How Mitt Romney escaped the tax man

[phkrause]

http://www.salon.com/2012/01/24/how_mitt_romney_escaped_the_tax_man/singleton/

[Dr. Shane]

Quote:

There are other odds and ends. For example, Romney was probably able to avoid paying taxes on his speaking fees and book royalties ($528,871 in 2010) by offsetting it with contributions to charity and the Mormon church. But the unassailable point is that Romney was absolutely correct when he said in Monday night’s debate in Florida that he paid exactly what he legally owed in taxes.

Look at those points I underlined carefully. Many liberals, including Obama, hate the fact that charitable contributions are tax deductible. Charitable contributions should be deductible and no one gets out of paying taxes by donating to charity.

Follow the concept.

If I give money to charity, I don't get taxed on that money because it is as if I never earned it. The money went to charity, not into my pocket.

So if I earn $300,000 in one year and donate $250,000 to charity I only have to pay taxes on $50,000. That has some liberals up in arms claiming I am using charity to avoid paying taxes. But that is not the case. I only kept $50,000 and that is what I lived on. So that is what I pay taxes on.

Some liberals would actually like to tax God. Yes, they want to tax God. How? They want to cap charitable contributions which means if I give too much money to the Church, I have to pay taxes on part of it. Why how can I do that if I gave the money to the church? Obviously I would have to hold back part of my charitable contribution so I could pay that tax which is effectively taxing God.

[Bravus]

The upshot of the article is that capital gains are taxed at 15% while earnings are taxed at a much higher rate. The person who can live off investments pays less tax than the person who works for a living. The article points out that Clinton was in power when this was set up. Those on the right who are so very, very keen on poor people working for a living might be interested in the fact that there are a whole lot of rich people who don't who pay a lot less tax than them...

[Dr. Shane]

A lot of people on the right want to play games by only looking at the amount of income tax paid by the various classes and thus point out that the top income earners pay the most income tax. That is true but doesn't mean a lot.

The capital gains laws do need to be adjusted to redefine what is capital gains and what is not. The idea is that capital gains should be taxed less than earned income because the initial investment was already taxed at the earned income rate. I don't have a problem with that. The current 15% rate should probably be increased but doing so will not solve the deficit problem.