These payroll taxes (FICA) are not collected on "unearned income", which includes interest on savings deposits, stock dividends, and capital gains -- such as profits from the sale of stock or real estate.
CEOs of corporations like to pay themselves a greater part of their compensation with stock options rather than a regular wage to avoid the higher personal tax rate.
The proportion of total income which is exempt from FICA taxes as "unearned income" tends to rise with higher income brackets -- such as Mitt Romney and everyone on the Forbes Fortune 400 List -- and all those earning over $110,000 a year (because of the "cap" on Social Security taxes).
The bottom 47% that Mitt Romney referred to (those who pay no federal income tax) earn less than $26,363 a year, but they pay FICA taxes on 100% of their wages if they work -- and in many cases, they also pay state, city, excise and property taxes.
And they all pay a greater proportion of their earnings on sales taxes too -- and that's why a flat tax, or a value-added tax, would tax the poor more disproportionately than the very wealthy.
So most of that 47% pay more in payroll taxes than they do in income taxes. And as a percentage of their income, they also pay a greater proportion of their income in other taxes as well.
The rich are different. Mitt and Ann Romney paid virtually no payroll taxes in 2011, because nearly all their income came from investments on which payroll tax was not owed. And most of their federal income tax was paid at the lower rate of 15% for capital gains, not the top marginal rate of 35% if their income had been earned through regular wages.
Because of the current tax code, about $1 trillion a year in unearned personal income from the wealthy is exempt from payroll taxes (Social Security and Medicare taxes) and about $500 billion a year is taxed at the low rate for capital gains instead of the higher rate for regular wages.
But starting next year, high-income taxpayers will pay a little more in taxes. A tax was passed as part of the health care bill enacted by Congress and signed by President Obama in 2010 – the law known as “ObamaCare.”
Married taxpayers with income over $250,000 will pay a 3.8 percent Medicare tax rate on income over that amount, and all income will be covered, including capital gains that make up most of the Romneys’ income. That's why Romney and wealthy Republicans want to repeal "ObamaCare" and extend the Bush tax cuts -- so that they can continue to keep THEIR tax rates LOWER than ours.
This Medicare tax on the rich will in no way alter the top one percent's standard of living, and it will help provide healthcare for those who cannot afford to pay for the ultra-expensive healthcare policies that are sold by insurance companies to the poor (the bottom 47%).
Mitt Romney thinks these people are "moochers" who just want "free stuff". His distain for half the country could not have been made any clearer at that fundraiser last May. And his ultra-rich donors all seemed to be in total agreement with him (They paid $50,000 per person to hear Romney bash the poor).
In other words, Mitt and wealthy Republicans don't want to contribute anything at all to the "moochers" who worked all their lives making profits for the top one percent before they got too old or sick, and could no longer work any more.
Mitt and wealthy Republicans don't want to contribute anything at all to the "moochers" who became disabled in military conflicts after defending the top one percent's interests abroad.
Mitt and wealthy Republicans don't want to contribute anything at all to the "moochers" who had their fair-paying jobs outsourced to China for ever more profits, only to be replaced with minimum wage part-time jobs without healthcare insurance at Staples, Godfather Pizza, McDonalds, and Wal-Mart -- while trying to keep pace with an ever rising cost-of-living.
Mitt and wealthy Republicans don't want to contribute anything at all to the "moochers" (half the country who earn near-poverty or poverty level wages), but instead claim that the bottom 47% prefer to be "dependent on government" and refuses to take responsibility for their lives.
The money that Romney gives to his church charity (of which he is a very high ranking member) does little to help poor non-Mormons, and his generous contributions to the Mormon church does absolutely nothing at all for the funding of roads and bridges, schools, the FDA or the FAA. But because Romney gave to his church, he feels he's done everything to fulfill his moral responsibilities to this nation.
When Mitt and wealthy Republicans complain about government spending, they don't mean the fraud and abuse in the very profitable corporate defense industry that's funded by taxpayers. They really mean healthcare, veterans benefits, and Social Security for everybody in the bottom 47% -- those "moochers" who USED to pay federal income taxes, but no longer do, because now they are too old, sick, and/or poor.
Mitt and wealthy Republicans feel about the bottom 47% the same way aristocrats once thought of the peons, and that's what Romney and his rich friends really think of regular working Americans today. Now Mitt wants to be our king.
Money hoarders like Mitt Romney earned $13 million last year. It would take someone in the bottom 47 percent 4,931 years to earn that much money; but Mitt wants to pay them less in wages and Mitt wants to tax them more -- and all while he himself pays less in taxes.
Revolutions, uprisings, and civil wars have plagued humanity all throughout history because of greedy economic policies such as Mitt Romney's that overwhelmingly favor the very rich.
Who's the REAL moocher?
Leona Helmsley, the very wealthy hotelier who was once known as the "Queen of Mean," was quoted as telling one of her housekeepers, "We don't pay taxes, only the little people pay taxes."
The billionaire was later convicted of 33 felony counts of trying to defraud the government, including mail fraud, tax evasion and filing false tax returns. She served 18 months in prison.
Five years ago after she died at the ripe old age of 87, she left $12 million to a dog named Trouble, her beloved poodle.
Mitt Romney doesn't want to tax these people for capital gains or inheritances, but instead wants to tax low-income Americans to help fund a $700 billion military budget, two wars, and tax cuts for the rich.
Huffington Post: The Romney-Ryan Budget: Who Are the Real Moochers in Their Medicaid Scheme?
Bain’s interest in China dates to when Mr. Romney ran the firm. During a panel discussion at the Federal Reserve Bank in Boston in February 1998, he told of touring an appliance factory in China where 5,000 employees “were working, working, working, as hard as they could, at rates of roughly 50 cents an hour.”
ReplyDeleteMr. Romney also has millions invested in a series of Bain funds that have a controlling stake in Sensata Technologies, a manufacturer of sensors and controls for vehicles, aircraft and electric motors that employs 4,000 workers in China. Since Bain took over the operation in 2006, its investment has quadrupled in value. Bain continues to own $2.6 billion worth of Sensata’s shares.
Two years ago, Sensata bought an operation that made automobile sensors in Freeport, Ill. At the first meeting with the plant’s 170 workers, Sensata managers announced that by the end of 2012 all the equipment and jobs would be relocated, mostly to Jiangsu Province. Workers have staged demonstrations, pleading for Mr. Romney to intervene on their behalf.
Chinese engineers, flown to Freeport for training on the equipment, described their salaries as a pittance compared with Freeport wages. Tom Gaulrapp, who has operated machines at the factory for 33 years, said he fears he will go bankrupt after he loses his job on Nov. 5.
“This goes to show the unbelievable hypocrisy of this man,” he said of Mr. Romney. “He talks about how we need to get tough on China and stop China from taking our jobs, and then he is making money off shipping our jobs there.”
The tale of Asimco Technologies, an auto parts manufacturer whose plants dot eastern China, would seem to underscore Mitt Romney’s campaign-trail complaint that China’s manufacturing juggernaut is costing America jobs.
ReplyDeleteNine years ago, the company bought two camshaft factories that employed about 500 people in Michigan. By 2007 both were shut down. Now Asimco manufactures the same components in China on government-donated land in a coastal region that China has designated an export base, where companies are eligible for the sort of subsidies Mr. Romney says create an unfair trade imbalance.
But there is a twist to the Asimco story that would not fit neatly into a Romney stump speech: Since 2010, it has been owned by Bain Capital
http://www.businesswire.com/news/home/20101001006306/en/Bain-Capital-Completes-Acquisition-ASIMCO-Technologies-Limited