Why Do Republicans Castigate the Poor and Unemployed?

And why aren't the top percent's capital gains taxed as regular income? And why do they accuse the poor and unemployed of waging a class war against the ultra-wealthy?

Let's briefly review a few of the millionaire's, billionaire's, and Republican's talking points regarding a fairer tax code:

• "We don't want to raise taxes on anyone."
• "The rich pay more in taxes than anyone else."
• "We shouldn't be taxing the job creators in a bad economy."
• "We don't have a revenue problem, we have a spending problem."
• "45% of all Americans don't pay any taxes at all."
• "If you raise my taxes, I might have to quit my job." - Bill O'Reilly
• "Taxing capital gains is double taxation."
• "Taxing millionaires will kill their ambition and discourage investment."
• "Raising taxes on millionaires is punishing success."
• "Taxing the rich and giving to the poor is a redistribution of wealth."
• "Raising taxes on the rich is a form of socialism."
• "Exploiting tax loopholes isn't tax evasion, it's avoiding taxes."

Mitt Romney recently used the old argument of "double taxation" because corporations pay a corporate tax before allocating personal income to their top executives (salaries, bonuses, stock options, etc).

In 1921 was when capital gains were first taxed at the preferential rate of only 14.5%, and they went to their highest rate in 1977 when they were taxed at 49%. Today they're only 15%, thanks to the Bush tax cuts - - about where they were 90 years ago when the tax code was first changed to no longer tax capital gains as regular income.

Congress understood this part of the tax code for almost a century. The working-class has been hoodwinked all this time. Mitt Romney doesn't even come close to a ranking on the 2011 Forbes Fortune 400 list, but he and almost everyone else in the top 1% has been paying a lower tax rate than almost everybody else has been for many decades.

But now that we know this, millionaires, billionaires, and Republicans like to tout that 45% of all Americans pay no taxes at all. That's a flat-out lie. This 45% they're referring to are those who earn less than $27,000 a year, when the poverty line for a family of four is $22,314. With child credits and other personal deductions, they might not be obligated to pay federal income taxes, but they pay many other taxes through consumption.

Most people in this very low income bracket spends almost ALL their income in "personal consumption" for the very basic necessities. And guess what? Millionaires, billionaires, and Republicans want to impose a consumption tax (e.g. flat tax or VAT tax) on them too! Unbelievable!!!

Now in 2011 we have 30 million under or unemployed Americans and another 75 million earning near poverty wages. Millionaires, billionaires, and rich Republicans are now complaining because very poor people don't have to pay taxes. That's just like calling paraplegics lazy and complaining about them not having to go to work! Crazy!

Besides, I thought they didn't want to raise taxes on "anyone". But instead, the very rich would rather deny those with so little, just so that those with so much, wouldn't have to pay a little more. That's just plain disgusting and immoral! It's nothing more than raw greed. When is enough ever enough for these people? And when is it ever too much?

In 2010, notes Syracuse University tax expert Len Burman, Americans making over $1 million that year earned $258 billion just in capital gains...and they all paid Mitt Romney's very low tax rate.

John Hammergren, the top exec at the California-based McKesson, pocketed $145 million last year after cashing out stock options. He pays a lower tax rate on capital gains while not even breaking a sweat -- less than someone else that's earning $35,000 a year breaking their back.

JPMorgan filings last week revealed CEO Jamie Dimon will receive $17.6 million in stock awards for 2011, a little boost from the $17.1 million in stock he grabbed in 2010. Can you say a 15% tax rate?

Also at JPMorgan: the head of investment banking, James E. Staley, was granted restricted stock valued at $7.8 million and he has options valued at an added $2 million. Mary E. Erdoes, head of asset management, received restricted stock valued at $7.1 million and a further $2 million in options. All pay the very low15% tax rate.

Morgan Stanley’s CEO James P. Gorman will receive $9.7 million in deferred compensation for his work last year, according to a regulatory filing. This number includes $4.7 million in deferred cash and equity linked stock and an additional $5 million in restricted stock. In 2010, Mr. Gorman received $7.4 million in stock and his total compensation for the year was $14 million (taxed at 15%) These numbers also include Mr. Gorman’s base salary of $800,000 (only this part of his salary might be taxed as ordinary income after deductions).

Other senior executives at Morgan Stanley: The wealth management chief, Gregory J. Fleming, and Paul J. Taubman, co-head of institutional securities, were both granted restricted stock valued at $3.4 million. Colm Kelleher, the other co-president of institutional securities, received restricted stock valued at $1.9 million. His grant is less because he is based in Britain and there are different requirements on the mix of his pay. Ultimately, he will receive the same as Mr. Fleming and Mr. Taubman, a company spokesman said. Morgan did not release how much deferred cash these senior executives will receive.

