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Published January 23, 2012 More Info »
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Published January 23, 2012

 

On Wounded Romknee

 

Ah - Mitt, trying to shield himself from all that money.

Mitt has gotten his mitts in the ringer lately over the issue of his tax returns and his clumsy handing of the issue more than likely cost him the South Carolina primary.

And is as usually the case, there are many out there mis-characterizing the issue

I find it very taxing.



Brian Kilmeade (pictured on the left)  from FOX and Friends had this to say after the controversy over releasing the tax returns took a turn for the worse for Mitt:


One thing about Mitt Romney - he's rich. And, most people know it. And I guess that's one of the reasons he doesn't want to release his tax returns because there seems to be a war on success in this country.... 


Romney added during the latest debate  - I'm not going to apologize for being successful.  
The litany of those using the above logic along with the class warfare drumbeat is endless. At the end of the day, they are missing the point entirely. In other words - I say bullshit.

Americans don't give a crap if Romney is rich nor is anyone expecting him to apologize for being wealthy. God bless him if he was able to make some scratch. The issue is not how much Mitt made - it was how much Mitt paid (or as we at the blog call them - his re-mitt-tances).

First, Americans don't hate the rich. If we did, wouldn't we hate all rich people? See, no one hates Warren Buffet, Richard Branson, Steven Speilberg, Tom Hanks, etc. etc because they're rich. The FOX and Fiends folks, Rush, Billy O, Sean of the Dead and the rest of the right wing pundits know that. However, we do hate folks who don't pay a fair share of taxes. See, Mitt only pays around 15% on his income because it is primarily derived from investments. Gains on investment are taxed at the capital gains rate of 15%, not the rates most Americans pay of their income.

Here are the 2010 Tax Rate schedules (rounded):

Tax Rate              Single                                   Married

  10%            $0 thru  $8,400                          $0 thru $16,800 
  15%            $8,400 to $34,000                     $16,800 to $68,000
  25%            $34,000 to $82,000                   $68,000 to $137,000
  28%            $82,000 to 172,000                   $137,000 to 209,000
  33%            $172,000 to $374,000               $209,000 to $374,000
  35%            over $374,000                           over $374,000

So, if you are single person, once you make $34K you and Mitt on in the same tax bracket. It's $68K if you are married. 

Now some would say that there are Mitt-a-gating circumstances. For example. ordinary folks get to deduct a lot of stuff from their income like home interest, medical expenses and other items and they get exemptions for their dependents - things you don't get for Capital Gains. Regardless, at the end of the day, over the last decade, Americans have paid an average of between 17% and 20% of their income in taxes. And that does not even account for the 7.65% social security tax that Mitt does not pay on his capital gains.

Now here is where the rubber hits the road - Mitt knows that his wealth isn't the issue - it's his tax rate. The GOP, including Mitt have argued against higher rates for the wealthy, including increases to the ridiculously low capital gains tax. The embarrassment is not that Mitt is rich - it's that he is inadvertently becoming the poster child for what is wrong with our tax system.

When he heard Newt, Perry and Santorum calling for the release of his taxes - you know what was going though his mind (Dudes - we discussed this. You're screwing the pooch here - remember?? - we weren't going to talk about this in front of the children). 

Too late - the cat is out of the bag. It's going to be this simple - why the fuck should one person a rate of 25% on an income of $100,000 and another fella pay a rate of only 15% on income of $100 million dollars - cause we call them different things????? Naw, that ain't going to be good enough anymore.

How about this for my friends who want tax simplification. Let's just call income - income. Get rid of the Capital Gains rate and treat all income as ordinary income and allow those who get their income from Capital Gains to take the same deductions that folks who make ordinary income are allowed. Everyone pays the same rate. Pretty simple I think. I believe that Mitt may not endorse this simplification program. I can just just hear my good buddy James Carville now:

Lookie here - I know that Mitts's so rich he buys a new boat every time his gets wet. But that tain't the issue with me. Ya see - Mitt just really dills my pickles on the tax return thing. He's lying like a no-legged dog. Folks like Mitt got it real good under these Bush tax cuts - but they ain't given any of that up no matter how messed up the country is. Shoot - they'd probably want more. There the types of folks that would gripe even if they were carrying a ham under each arm. Frankly, I think there tax ideas are bout as useful as a pogo stick in quick sand. We need to tax all the garsh darn income the same.

Or - something like that. I do believe this. Mitt may be on wounded knee now - but if he continues to believe it is fundamentally fair that he pays a lower percentage in taxes then most Americans - well, he soon won't have a leg to stand on.

 

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