Romney's tax returns

February 2, 2012 4:17 PM

Inside Romney's Tax Returns: A Reading Guide. From ProPublica.
posted by russilwvong (76 comments total)

But as Reuters explains, 14 percent is less than half the top rate on ordinary wages, which can be taxed up to 35 percent.

I need more explanations, because I thought half of 35 percent was 17.5 percent. Someone's hiding 3.5%
posted by twoleftfeet at 4:30 PM on February 2

I need more explanations, because I thought half of 35 percent was 17.5 percent.

And 14 is less than 17.5.
posted by Bookhouse at 4:33 PM on February 2 [16 favorites]

Obama didn't care about the very poor until 2005 when he starting giving more than 1% to charity.
posted by republican at 4:36 PM on February 2 [1 favorite]

hmmmm...republican,

I would think that there are other ways of caring for the very poor other than donating to charity. Being a politician that promotes policies that protect the very poor would be a good example.

Also, the subject at hand is Romney's tax return, an independent variable to Obama's donations or lack thereof.
posted by Tarumba at 4:44 PM on February 2 [8 favorites]

Yeah, way back in the day when he was a community organizer helping improve the living conditions for the poor? TOTALLY didn't care about the poor back then.
posted by darkstar at 4:44 PM on February 2 [23 favorites]

The way everything should work: no one is at fault for anything unless you can prove they're the only one who does it.

Given the choice between paying their fair share of taxes or contributing to charity, I'd rather everyone pay their fair share of taxes.
posted by maxwelton at 4:44 PM on February 2 [2 favorites]

Manwhile, I strongly suspect that, if we were to get a glimpse of Romney's taxes prior to just a couple of years ago, a lot of people would be shocked at just how much lower than 14% he averaged. I'm sure he's made the past couple of years look more palatable. He's running for President, for Pete's sake!
posted by darkstar at 4:46 PM on February 2 [2 favorites]

*meanwhile


jeez
posted by darkstar at 4:47 PM on February 2

hear, hear, maxwelton! Specially because charitable contributions can be made to any organization that advances your own agenda. *cough cough church cough cough*
posted by Tarumba at 4:49 PM on February 2 [3 favorites]

Last week Romney told a crowd in South Carolina: “I get speaker's fees from time to time, but not very much." Turns out his author/speaking fees amounted to precisely $528,871 in 2010, and $110,500 in 2011.

Mitt makes so many gaffes about money that I sometimes get the feeling he's a lost Bluth. He and Lucille should discuss what a banana costs. Then he and G.O.B. could macho about the relative prices of their suits.
posted by 2bucksplus at 4:50 PM on February 2 [8 favorites]

Well, to him it isn't much money. The guy makes my salary in the same amount of time I make $100. I dislike the guy for a multitude of reasons, but I see this as not an indictment of him so much as our awful tax system.

I'm very glad this is happening, but for different reasons than other people perhaps.
posted by OnTheLastCastle at 4:54 PM on February 2 [1 favorite]

Obama didn't care about the very poor until 2005 when he starting giving more than 1% to charity.

Oooooh, look at the shiny thing!
posted by bonobothegreat at 4:54 PM on February 2 [2 favorites]

Yow, he's in the the top 0.006 percent.
posted by octothorpe at 4:56 PM on February 2

I can't decide if it bothers me more that people as rich as Romney get benefits like the reduced tax rate on profits labelled "carried interest:"

Defined in article per WSJ as a share of a partnership's profits (that's $7.4 million in income for Mitt in 2010) that is taxed as a capital gain as opposed to ordinary income. It is a good deal: The top rate on gains held longer than a year is 15%, so the tax on carried interest is usually less than half the top 35% rate on ordinary income. There aren't FICA or Medicare taxes, either.

or that poor people get absolutely screwed with fees and charges and exorbitant interest rates to do simple things like get their income tax refund, secure an apartment lease, cash a paycheck, or obtain a payday loan.

Really, income inequality is already so serious in the US. Must we rub it in in both directions?
posted by bearwife at 4:56 PM on February 2 [5 favorites]

Yow, he's in the the top 0.006 percent.