Citigroup also disclosed that its CEO John P. Havens received a stock award valued at $3.47 million. Its consumer banking chief, Manuel Medina-Mora, got $2.64 million and its chief risk officer, Brian Leach, received an award valued at $2.36 million, according to regulatory filings. All of them pay a 15% tax rate (the middle-class pays the higher 25% tax rate).

Look at our defense industry: Lockheed Martin CEO Robert Stevens earned $21.9 million, Northrop Grumman CEO Wes Bush reaped $22.8 million, and Boeing CEO James McNerney cleaned up with $19.4 million...ALL IN ONE YEAR...and they all only paid 15% for taxes on their stock options for "performance" compensation.

In 1963 the highest marginal income tax rate was 91% on base salaries or wages earned as "regular income", today most of the top 1% use this "capital gains tax loophole" to avoid paying the higher tax rate of 35% for the top marginal rate by paying the lower 15% capital gains rate.

In all fairness though, one rich man had whined that he had to pay an effective personal income tax rate of 53 percent last year -- and he would favor a flat tax. Blackstone Group LP Chairman Stephen Schwarzman said he was taxed at 36 percent by the U.S. and 17 percent by state and local governments (but we all have to pay state and local taxes, even those poor people I mentioned earlier.)

Schwarzman was paid a $350,000 salary last year, but he didn't receive any stock options or a bonus that year.

But what Schwarzman didn't say was that he owns about $399.2 million worth of Blackstone vested stock, and the value of his unvested stock was worth $544.7 million. When Schwarzman cashes out, he will only have to pay the lower tax rate of 15% for capital gains.

Stephen Schwarzman was ranked 169th on Forbes magazine’s list of the world’s richest people earlier this year, with an estimated net worth of $5.9 billion. Poor guy. He had to pay the regular top marginal tax rate last year....boo-hoo.

But yet, the rest of us will either have to pay a higher tax rate than he does if we earn $35,000 a year -- or unless you're very poor and not have to pay any federal tax at all. But then you'd be envied and castigated by the very rich.

Poor Mitt Romney...his $370,000 in speaking fees last year (that he says, "wasn't very much") might have been taxed at 35%...because it wasn't a stock option, a SWAG investment, carried interest, a gift, an inheritance, a generation-skipping estate, a trust find, or a capital gain...it was just plain old ordinary "earned" income...like we earn.

Obama suggested that anyone earning more than $1 million a year should be taxed at 30%...which would also mean lowering the top marginal rate of 35% for regular earnings over $380,000 a year.

Yet all the millionaires, billionaires, and Republicans want ALL their capital gains to be taxed lower than the current 15% rate. Herman Cain had wanted them to be taxed at 9% in his 9-9-9 Plan. Mitt Romney and Newt Gingrich wants capital gains taxed at ZERO percent!

I like Obama's tax plan much better. Maybe then we can pay off the national debt and save Social Security. And the ultra-rich can castigate me all they want to, I wouldn't care. We would have won a battle in the "class war" that the uber-rich has waged against us over the past several decades by bribing lobbying our congress for preferential tax rates.

The millionaires, billionaires, CEOs, bankers, and Republicans have accused Obama of waging a class war and "dividing" the country. Dividing the 1% and 99%? The Republicans have always divided the county...the rich against the poor, the middle-class against the working-class, and the whites against the African-American and Hispanic communities.

In reality, it's always been the millionaires, billionaires, and Republicans who have been guilty of waging class war and dividing the country...and castigating the poor, the unemployed, and me.

More posts on Mitt Romney:

• Mitt Romney Comes Clean
• Mitt Romney, the Forbes Fortune 400, and Taxes
• How Mitt Romney & the 1% Evades Taxes
• Mitt Romney - Mister 15% and Platinum Parachutes
• Efficiency expert Mitt Romney: "You're expendable."
• Mitt Romney Knows Envy Better than Anyone
• Mitt Romney Connected to $8.5 billion Ponzi Scheme
• For Mitt Romney, the Joke's on Us
• Mitt Romney was the real-life Gordon Gekko

My related Posts:

