Wednesday, February 22, 2012

Obama Tax Plan vs. Mitt Romney's

The two tax plans are almost exact opposites...just like their political ambitions and social priorities - - just like their moral values and empathy for humanity. One tax plan takes into consideration the 99%, the other, mostly the top 1%. You decide who you are, and where you fit, then vote for whoever has your best interests at heart.

Romney wants to cut all 6 current taxbrackets by 20%...this, from a guy who hasn't signed the front of a check by creating jobs, but has instead just been signing the back of a check from his low-taxed income.

Romney claimed his tax plan would not create new deficits because he would limit tax deductions and exemptions for the wealthy saying, "For high-income folks, we are going to cut back on that so we make sure the top 1% keeps paying, paying the current share they're paying or more."

He neglects to mention that those tax deductions and exemptions do not include carried interest or capital gains, but he does mention "we're going to lower our spending" and "fix our entitlements" - - that's how his tax plan "will not create new deficits" - - by taxing the middle class and poor less (and forcing government cuts), but keeping the tax rates very low for millionaires and billionaires, for those whose primary earnings are through income such as carried interest, capital gains, dividends, trust funds (e.g. Kim Kardashian and Paris Hilton), generation-skipping inheritances, gifts, and investments in gold, silver, rare wine, and expensive art (Read: The "SWAG" Economy of the 1% and How the 1% bilks the 99%)

Romney would maintain the current tax rate of 15% on capital gains and dividends for households that earn $200,000 a year or more (the top 1%), keeping the wealthiest American's tax rates extremely low. High earning Americans who are paid through regular wages would pay a 25% rate, and the middle-class would pay 20% (Mitt Romney would still only being paying 15% on his carried interest...he's not raising or lowering his tax rates.)

Mitt Romney would lower the poorest American's tax rate only 2% (from 10 to 8 percent), but lower the top rate 7% (from 35 to 28 percent). In each way, the rich get richer as the poor get poorer because the poor will also have social programs cut in exchange for a little bit lower tax rate. Romney has said his goal is to reduce federal spending to no more than 20% of the economy by 2016, down from a current level of roughly 24%.

This has all happened before, under the Bush tax cuts, where the poor was thrown a bone when the rich enjoyed a more massive tax saving. Doesn't Mitt Romney think poor people can do simple math?

The Obama administration is proposing cutting corporate tax rates from 35 percent to 28 percent, and to 25 percent for manufacturers (just as in China), and calling for an end to dozens of subsidies and loopholes that he says offer tax breaks to companies that move jobs and profits overseas.

Manufacturers would receive incentives so that their effective tax rate could be even lower, while American multi-national corporations with overseas operations would also face an unspecified minimum tax on their foreign earnings - - which this blogger would argue, should also be 25 percent, just like in China. Then we'll see if cheap labor isn't the REAL reason why jobs go overseas.

Treasury Secretary Timothy Geithner said the current business tax system is bad for business and for job-creation and argued that President Barack Obama's plan to reduce corporate tax rates to 28 percent would make the tax system more globally competitive.

Obama's plan would be part of a larger effort to overhaul the U.S. tax system and it dovetails with Obama's call for raising taxes on millionaires (30% on those earning over $1 million a year for the top 1%) and maintaining current rates on individuals making $200,000 or less (the 99%).

But reducing the corporate tax rate from 35 percent to 28 percent would also reduce tax revenues by about $70 billion a year, according to an estimate prepared last October by the Joint Committee on Taxation, the official scorekeeper for Congress. That means lawmakers would have to find about $70 billion a year in tax increases to keep the package from adding to the budget deficit.

In 2010, the corporate income tax raised a total of $278 billion, according to the Internal Revenue Service. That year corporate profits accounted for 14 percent of the total national income, and was the highest proportion ever recorded since 1942 when their was a need for war materials.

On corporate taxes, Mitt Romney has called for a 25 percent rate on all corporations, Newt Gingrich would cut the corporate tax rate to 12.5 percent, and Rick Santorum would exempt domestic manufacturers from any corporate tax at all and cut the top rate 50% for other businesses. Herman Cain had asked for a ridiculously low 9% corporate tax rate in his 9-9-9 plan.

On capital gains taxes, Rick Santorum would lower capital gains and dividends from 15% (which are already historically low) to 12%. Herman Cain had asked for 9%, and Newt Gingrich asked for an unbelievable ZERO taxes on capital gains (no wonder the ultra-rich are giving away millions of dollars at them for their campaigns). But all the Republicans want to make it much easier to starve government programs with reduced government spending.

