Mitt Romney Would Pay 0.82 Percent in Taxes Under Paul Ryan's Plan

[gribbler]

This must be why he picked Ryan...

Under Paul Ryan's plan, Mitt Romney wouldn't pay any taxes for the next ten years -- or any of the years after that. Now, do I know that that's true. Yes, I'm certain.

Well, maybe not quite nothing. In 2010 -- the only year we have seen a full return from him -- Romney would have paid an effective tax rate of around 0.82 percent under the Ryan plan, rather than the 13.9 percent he actually did. How would someone with more than $21 million in taxable income pay so little? Well, the vast majority of Romney's income came from capital gains, interest, and dividends. And Ryan wants to eliminate all taxes on capital gains, interest and dividends.

Romney, of course, criticized this idea when Newt Gingrich proposed it back in January by pointing out that zeroing out taxes on savings and investment would mean zeroing out his own taxes.

Under Paul Ryan's plan, Mitt Romney wouldn't pay any taxes for the next ten years -- or any of the years after that. Now, do I know that that's true. Yes, I'm certain.

Well, maybe not quite nothing. In 2010 -- the only year we have seen a full return from him -- Romney would have paid an effective tax rate of around 0.82 percent under the Ryan plan, rather than the 13.9 percent he actually did. How would someone with more than $21 million in taxable income pay so little? Well, the vast majority of Romney's income came from capital gains, interest, and dividends. And Ryan wants to eliminate all taxes on capital gains, interest and dividends.

Romney, of course, criticized this idea when Newt Gingrich proposed it back in January by pointing out that zeroing out taxes on savings and investment would mean zeroing out his own taxes.

Almost. Romney did earn $593,996 in author and speaking fees in 2010 that would still be taxed under the Ryan plan. Just not much. Ryan would cut the top marginal tax rate from 35 to 25 percent and get rid of the Alternative Minimum Tax -- saving Romney another $292,389 or so on his 2010 tax bill. Now, Romney would still owe self-employment taxes on his author and speaking fees, but that only amounts to $29,151. Add it all up, and Romney would have paid $177,650 out of a taxable income of $21,661,344, for a cool effective rate of 0.82 percent.

But what about corporate taxes? Aren't they a double tax on savings and investment, so Romney's "real" rate is higher than his headline rate? No. As Jared Bernstein of the Center on Budget and Policy Priorities has pointed out, Romney has structured his investments as "pass-throughs" that avoid corporate tax. In other words, the 0.82 percent tax rate is really a 0.82 percent tax rate.

It might seem impossible to fund the government when the super-rich pay no taxes. That is accurate. Ryan would actually raise taxes on the bottom 30 percent of earners, according to the nonpartisan Tax Policy Center, but that hardly fills the revenue hole he would create. The solution? All but eliminate all government outside of Social Security and defense -- a point my colleague Derek Thompson has made in incredible chart form.

Maybe Harry Reid's mysterious source that Romney didn't pay taxes for a decade was really a time-traveler from the future. If Romney wins, it could very well be true.

http://www.theatlantic.com/business/...s-plan/261027/

Oh, and Romney's a hypocrite...

[Hauldren Collider]

Gribbler's finally made the full transformation into an r/politics-level tool.

[Hauldren Collider]

First of all, this is actually a good idea, even if it means he doesn't pay taxes that year. Just because he pays no taxes this year doesn't mean the income didn't have taxes paid on it at some point beforehand. Capital gains taxes are a "double tax", something we have discussed at length here and you even conceded to previously, as I recall.

Second, what makes you think Mitt Romney is in total lockstep with the policy proposals of his VP? Do you think Obama agrees with every piece of legislation Biden ever proposed while in the Senate? I would seriously doubt it. For political reasons, I suspect Mitt Romney does not outwardly share the opinion that there should be no capital gains tax whatsoever.

So what's next? Are you going to show us the debunked Richmonder article claiming that Paul Ryan is guilty of insider trading?

[MRT144]

First of all, this is actually a good idea, even if it means he doesn't pay taxes that year. Just because he pays no taxes this year doesn't mean the income didn't have taxes paid on it at some point beforehand. Capital gains taxes are a "double tax", something we have discussed at length here and you even conceded to previously, as I recall.

Second, what makes you think Mitt Romney is in total lockstep with the policy proposals of his VP? Do you think Obama agrees with every piece of legislation Biden ever proposed while in the Senate? I would seriously doubt it. For political reasons, I suspect Mitt Romney does not outwardly share the opinion that there should be no capital gains tax whatsoever.

So what's next? Are you going to show us the debunked Richmonder article claiming that Paul Ryan is guilty of insider trading?

Ah yes, the people that earn income by owning shares surely are onerously taxed for the hard work they put into purchasing shares. And then being protected from personal liability if the company does something illegal. The horrors of double taxation.

Sometimes I wonder if you're really just a 72 year old plutocrat trapped in a 20 something body

[KrazyHorse]

Just because he pays no taxes this year doesn't mean the income didn't have taxes paid on it at some point beforehand. Capital gains taxes are a "double tax", something we have discussed at length here and you even conceded to

This would normally be true, except for the monstrous treatment of carried interest.

[MRT144]

This would normally be true, except for the monstrous treatment of carried interest.

Don't rankle the plutocrat's monocle.