But.. but... that's so much higher than 1%! I don't know if I can direct my anger onto those titans of industry without being incinerated.
posted by OnTheLastCastle at 4:57 PM on February 2

I understand how he gets taxed less at 14%--that is, I understand the instruments of the tax code that enable him to pay tax at that amount--but I don't understand why anyone, especially on the right, thinks that's okay. In Canada, you pay approximately a total of 22% on your earned income at the lowest tax bracket, above your basic 10K federal/provincial tax credits. Someone making 25K a year would pay 22%, but he pays 14%. On millions.

I mean, I haven't been totally oblivious. I know this happens. But seeing it laid out like that still blows my mind.
posted by Phire at 5:05 PM on February 2 [2 favorites]

Of all the things that irritate me about Mitt Romney, the tax issue that really chaps my hide is that he was able to reduce his taxes by donating millions to the Mormon church over the years. The Mormon church then turns around and funels loads of cash into organizations like NOM and the Prop 8 initiative.

Which means Romney and his ilk are shadow players like the Koch brothers, only promoting socially conservative bigotry.
posted by darkstar at 5:06 PM on February 2 [8 favorites]

He's successful. So he should be rewarded. Unlike the very poor, who should be penalized for their lack of success. This is what Jesus meant when he said "praise the money-lenders, for theirs is the Kingdom of Heaven. Let them and their camels gain easy access to Heaven, and beatitude will trickle down to those in Hell"*

*Jesus didn't really say that.
posted by twoleftfeet at 5:06 PM on February 2 [13 favorites]

0.006% of Americans or .006% of filers? Is he one of the top 18,000 or one of the top 9,000?
posted by Garm at 5:08 PM on February 2

When Obama was giving 1% of his income to charity, he was also making 1% as much as Romney.
posted by Lazlo Hollyfeld at 5:24 PM on February 2

When Obama was giving 1% of his income to charity, he was also making 1% as much as Romney.

Hm. I think you're off by a few percent. Not that it really matters.
posted by The World Famous at 5:32 PM on February 2

You can't spell ROMNEY without spelling R MONEY.
posted by twoleftfeet at 5:39 PM on February 2 [10 favorites]

Those making $10 million or more are in the top .006%. He makes more than twice the cutoff to be in the top .006. He's in the top .002% Roughly.
posted by waitingtoderail at 5:49 PM on February 2

I think you're off by a few percent. Not that it really matters.

Depends on what year you're talking about. In 2000, the Obamas made $240,505. That WOULD be about 1% of what Romney makes (Of course, we don't know what he made in 2000, since he won't release his returns. I'm betting its not too much less).
posted by waitingtoderail at 5:53 PM on February 2

How do their charitable donations matter. I only care that they are paying a fair portions of the costs we collectively incurred defending that cash pile. I don't mind mitt being rich but I do mind subsidizing his corporate jet.
posted by humanfont at 6:42 PM on February 2 [1 favorite]

Manwhile, I strongly suspect that, if we were to get a glimpse of Romney's taxes prior to just a couple of years ago, a lot of people would be shocked at just how much lower than 14% he averaged.

How do you think he got it much below 14%?
posted by planet at 6:46 PM on February 2 [1 favorite]

In Canada, you pay approximately a total of 22% on your earned income at the lowest tax bracket, above your basic 10K federal/provincial tax credits. Someone making 25K a year would pay 22%, but he pays 14%. On millions.

If Wikipedia is to be believed, capital gains are taxed at half the normal rate in Canada. Since that's most of Romney's income, he would also not pay very much in Canada either.
posted by smackfu at 7:05 PM on February 2 [1 favorite]

I wouldn't count 10% of his income going to his church as a voluntary contribution. That's tithing, quite mandatory, the Tax he pays to his Church.
posted by oneswellfoop at 7:12 PM on February 2 [1 favorite]

The Uncanny Valley: What Robot Theory Tells Us About Mitt Romney
posted by homunculus at 7:23 PM on February 2 [1 favorite]

All the resentment against rich people is cute, but if you're hyperventilating, everybody needs to RTFA and pay attention to the details.

Yes, Romney paid 14% in taxes. But that's not exactly unfair. At least not all of it.

You see, it's not like he got a paycheck with a shitload of zeros on it. Most of his income came from "profits, dividends or interest from investments". He made some good investment decisions and got a nice return from it. There was, of course an inherent risk to those investments - hey, he could have lost money. But he didn't. Good for him. These are what capital gains are, and taxing them at a lower rate than wages is a good thing - we encourage people to invest their money.

