that means some assets were sold (portfolio reshuffling)

[font color = blue]Also, what was his effective tax rate if capital gains are only taxes on the actual sale, rather than on capital appreciation. In other words, what is Romney actually paying in taxes? ... if Romney is not selling any assets, and he is not earning any actual income, what is he paying? [/font]

His assets are held in a blind trust, overseen by a trustee. Any portfolio manager will be doing some reshuffling -- selling some things and reinvesting the proceeds in something else. What is sold is a capital gain (or loss) even if it is reinvested. And it appears some things had to be sold to pay for beach houses and car elevators and Ann's dancing horses and on Ann and don't get me started on Ann!

[font color = blue]Romney denigrates people who do not pay federal income taxes, proudly refers to his own tax situation for his political benefit, yet fails to prove it up. [/font]

Well put

[Travis_0004]

18. There are tax tables for capital gains, they are taxed at 0% for some people.

And I disagree with you. I consider capital gains to be income, since you are making money. You pay taxes on it, therefore its income tax.

[TroyD]

17. I think Rachel Maddow did a pice on this subject last night

There should be a clip from her show available.

She also examined the dodgy background behind Romney's dishonest claims of residing in Massachusetts when he was actually residing in Utah when he ran for Governor.

[Jeff In Milwaukee]

20. I suspect that's one of the reason he doesn't want to release his returns...

He probably has a least one of his umpty-squat houses in a state with no income tax, and he declares that one as his principle address to avoid paying state taxes.

[tavalon]

21. I'd have, not I did

But I'd like to take a look see at those papers myself. 10 years worth of them.

[WI_DEM]

23. I don't think this is really breaking news.