• How the 1% Bilks the 99%
• Investment versus Speculation
• The "SWAG" Economy of the 1%
• Mitt Romney Knows Envy Better than Anyone
• Mitt Romney Connected to $8.5 billion Ponzi Scheme
• GOP Claims Tax Evasion as Excuse to Cut Taxes
• For Mitt Romney, the Joke's on Us
• Subsidies for the Rich and Famous
• Historical Tax Rates on the Rich (1862 to 2011)
• The Second Gilded Age: History Repeats Itself
• Mellon: The Banker Who Rigged the U.S. Tax Code
• The GOP Tax Plan - Ignorance, Insanity, or Greed?
• We have a Revenue Problem, Not A Spending Problem
• 280 Corporations are "Too Big to Tax"
• Trickle-Down Economics: The Cruel 30-Year Hoax
• You Pay Hidden Entitlements for the Rich
• Record Profits + Record Bonuses = Zero Jobs
• Low Wages Kills Jobs, Not High Taxes
• Trade Agreement Passes in Middle of Job Crisis
• Apple Inc. is Rotten to the Core
• America's Race to the Bottom
• Corporations & Banks Now Sit on $3.6 Trillion
• Who will "Live Free or Die" with FREE MARKETS in 2012?

Other Related Outside Articles:

• "The richest 1 percent have more financial wealth than the bottom 95 percent combined."
• The total net worth on the Forbes 400 List marks $1.5 Trillion in 2011
• The Global Super-Rich Stash: Now $25 Trillion
• Historical Tax Rates and Time-line
• Capital gains from Citizens for Tax Justice
• 1977 - 2007 tax rates from U.S. Treasury
• Economic Policy Institute on capital gains taxes
• Capital gains explained from U.S. Internal Revenue Service
• The great corporate tax scam

Mitt Romney Connected to $8.5 billion Ponzi Scheme

According to a recent New York Times/CBS News poll, an astounding 66 percent of Americans said the nation's wealth should be more evenly distributed. A similar majority believes the rich should pay more in taxes. And 69 percent of respondents said Republican policies favor the rich.

According to a Wall Street Journal/NBC News poll, even a majority of people who describe themselves as Republicans believe taxes should be increased on the rich.

It's no wonder that guys like Mitt Romney and Herman Cain (and virtually all Republicans) want to repeal the Frank-Dodd Act and want LESS financial reform since our economy collapsed in 2008...even knowing that the banks have been ripping us off.

But they (the 1%) have been very busy making some very serious controversial news lately.

Yesterday we heard about Herman Cain's other big scandal regarding campaign contributions and a possible IRS violation. Today two more big stories broke.

The first is about Jon Corzine, former New Jersey Governor and senior partner at Goldman Sachs, who ran MF Global and has just filed a $41 billion bankruptcy - the eighth largest bankruptcy in U.S. history. Lehman Brothers filed the biggest bankruptcy in U.S. history in September 2008. The S.E.C. is also investigating an estimated $750 million in missing funds from MF Global. Read: "MF Global Bankruptcy Rattles Wall St. Firms"

The second story is about Presidential candidate Mitt Romney and his son's connection to an $8.5 billion Ponzi scheme. This story was first posted by Lee Fang at ThinkProgress.Org

As Robert Reich writes today for the Huffington Post: "Instead of lionizing the rich, we're beginning to suspect they gained their wealth by ripping us off."

Tagg and Mitt Romney at a basketball game.

Nov 1, 2011 - Mitt Romney and his son Tagg, and Romney’s chief fundraiser, Spencer Zwick, have extensive financial and political ties to three men who allegedly participated in an $8.5 billion Ponzi scheme. A few months after the Ponzi scheme collapsed, a firm financed by Mitt Romney and run by his son and Mitt's chief fundraiser, partnered with the three men involved with the Ponzi scheme and created a new “wealth management business” as a subsidiary.

In an exclusive interview with ThinkProgress, Tagg Romney confirmed their business relationship, but falsely claimed that the men were cleared of any wrongdoing associated with the Ponzi scheme. Tagg Romney told ThinkProgress that his three partners collected about $15,000 from their involvement in the Ponzi scheme. Court documents obtained by ThinkProgress show that the legal proceedings are ongoing and the men made over $1.6 million selling fraudulent CDs to investors.

The Ponzi Scheme

In 2009, prosecutors announced charges against the Stanford Financial Group, which managed a portfolio of $8.5 billion, for running a “massive, ongoing fraud” against its investors. The Ponzi scheme bust was one of the largest in recent history, second only to Bernie Madoff. The Stanford Ponzi scheme wiped out the savings of thousands, including many American retirees across the country. In Texas, 1290 people lost their retirement savings because of the Stanford Ponzi scheme; in Louisiana, several hundred reportedly suffered the same fate.