Not all capital gains are the same though, and THIS is the unfair part. Some of his income came from "carried interest" which basically means "profits, dividends or interest from investments" MADE WITH OTHER PEOPLE'S MONEY. This is basically how hedge fund managers are paid, for example. And when Warren Buffet complains that he pays less taxes than his secretary, this is what he's talking about, not capital gains as a whole.

However, carried interest corresponded to about 30% of Romney's income (I think), so it's not like he cheated the IRS out of a shitload of money and we should go Al Capone on him.

I know, Romney is rich, republican, religious and white, so his very existence is vile. But please, Metafilter, RTFA.
posted by falameufilho at 7:33 PM on February 2 [1 favorite]

Oh, we understand how it works. We just think it's fucking unfair.
posted by snickerdoodle at 7:39 PM on February 2 [8 favorites]

I wouldn't count 10% of his income going to his church as a voluntary contribution. That's tithing, quite mandatory, the Tax he pays to his Church.

He got to spend 10% of his income tax-free on his social club. That is all a church donation amounts to. Want to throw a party? Make it a church mixer, and your party is tax-free. Want to influence elections? Spend the money through the church!

Until the federal government heavily restricts what a church is defined as, I am going to consider tithes as nothing more than tax loopholes. Alternately, I'll establish a religion worshipping myself, and tithe 100%.
posted by explosion at 7:40 PM on February 2 [3 favorites]

These are what capital gains are, and taxing them at a lower rate than wages is a good thing - we encourage people to invest their money.

People need encouragement to invest? I thought people invested to make money.
posted by heathkit at 7:45 PM on February 2 [5 favorites]

Yes, Romney paid 14% in taxes. But that's not exactly unfair. At least not all of it.

A system which taxes methods of earning income that are exclusively available to the super rich at a rate far below those methods which are available to the poor is inherently unfair.

Is Romney a crook? There's nothing to suggest that. But the system is seriously broken. He can't be blamed for taking advantage of it, but that doesn't mean that something is not seriously wrong.

The rich and influential parties lobby for tax law that benefits them. The poor have no lobbying power whatsoever. So tax law favours the rich. It's unsurprising, but it's ethically bankrupt.


I know, Romney is rich, republican, religious and white, so his very existence is vile.

I was going to say something furious in response to this, but instead I will just say that this is deeply unhelpful to productive discussion.
posted by His thoughts were red thoughts at 7:57 PM on February 2 [9 favorites]

falameufilho: Not all capital gains are the same though, and THIS is the unfair part.

It is obvious our opinions differ greatly on the meaning of unfair.
posted by JHarris at 7:57 PM on February 2

These are what capital gains are, and taxing them at a lower rate than wages is a good thing - we encourage people to invest their money.

I'll just note that capital gains in Australia are taxed at the marginal tax rate, and we have no problems getting people to invest.
posted by His thoughts were red thoughts at 7:58 PM on February 2 [2 favorites]

Republican, you could read our replies instead of marking your own comment as a favorite.
posted by Tarumba at 8:10 PM on February 2

taxing them at a lower rate than wages is a good thing - we encourage people to invest their money.

Personally, I've invested a lot of my excess millions in a Swiss bank account. I'm betting that the Swiss franc will outperform the American dollar. This helps my country because...

Sorry. I can't type when I'm laughing.
posted by twoleftfeet at 8:10 PM on February 2

What did Obama and the Democrats do about the tax code, when they had the votes? Romney didn't write the tax code. Yes, he profits from it, but so does Warren Buffet. How come the latter isn't taking flak for the billions that he has racked up, over years. (And now that he has a crapload of cash, he can afford to give a lot of it away to charity and ask for tax reform).

What I see here (it's the Blue, after all) is a lot of knee-jerk attitudes to Romney. I don't agree with many of his positions, but he's one helluva better candidate - by a long shot - than the rest of the GOP clown show. In fact, Romney may be a moderate, in disguise - kinda like Obama was a liberal, in disguise.
posted by Vibrissae at 8:11 PM on February 2 [1 favorite]

Republican, you could read our replies instead of marking your own comment as a favorite.

Some people tag favorites as a fast way to get back to a thread.
posted by Vibrissae at 8:12 PM on February 2

Yes, he profits from it, but so does Warren Buffet. How come the latter isn't taking flak for the billions that he has racked up, over years.