White House economic adviser Gene Sperling has advocated a minimum tax on global profits. Currently many American corporations do not invest overseas profits in the United States to avoid the 35 percent tax rate. (Again, I would argue this should also be 25 percent, just like in China. Then we'll see if cheap labor is the REAL reason why jobs go overseas).

But Mitt Romney says, "Obama's plan will kill jobs. My plan will create jobs. That's the difference between the two of us." (Oh really?)

Mitt Romney earns millions of dollars every year from his "investments" and pays a lower tax rate than most middle-class Americans, but how many jobs has THAT "job creator" been creating every year for the past 10 years since he left Bain Capital -- ever since he's enjoyed the low tax rates from the Bush tax cuts on his capital gains and carried interest?

Mitt Romney hasn't hired anyone, unless of course, you count his "undocumented" and his under-paid housekeepers. The Republican's reasoning today is, if we tax Mitt Romney the same as any other middle-class taxpayer, Mitt will be forced to hire less housekeepers, cooks, valets, maids, butlers, chauffeurs, and tax attorneys.

In stark contrast, Obama's reasoning is that if we tax Mitt (and all the other millionaires and billionaires) at the same rate as middle-class taxpayers (or just a little more), we'll be able to raise tax revenues to help pay down the national debt and keep vital government services properly funded...such as our military and space programs.

With the highest capital gains tax rate, we sent a man to the moon. With the lowest capital gains tax rate, we had to cut our space shuttle program.

But Mitt Romney, Rick Santorum, and Newt Gingrich wants a tax break for these people, but they've already had a HUGE tax break for the past 10 years! (Ron Paul doesn't want to tax anyone for anything). Remember the Bush tax cuts? How many jobs did that create?

Below: See what these multi-billionaires on the Forbes 400 List can already buy with $1 billion today. And Mitt Romney, Rick Santorum, and Newt Gingrich (and Ron Paul) thinks they all need more tax breaks?!?!?

A $150 million mansion (The Spelling Manor in Los Angeles)

A $2.4 million sports car (2011 Bugatti Veyron Super Sport)

A $600 million ultra-luxury yacht (The 557-foot Eclipse)

A $60 million private jet (VistaJet RETNA), a little more than a Gulfstream G550

A $275,000 bottle of rare champagne - to celebrate your good fortune (Shipwrecked 1907 Heidsieck)

Why would one single human being ever want or need more than $1 billion in personal wealth in their entire lifetime, let alone, more tax breaks? Just so that someone else could be denied food stamps because we lacked the federal tax revenues? Bill Gates has $59 billion, and Warren Buffett has $39 about a few more crumbs for the poorest among us, would that be the Christian thing to do?

But the Republicans don't want to raise taxes on the uber-rich at all! They lamely claim it is "punishing success" and "waging class warfare", when most of us already know that it's us that is being punished, and suffering a class war that's been waged on the middle-class and poor by the Republicans for the past 40 years!

Last year 50% of all American workers earned less than $27,000 a year when the poverty line for a family of four was $22,314 -- but the Republicans think these people should "put more skin in the game"!

Loopholes such as capital gains are taxed at 15%. Carried interest, trust funds, SWAG investments (silver, wine, art, and gold), gifts and generation-skipping estates, annuities, interest (etc.) all get favorable tax rates for the very wealthy. This should ALL be taxed as "ordinary" personal income.

The top 1$ are taxed LESS than the wages you labor for, yet the top 1% is also more prone to evade income taxes too!

READ: The current U.S. tax code: Never has so much been done by so many for so few who need so little.


  1. Today in the Huffington Post

    "In the past three years, 30 of the nation's largest corporations have paid zero federal income tax. Less than 10 percent of total U.S. tax revenue currently comes from businesses. For much of the 20th century, that number was closer to 30 percent. As a percentage of total American economic output, corporate tax collections are at historical lows."

  2. Mitt Romney said his tax plan can't be scored. Romney had previously insisted that his plan to cut marginal individual tax rates by 20 percent won't increase the deficit because he would limit deductions and exemptions for the wealthy. A study by the nonpartisan Committee for a Responsible Federal Budget said that Romney's plan would increase the national debt by about $2.6 trillion, and that wealthier Americans would get more of a tax cut than middle-income earners.