The Romney Business Connection

Solamere Capital, the investment company founded by Tagg Romney with seed money from his father, Mitt Romney and other investors. Launched in 2008 by Romney’s son Tagg and a few others, including Mitt Romney’s chief fundraiser Spencer Zwick, Solamere Capital is a “fund of funds,” meaning that it primarily invests in other investment companies, like private equity groups.

Mitt Romney himself made a $10 million initial seed investment in Solamere Capital and Romney's personal financial disclosure forms reveal that he has received between $100,000 and $1 million in returns from his stake in Solamere. Romney has come under fire for refusing to release his tax returns, which would likely reveal additional details about his financial relationship with Solamere Capital.

Solamere Capital (Boston) > Solamere Advisors (Charlotte, North Carolina)

After news of the Ponzi scheme precipitated the collapse of Stanford in 2009, Tagg Romney partnered with several of Stanford’s North Carolina executives to start a firm called Solamere Advisors. At least three prominent brokers who had worked for Stanford — Tim Bambauer, Deems May, and Brandon Phillips — joined Tagg to help run Solamere Advisors, a wealth management business located in Charlotte, North Carolina. “We are excited to be associated with such a highly capable group of financial advisors with a proven track record of meeting the needs of their clients throughout the Southeast,” said Tagg in a press release announcing Solamere Advisors, which borrows its the name from its parent company, Solamere Capital.

The Romney Campaign Connection

The Romney campaign and the Romney family investment company are deeply entwined. A recent Boston Globe investigation found that top donors to the Romney campaign have invested into Tagg’s firm, and that Romney’s star campaign fundraiser, Spencer Zwick, doubles as a managing partner for Solamere Capital. The Romney campaign has paid Zwick’s firm, SJZ LLC, over $2 million in fees this year alone. Mitt Romney’s brother Scott Romney is listed as a senior advisor to Solamere Capital.

Tagg Romney Defends Partners, Falsely Claims They Were Cleared Of Wrongdoing

In an interview with ThinkProgress after the CNN debate in Las Vegas, Tagg said he was proud of his investment with Solamere Advisors, the wealth management firm now run by Stanford’s former executives. “They’re friends of ours, they use the [Solamere] name, we own a piece of them,” he said. “We helped them get started.” Romney’s son said he owns a minority stake in Solamere Advisors, but noted that they operate with some level of independence. “We don’t control them at all, we just own them,” he explained.

The Solamere Advisors website [once listed] Bambauer, May, and Tagg Romney among the directors of the firm, but have since been conspicuously removed. (Eric Scheuermann, a managing partner for Solamere Capital, is also a director of Solamere Advisors). The Solamere name comes from “a private community in Deer Valley, Utah, where Mitt]Romney owned a ski mansion,” reports Globe writers Michael Kranish and Donovan Slack.

Tagg Romney had spoken to ThinkProgress for a few minutes while walking around the Venetian hotel after the GOP presidential debate.

“Did you know that some of those guys were in with, there were allegations that some of those guys were involved with the Allen Stanford Ponzi scheme?” ThinkProgress asked him.

Tagg replied, “Before we invested in them, they were in that. But they were cleared of that before we made our investment."

Solamere Advisors, a wealth management firm employing brokers who allegedly participated in the Stanford Financial Group Ponzi scheme. Tagg Romney helped found Solamere Advisors with an investment from Solamere Capital.

ThinkProgress also asked about the allegedly fraudulent profits made by Tagg's partners in helping orchestrate the Stanford Financial Group Ponzi scheme and the current effort by Stanford’s victims to retrieve their money.

In response, Tagg claimed that his colleagues are also victims: “They probably made, their pay there was like $15,000 total. Those guys got totally screwed by the whole thing. It almost ended their whole careers because they moved all their clients over [to the Stanford Financial Group], and then the place was shut down two months after they moved their clients over. They hadn’t made any money yet. They had bonuses and everything promised to them, but they didn’t make any of their money. So they made no money.”

Tagg’s assertions, that his Solamere Advisors partners who were employed in the Stanford Ponzi scheme didn’t make “any money,” and that they their involvement in the Ponzi scheme has been “cleared,” contrasts with court documents obtained by ThinkProgress. According to documents reviewed by ThinkProgess using the Pacer search engine, charges against Tim Bambauer, Deems May, and Brandon Phillips have not been dropped. A recent court filing shows May requesting the court for arbitration instead of going to trial. ThinkProgress also spoke to the deputy clerk for the federal District Court in Dallas, and confirmed that the three men are still defendants in the lawsuit to recover the Ponzi scheme money.