Well, you know, Buffet is all like "I should be paying more in taxes" but Romney is all like, you know, "I don't need to pay a dollar more".
posted by twoleftfeet at 8:14 PM on February 2

>so it's not like he cheated the IRS out of a shitload of money
He does also have overseas accounts in tax havens. While that alone is not a crime, it looks very much like he cheated the IRS
posted by MisplaceDisgrace at 8:14 PM on February 2

I don't agree with many of his positions, but he's one helluva better candidate - by a long shot - than the rest of the GOP clown show.

Being better than a field comprised entirely of stone cold nutjobs is not exactly a high bar.

I, personally, am better qualified to be a world leader than 100% of toddlers. But that doesn't mean I am actually qualified for the role.

For one, I would bring back the guillotine. For crimes against fashion. Like wearing a baseball cap sideways. Or leggings as pants.
posted by His thoughts were red thoughts at 8:22 PM on February 2 [1 favorite]

Darkstar and others upthread, note that Romney carried over a capital loss of $4,884,089 (yes that's 4.9 million) from 2009, and that's one of the tax returns that he's been fighting NOT to release. (Washington Post copy of Romney's 2010 return, page 13, line item 14). That suggests that he took advantage of the down market in 2008 to realize some hefty capital losses and wipe out the bulk of his 2009 income, and his effective tax rate in that year was probably closer to 0% than to 14%. He still had $4.9M in paper losses left over.

Who was it who said the real crime is what's legal?

Yeah, well, I'm sure Romney met all the legal niceties. He has a team of highly paid accountants to make sure of that, and he's running for office for Pete's sake!
posted by RedOrGreen at 8:28 PM on February 2 [2 favorites]

Well, you know, Buffet is all like "I should be paying more in taxes" but Romney is all like, you know, "I don't need to pay a dollar more".

Yeah, but Buffet's dregs equal Romney's entire wealth. Now, all of a sudden, Buffet is a hero. He made his pile, and much of it supporting private equity plays.

What I'm getting at is that we need to hold the Democrats to a standard that they try to transmit in their political memes. The Democrats, and Obama, have done a few good things, but the primary structures that enable the abuse of the middle class remain in place. They remain in place not just because the GOP is fighting against certain kinds of change, but also because the Democrats and Obama are taking money from the same till as the GOP, and thus serving the same masters.

Obama and the Democrats need to be held to a MUCH higher standard than "what we say is more humane". Where is the PASSION for change? Where is the no-holds-barred, fight to the end determination that serious change will require? Or, did the latter go down the drain with "hope"?

Back to Romney: I suspect that we are going to see a very different Romney in the general election. He's not a basket case like the rest of the GOP crowd. Proof of that is that he is not turning on the basket case sector of the GOP.

Even though the whole thing is rigged by wealthy contributors (meaning that Romney and Obama are essentially playing for the same "team" - i.e. wealthy contributors), it's going to be interesting to see how this plays out.
posted by Vibrissae at 8:28 PM on February 2 [1 favorite]

The guillotine might help with the hat thing but it's not going to work at all on the pants
posted by ook at 8:28 PM on February 2 [1 favorite]

Rich people already get to have dinner with their favorite senator anytime they want. Since they get so much power over what the government does, I don't see anything wrong with making them pay 70% of their goddam income to the IRS. I'd still call that fair.
posted by Camofrog at 8:30 PM on February 2 [1 favorite]

Vibrissae, to repeat something from above, Buffet (along with Gates, and a few other billionaires, and Obama and some of the Democratic senators) is advocating for higher tax rates on his own income. Meanwhile, Romney's tax proposal would directly reduce his own tax bill by quite a bit while increasing effective taxes on low income earners.

That's a pretty big difference, I think.
posted by RedOrGreen at 8:34 PM on February 2

Vibrissae: In fact, Romney may be a moderate, in disguise -

Unfortunately that doesn't appear to be the case. Romney is the least extreme of the 2012 Republican candidates. But because the Republican base has shifted so far to the right, Romney's policies are considerably more extreme than Bush's.

Michael Tomasky:

Romney’s proposed tax cut, writes The Washington Post‘s Ezra Klein, is roughly three times the size of George W. Bush’s 2000 proposal. It’s far more regressive—it would actually raise taxes on many working-class people, which Bush did not do—and would add to the deficit a hefty $600 billion. Likewise, Jonathan Cohn of The New Republic found that Romney’s proposed budget would cut at least 14 percent and perhaps 25 percent from every domestic program—on top of the cuts already slated to go into effect as a result of the congressional deal on the debt ceiling.

posted by russilwvong at 8:34 PM on February 2 [3 favorites]

Buffet is a hero. He made his pile, and much of it supporting private equity plays.

