Taxes are on the forefront of discussion this week. At his State of the Union Speech, Obama called on the 1% to pay their fair share of taxes and give back to the society which made their success possible:
Tax reform should follow the Buffett Rule. If you make more than $1 million a year, you should not pay less than 30 percent in taxes. And my Republican friend Tom Coburn is right: Washington should stop subsidizing millionaires. In fact, if you’re earning a million dollars a year, you shouldn’t get special tax subsidies or deductions. On the other hand, if you make under $250,000 a year, like 98 percent of American families, your taxes shouldn’t go up. (Applause.) You’re the ones struggling with rising costs and stagnant wages. You’re the ones who need relief.
Now, you can call this class warfare all you want. But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.
By simply letting George W. Bush’s tax cuts and other measures expire, the annual budget deficit could be slashed by $7.1 trillion!
Meanwhile, under pressure, Gov. Mitt Romney finally disclosed his 2010 tax return for last year showing an effective tax rate of 13.9% on $21.6 million of income (or over $33,000 per day) in 2010 and expects to pay 15.4% on $20.9 million in 2011.
When Mitt Romney’s father Gov. George Romney (R-MI) ran for President he released 12 years of tax returns saying “One year could be a fluke, perhaps done for show.” When Mitt Romney applied for the job of Vice-President he provided John McCain with over 23 years of tax returns. (McCain passed over Mitt Romney and chose Gov. Sarah Palin as his running mate.) Now Mitt Romney is running for President and he expects one year of tax returns to satisfy everyone. People are especially concerned about the time he spent at Bain Capital.
According to Dealbook, David Rubenstein, founder and chairman of the Carlyle Group, defend Mitt Romney’s tax rate:
Mr. Romney was just following the tax laws when he paid a rate of 13.9 percent on income of more than $21 million in 2010. “If you change the law, we’ll pay the taxes,” Mr. Rubenstein said to scattered applause during a debate at Davos on the future of capitalism.
- Very few American households create tax forms the length of a Tom Wolfe novel.
- Romney’s effective tax-rate may not be all that much lower or higher than most households, it still sounds pretty low to the average person looking at what’s withheld from their wages.
- Although many more Americans have something in the market, almost none of them can imagine an IRA with $100 million in it. That’s strange even to most rich people.
- Tithing to the Church of Jesus Christ of Latter-Day Saints. Romney gives a serious amount of money to his church. [$4,100,000] And although lots of people give something, a tithe is a commitment most Americans actually can’t understand making. This detail makes Romney seem conspicuously religious in a way that most Americans, even most Evangelicals are not.
- The big buzzy words out of this release (sure to be used by Gingrich) are “Cayman Islands” and “tax shelter” and “Swiss bank account.”
The new DNC video asks “why Romney puts so much of his money in secret Swiss bank accounts and other overseas tax havens.”
Bloomberg just polled 1,209 investors to find out what they thought about the “Romney tax”.
2/3rd or 60% of those polled thought that the low 15% rate was “unwarranted”:
- 21% said the rate was fine
- 13% said they had no idea
That was for investors all over the world. Here in the U.S.:
- 67% said there was no justification for the lower 15% rate
- 27% said that the rate was fine
As Obama said on Tuesday,
We don’t begrudge financial success in this country. We admire it. When Americans talk about folks like me paying my fair share of taxes, it’s not because they envy the rich. It’s because they understand that when I get tax breaks I don’t need and the country can’t afford, it either adds to the deficit, or somebody else has to make up the difference – like a senior on a fixed income; or a student trying to get through school; or a family trying to make ends meet. That’s not right. Americans know it’s not right. They know that this generation’s success is only possible because past generations felt a responsibility to each other, and to their country’s future, and they know our way of life will only endure if we feel that same sense of shared responsibility. That’s how we’ll reduce our deficit. That’s an America built to last.
Even President Ronald Reagan supported the idea of the rich paying their fair share.