Moreover, a court-appointed audit of the Stanford Financial Group found that several of the former Stanford brokers made far more than what Tagg claimed:

• Solamere Advisors managing partner Tim Bambauer made $1,143,392 in incentive pay selling fraudulent CDs to investors.

• Solamere Advisors partner Deems May made $465,000 in incentive pay selling fraudulent CDs to investors.

• Solamere Advisors operations manager made Brandon Phillips $70,000 in incentive pay selling fraudulent CDs to investors.

The lawsuit filed by the Securities and Exchange Commission claims the Stanford Financial Group built its Ponzi scheme by incentivizing brokers to sell fraudulent CDs with an array of bonuses. A document filed in the District Court of North Texas says that Stanford “used an elaborate and sophisticated incentive program” to encourage brokers, like Bambauer and others, to lure investors into the Ponzi scheme. A suit to recover money for Stanford’s victims declares that Stanford’s former brokers are not entitled to their performance pay because those funds were made in “furtherance of the Ponzi scheme.”

Despite Tagg’s assertion that his partners were innocent and had no idea what was going on, representatives for Stanford’s victims differ. San Antonio attorney Edward C. Snyder, an attorney representing Stanford’s investor victims, scoffed at the notion that Stanford’s brokers did not know what they were getting into. They were “making outrageous fees and commissions from selling and promoting CDs,” said Snyder in an interview with ThinkProgress, adding, “no one makes that kind of money doing that.” As the litigation continues, Synder said he is confident that all of Stanford’s brokers that received performance pay selling CDs “are going to give the money back.” Snyder told us that many of Stanford’s brokers have made the argument that they had no idea what was going on, but he isn’t buying it. “Anyone that was selling a related-company offshore bank CD to his clients, and making such a large percent of commission, should have their license revoked,” wrote Snyder in an e-mail.

Bambauer, hired by Tagg in July 2009 as the managing partner for Solamere Advisors, left the firm two months ago, according to Deems May, who spoke to ThinkProgress last week. Bambauer was a higher level executive at the Stanford Financial Group. The Solamere Advisors website still lists Deems May (but Bambauer, as a director of the firm, along with Tagg, has since removed). A message left with the Bambauer household has not been returned.

Asked about the current effort by the court-appointed receiver to retrieve the commissions received in selling Stanford Financial Group Ponzi scheme CDs, Deems May said he “can’t comment on anything like that.”

Tagg Romney told ThinkProgress that he now only owns a 5 percent stake in Solamere Advisors, but Deems May said to check with Eric Scheuermann, Tagg’s business partner, about the extent of Solamere Capital’s ownership holding in Solamere Advisors. Deem Mays also referred ThinkProgress’ other questions to Solamere Capital, but the firm has not responded to ThinkProgress’ request for comment.

ThinkProgress compiled a chart illustrating the financial connections between Mitt Romney, the Romney for President campaign, Tagg Romney, and the alleged Ponzi scheme brokers. (Click photo to enlarge)

Despite Ponzi Business Connection, Romney Promises To Repeal New Investor Protection Laws

The revelation about Romney’s ties to the Stanford Ponzi scheme unmask the risks associated with removing new investor protections. The Dodd-Frank Wall Street Reform law, a reform Romney says he will repeal if he wins the presidency, attempts to address future Ponzi schemes by enacting new protections for whistle-blowers to alert authorities when they find evidence of fraud. The law also creates a new Investor Advocate and Investor Advisory Committee within the Securities and Exchange Commission to detect and investigate future Ponzi schemes.

Mike Hudson, a reporter with iWatch News and author of a new book about how predatory Wall Street practices created the financial crisis, told ThinkProgress that Dodd-Frank “could be a game changer that helps the SEC identify and shut down Ponzis and Ponzi-like schemes.”

But on the campaign trail, Mit Romney, a fierce critic of efforts to reign in Wall Street practices, has called new investor protections like Dodd-Frank “extraordinarily burdensome.”

When ThinkProgress spoke to Tagg Romeny in Las Vegas, the last question about the Stanford Financial Group Ponzi scheme was this: “How do you prevent a Ponzi scheme like that?”

“Hey guys, we’re done,” Tagg said before taking off.

ALSO READ: Romney-rooted Solamere Capital nears $200M fund

..and they wonder why people are protesting Wall Street and the 1%.