Romney started running for political office on his credibility as a "turnaround artist". He's still trying to run on that. He's trying to project the idea that he has some kind of magic turnaround juju that can not only turnaround the Salt Lake city Olympic Games, but also the whole American economy. I call bullshit on this idea.

Romney seems like a nice enough guy, but the notion that he possesses magic economic turnaround magical mojo is utter bullshit. He's not nearly as successful as Buffet, and Buffet disagrees with him.
posted by twoleftfeet at 8:37 PM on February 2

Who was it who said the real crime is what's legal?

Yeah, well, I'm sure Romney met all the legal niceties. He has a team of highly paid accountants to make sure of that, and he's running for office for Pete's sake!

I said that (among others)

As for making money, Romney is playing by the rules. He's not a thief. He's playing by the same rules as the Goldman Sachs personnel who have graced Obama's administration.

Yes, we need to change those rules. Romney will not talk about that. Obama talked about that, and did little-to-nothing.

We'd better wake up to this every four year, Plutocratic shell game, before we're in a lot deeper than we are now.

Romney? Obama? What;s the difference once the end-game results are in.
posted by Vibrissae at 8:38 PM on February 2

russilwvong: because the Republican base has shifted so far to the right, Romney's policies are considerably more extreme than Bush's.

I agree with you, on paper, but it takes more than a Party platform to institute change; it takes a serious, well-led, coordinated effort of the Executive and legislative branches.

This is anathema on the Blue, but I think the word is still out on Romney, and we will never really know what to expect - full bore - until he wins the Oval Office (if that were to happen). I think Romney is very much like Obama - posing right to pick up votes that will win an election, but more a centrist who leans a little more right than Obama.

I am not in favor of many of Romney's policies, or promises, but there is something about Romney that comes across as decent and genuine in a way that I can't quite put my finger on. It's been written that Romney is really an "Independent".

I'm a moderate Independent, with left-leaning impulses on most issues. I don't know that I would favor Romney assigning Supreme Court judges, but then some of the decisions and opinions written by Obama's Bench appointments have from time-to-time surprised me.

It's going to be an interesting race.
posted by Vibrissae at 8:49 PM on February 2 [1 favorite]

As for making money, Romney is playing by the rules.

The rules need to be changed. Romney benefited by doing private equity deals during a fairly expansive economic climate in the Clinton years and he reaped the rewards during the tax-lenient Bush years, but that's not a sustainable model.
posted by twoleftfeet at 8:50 PM on February 2

on top of the cuts already slated to go into effect as a result of the congressional deal on the debt ceiling.

This is not going to actually happen. Congress is introducing a bill to stop the automatic cuts to the Defense budget. Instead there is a proposal to freeze federal workers' pay, and cut 5% of all federal workers. I guess they're not really too concerned about peoples' jobs.
posted by XhaustedProphet at 8:53 PM on February 2

That suggests that he took advantage of the down market in 2008 to realize some hefty capital losses and wipe out the bulk of his 2009 income, and his effective tax rate in that year was probably closer to 0% than to 14%. He still had $4.9M in paper losses left over.

OTOH, why wouldn't you release these? A loss for the year would actually benefit his image, since he could say "this is the downside to relying on investments for your income."
posted by smackfu at 8:54 PM on February 2

The rules need to be changed. Romney benefited by doing private equity deals during a fairly expansive economic climate in the Clinton years and he reaped the rewards during the tax-lenient Bush years, but that's not a sustainable model.


Agreed. The rules need to change. They are not sustainable, but it's very important to note that Obama's key corporate bundler (Goldman Sachs) also profited from those rules. The election - and the attempt to establish differentiated memes on the part of both parties - is a shell game that takes the public's eye off the prize of getting money our of politics, and thus, policy.
posted by Vibrissae at 8:54 PM on February 2 [2 favorites]

OTOH, why wouldn't you release these? A loss for the year would actually benefit his image, since he could say "this is the downside to relying on investments for your income."

