Saturday, July 21, 2012

As Romney Dodged Taxes, Our Net Worth and Pay Declined

Mitt Romney avoided taxes in 2010 by transferring stock in two companies from his personal account to a nonprofit entity he set up, transferring shares of Sensata Technologies, a Bain Capital company currently under fire to offshore Freeport Illinois jobs to China.

While Romney was dodging taxes in 2010, it's being reported that 50% of all American households now hold only 1% of the nation's wealth, while the top 1% holds over a third. The top 10 percent's share was 75%.

As the middle-class shrinks, at this rate there will only be two classes left...rich and poor.

For tax year 2010 almost $1 trillion in personal income was not taxed at all for either Social Security or Medicare. Of that $1 trillion, almost half was taxed for capital gains at the 15% rate instead of the top marginal rate of 35%.

The GOP, the Heritage Foundation, the Cato Institute, the Tea Party, and the Chamber of Commerce (all conservative entities) like to boast that "the top 1 percent of income earners paid 40 percent of all federal income taxes in 2006, while the bottom 50 percent (those who earned less than $25,000 a year) paid 3 percent; while 43 million tax returns filed in 2006 were from people who paid no federal income tax at all."

Fox News ignores the fact that these are the people who are struggling just to survive, and also needed food stamps to eat...those that the Republicans are saying are "gaming the system" and should "put more skin in the game". They never mention that Mitt Romney and the top 1% are the ones who "game the system" with off-shore bank accounts and high-priced tax attorneys.

Fox News says the "top earners already pay enough". Fox News cites IRS figures that show the top 1 percent of earners take home 16.9 percent of the nation's total income, but pay 36.7 percent of the nation's income taxes.

But they always conveniently neglect to mention that a greater proportion of a low earner's incomes goes to discretionary pending (like food and shelter) and to other taxes, such as Social Security. Someone who earns $1 million a year has Social Security taxes "capped", meaning they pay no SS tax at all after their first $110,000 in earnings...whereas most of us pay this tax on 100% on our earnings.

And the top 1% pays ZERO in Medicare taxes on their capital gains from "investment income". They use this savings to invest in their own in-house emergency rooms at a cost of $1 million, while millions of Americans go without access to a doctor and dentist.

The top 1% doesn't have to pay interest to banks over 30 years for home mortgages and car loans, tripling their initial cost (whereas the 1% can pay cash); or if they do, it's for another tax advantage (and at a much lower rate of interest).

Federal income tax rates for middle-class earners earning $50,000 a year (teachers, police, etc) is 25%. A neurosurgeon tax rate is 35%. The top 1% obtains the bulk of their annual earnings through capital gains from stocks and dividends, and pays a tax rate of 15%...the lowest ever since 1921. Under Bill Clinton capital gains was taxed at 28% before he lowered them to 20%, and Bush lowered them to 15% (it used to be over 40%).

The entire tax code is geared to favor the top 1%, and taxes are already historically low for them, but still they want more tax breaks...like an addict who just can't get enough.

The same is true for corporate tax rates. The GOP likes to say it's "the highest in the world", but they never mention that the "EFFECTIVE" corporate tax rate (what they usually actually pay) as about half of that, lower than in China. (Jobs go to China, not for lower taxes, but for cheaper labor and less environmental regulations.)

“There’s class warfare all right, but it’s my class, the rich class, that’s making war, and we’re winning.” - Warren Buffett, 2006. Now why would one of the richest men in the world say that if it weren't true?

People like Mitt Romney aren't part of the solution for the shrinking middle-class, he's the problem. (Read: Mitt Romney's ties to IRS Commissioner. I think they should both be audited for the past 20 years.)

Click image below to enlarge

2 comments:

  1. The Latest on Mitt Romney...

    Mitt Romney REALLY IS the "outsourcer-and chief".

    http://www.motherjones.com/politics/2012/07/mitt-romney-bain-outsourcing-flextronics-jabil-circuit

    6 VERY GOOD REASONS not to vote Mitt Romney:

    http://www.motherjones.com/politics/2012/07/what-is-mitt-romney-hiding

    ReplyDelete
  2. Bud, really good work. Keep up the attack on this enemy of the middle class. Romney must be hiding something really big in his tax returns. He is taking flak from all sides over this issue so whatever he is hiding must be really bad.

    ReplyDelete