Isn't it because he used it to offset his massive gains in the subsequent year?
posted by His thoughts were red thoughts at 8:58 PM on February 2 [1 favorite]

It's been written that Romney is really an "Independent".

Written by Newsmax, a right wing website. Lots of right-wing websites have called Romney a liberal and a leftist too but that doesn't make it true.
posted by octothorpe at 9:00 PM on February 2 [1 favorite]

Tax experts have suggested that Mitt Romney paid no taxes in 2009.

I, for one, demand that Romney release his tax forms from over a year and a half ago!
posted by twoleftfeet at 9:02 PM on February 2 [1 favorite]

That suggests that he took advantage of the down market in 2008 to realize some hefty capital losses and wipe out the bulk of his 2009 income, and his effective tax rate in that year was probably closer to 0% than to 14%. He still had $4.9M in paper losses left over.

Who was it who said the real crime is what's legal?

Maybe. But I'd still rather not have lost the $4.9m.
posted by gjc at 9:03 PM on February 2 [2 favorites]

Is Romney a crook? There's nothing to suggest that. But the system is seriously broken. He can't be blamed for taking advantage of it, but that doesn't mean that something is not seriously wrong.

As Jon Stewart pointed out a few days ago, he and his pals at Bain can certainly be blamed for aggressively lobbying Congress to adopt the very same favorable tax laws he now aw-shucks-ingly luxuriates in.
posted by Rhaomi at 11:16 PM on February 2 [1 favorite]

As for making money, Romney is playing by the rules.

Lawful evil is still evil.
posted by MikeKD at 1:01 AM on February 3 [4 favorites]

From Paul Rosenberg at Al Jazeera English: Mitt Romney, Welfare Queen.
posted by LMGM at 1:31 AM on February 3

What's evil about being successful?
posted by gjc at 7:11 AM on February 3 [1 favorite]

Romney didn't write the tax code. Yes, he profits from it, but so does Warren Buffet.

Maybe so. But Bain and their cronies lobbied HARD for the tax code as it is. Money makes money in their world. That is, as noted above, INHERENTLY UNFAIR.

Carried interest is a scam, pure and simple.
posted by Benny Andajetz at 7:12 AM on February 3

I am not in favor of many of Romney's policies, or promises, but there is something about Romney that comes across as decent and genuine in a way that I can't quite put my finger on. It's been written that Romney is really an "Independent".

I'm a moderate Independent, with left-leaning impulses on most issues. I don't know that I would favor Romney assigning Supreme Court judges, but then some of the decisions and opinions written by Obama's Bench appointments have from time-to-time surprised me.

The fact that you quote Newsmax of all sources is enough to put this idealized version of Romney into doubt, but in every single thing he's said since 2008 (and a lot from before then) he's been anything but a moderate. He is currently running to the right of George W Bush. He wants to kill off Medicare and Medicaid as we know it. His policy statements on the safety nets go farther and hurt the poor more than even Paul Ryan's plans. His tax plans are blatantly generous to the rich and overwhelmingly hurtful to the poor. He opposes gay rights, wants the worst restrictions on abortion, encourages voter suppression, and has no problems with going to war with multiple countries. If elected, he will in all likelihood be dealing with majorities in both houses of Congress that wholeheartedly support pushing all of that as far as it can go. Combined with the opportunity to name anywhere from 1 to 3 SC justices and an untold amount of federal judges, the courts will swing far to the right for at least a generation if not more. Voting and civil rights would be pulled back to historically bad levels at the state and federal levels, making the ability to effect change harder and harder for those on the left. Roe v Wade and Loving v Texas will be distant memories, and in all likelihood we'll see more successful resurrections of the "redefinition" of rape (and associated sexual assaults) and hate crimes the GOP has repeatedly tried to bring up in both the states and in Congress.

Romney is no "Independent" and anyone who claims to be left-leaning should already know this by now, or at the very least that he will serve no more moderately than it will take to make his party and Congressional GOP members happy.
posted by zombieflanders at 7:31 AM on February 3 [1 favorite]

gjc: I'd still rather not have lost the $4.9m.

Sure, of course. But keep in mind that this is purely a paper loss.

Say you bought stock in the dot.com glory days, $5 in pets.com and $5 in amazon. Today your amazon stuff is worth $500 and pets.com is worth $0.10 (all made up names and numbers, obviously). Return on investment so far: 5000%, not bad, even if you have a "loss".

If I (or you, I assume) were to do this and sell both stocks, we'd pay 15% capital gains on the profit on investment ($490.10), but the very rich are not like you (I assume) or me. In Romney's case, multiply everything by 1,000,000; sell the pets.com stuff to realize a $4.9M loss, and pass the appreciated stock to a $100M trust fund for your kids. No capital gains taxes.

Think about that for a second: no taxes on a $100 million trust fund. Nice.
posted by RedOrGreen at 7:45 AM on February 3 [2 favorites]

RedOrGreen- right, but that $100m would also be a paper gain. He never sold the stock, so he never realized any capital gain. And after transferring it into the trust, he theoretically loses the ability to profit off that money.

So, if I follow it right, this is what happened. He had $10. He bought $5 in Amazon, $5 in Pets. Yadda yadda yadda, at the end of the exercise, all he has left is $0.10. And the beneficiary of he trust doesn't have a capital gain because he doesn't have control of the money either. He only has to pay taxes on the money that comes out.

It's the same as us middle class folks and our retirement accounts. We don't owe taxes when it appreciates because we don't have access to the cash. We only have to pay taxes when we once again get access to the cash.
posted by gjc at 8:25 AM on February 3

I think the word is still out on Romney, and we will never really know what to expect - full bore - until he wins the Oval Office (if that were to happen).

I really could not disagree more. He is a man without true internal principles, someone who does what he needs to do to get along in any particular milieu. That is why he has been so willing in this race for the nomination to toss overboard prior positions like being pro-choice. And if he is elected, he will be catering not to the Massachusetts Democratic majority who made him a centrist governor, but to the rabid rightists who represent the Republican party in Congress. He'll be just about as independent of them and centrist as George W. Bush. Only, unlike W, he won't be operating from conviction but from expediency.

I mean, Mitt seems to truly love his family and he is clearly deeply loyal to his church. Other than that, he has no anchors I can see except ambition and expediency. Not good prescription if you want a centrist in the White House.
posted by bearwife at 8:52 AM on February 3

Compensation is compensation. If he's taking carried interest as pay for services rendered, then it's compensation.

If not, why can't I say as an employee, that I've made an investment in the company I work for and my paycheck is merely the gain I've realized on that investment? I could also arrange to get payed a year in arrears and pay even less tax.
posted by Benny Andajetz at 8:58 AM on February 3

Vibrissae: I am not in favor of many of Romney's policies, or promises, but there is something about Romney that comes across as decent and genuine in a way that I can't quite put my finger on.

Not the best way of judging a politician. (Didn't we go through this with Bush in 2000?)

Paul Krugman:

Long ago — basically when I started writing for the Times — I decided that I would judge the character of politicians by what they say about policy, not how they come across in person. This led me to conclude that George W. Bush was dishonest and dangerous back when everyone was talking about how charming and reasonable he was. It led me to conclude that Colin Powell couldn’t be trusted, back when everyone said his UN speech clinched the case for war. It led me to conclude that John McCain was unprincipled and self-centered, back when everyone said he was a deeply principled maverick. And yes, it led me to conclude that Barack Obama was a good man, but far less progressive than his enthusiastic supporters imagined.

Romney is proposing a tax cut that's three times larger than Bush's, at a time when the US is running huge deficits. That's completely insane, no matter how likable and decent Romney's image may be.
posted by russilwvong at 8:58 AM on February 3 [3 favorites]

If not, why can't I say as an employee, that I've made an investment in the company I work for and my paycheck is merely the gain I've realized on that investment? I could also arrange to get payed a year in arrears and pay even less tax.

I think you'd have to wait at least a year for your first paycheck.
posted by gjc at 3:59 AM on February 4

A subliminal message from Mitt Romney?
posted by homunculus at 11:04 AM on February 6

After Jay-Z made his new song "Glory" to welcome his new daughter into the world, Jay Smooth wondered what it would sound like if Republican voters made a song to welcome Mitt Romney as their now-inevitable nominee: Phony
posted by carsonb at 11:19 AM on February 6

Making Mitt Romney: How to fabricate a conservative by Ken Silverstein
posted by mrgrimm at 12:46 PM on February 8

Compensation is compensation. If he's taking carried interest as pay for services rendered, then it's compensation.

OTOH, compensation is what the IRS says it is.
posted by smackfu at 6:24 AM on February 9