[gribbler]

For political reasons, I suspect Mitt Romney does not outwardly share the opinion that there should be no capital gains tax whatsoever.

Yeah...

[Robert Plomp]

For dutch standards I'm quite right-wing politically....
But ever again if I read up about the USA right-wing tax ideas......
The rich guys are really far far undertaxed. And rich people should imho always be taxed more, both in relative and absolute numbers, then poorer people.

In Holland the people who earn the most pay 52% tax and those who earn the least pay about 12% tax (and 20% social insurance as well).
Well, that's way too much, but the USA could easily improve it's financial position by at least making all rich people pay 25% tax. That's not so bad, and the rich still don't have much countries to flee to where the taxing is better (and the circumstances not terrible).

I mean, running a country is something you do together, everybody pays it's part.
I'd wish we could let the USA marry The Netherlands so that our absurd high taxes would be lowered, and yours would be highered.

Does that make me a left-wing politician if it concerns the USA?

[onodera]

You're a godless communist, Plomp.

[Jaguar]

Dividing one number by another is not a rigorous analysis of how someone's purchasing power is diminished through taxation. See, eg, here. By the poor metrics you're using, Romney's tax rate should be close to zero, because instead of selfishly consuming resources for himself, he rents them out to others so that they can use them to become more productive.

[Kidicious]

Just because he pays no taxes this year doesn't mean the income didn't have taxes paid on it at some point beforehand.

It's income just like wages and should be taxed just like income from wages. It's irrelevant that someone paid taxes on their wages. They should have. And they should pay taxes on their nonwage income as well.

[Jaguar]

It's income just like wages and should be taxed just like income from wages.

Wage taxes reduce investment income by themselves, by reducing the principal. The correct tax rate on investment income is 0. Paul Ryan wants to treat investment and non-investment equally, just like you. The difference between him and you is that he understands math.

[KrazyHorse]

Don't rankle the plutocrat's monocle.

The problem arises because of the same accounting approach to taxation which causes us to view dividends interest and capital gains on the footing as wages

[Jon Miller]

That is gives me an interesting idea.

If I take the same person/skill/etc working in the same type of job, he will make more and be more productive in one area than another due to the capital or assets that one company has over the other company.

Isn't it the same, the difference between two professions or jobs/etc? The difference between the people also comes down to returns on capital. Just due to educational or social. Really the 'wages' are due to the return on the educational investment (which cost some large sum of money) and other similar investments. Actual wages are in general minimum wage or less.

This is also an obvious way to look at things when you consider two people working the same job but with different pay. The one who is payed more has had his vocational capital increase more than the one who has not. It is just a type of capital gain.

JM

[Jaguar]

Yes.

[Hauldren Collider]

Wage taxes reduce investment income by themselves, by reducing the principal. The correct tax rate on investment income is 0. Paul Ryan wants to treat investment and non-investment equally, just like you. The difference between him and you is that he understands math.

Careful, Jaguar. We wouldn't want to invite MRT to accuse you of being a monocle-wearing plutocrat.

In other words, QFT

[kentonio]

Second, what makes you think Mitt Romney is in total lockstep with the policy proposals of his VP? Do you think Obama agrees with every piece of legislation Biden ever proposed while in the Senate? I would seriously doubt it.

Paul Ryan is known for one thing, and it's a huge dividing line between the parties. Why on earth do you think Romney picked him as VP if it wasn't to publically embrace his ideology?

For political reasons, I suspect Mitt Romney does not outwardly share the opinion that there should be no capital gains tax whatsoever.

It appears he's spent most of his working life avoiding taxes wherever possible, and is willing to take a huge political hit by keeping his returns secret. What makes you think he'd care about a tax change that most people wouldn't even understand?

[Jon Miller]

Since good locations for capital investment heavily depend on infrastructure investment, educational investment, social investment, and so on... (all public investment) I don't see why people maintain that taxes on capital gains should be 0.

Even if in one perspective that is the neutral position. On the other hand, these sorts of investments (educational, infrastructure, social, etc) are exactly the sort that private capital needs but can't do themselves (because of their public good nature).

JM

[Jaguar]

Then tax payrolls or consumption to fund them. (Incidentally, this is largely what we already do.)

[Jon Miller]

It just seems like more work to tax consumption rather than capital gains.

Maybe I am wrong on that.

My observation from europe is that consumption taxes drives the markets underground.

JM

[Ogie Oglethorpe]

Only one comment-observation. The complete fascisnation with other people taxation rates and incomes strikes me as a symptom of how low, mean, uninspired, covetous and resentful our culture has become.

In respect to the OP, in other words meh.

[Jon Miller]

If you are going to ask me to pay more for less, I am going to want to know that you are paying too (and corresponding to how much you receive).

JM

[Ogie Oglethorpe]

I haven't asked you for a dime.

[Lorizael]

Only one comment-observation. The complete fascisnation with other people taxation rates and incomes strikes me as a symptom of how low, mean, uninspired, covetous and resentful our culture has become.

In respect to the OP, in other words meh.

The entire idea behind the American Dream is that everyone can become rich. Of course people are going to pay attention to what it means to be rich.

[Wezil]

Paul Ryan is known for one thing, and it's a huge dividing line between the parties. Why on earth do you think Romney picked him as VP if it wasn't to publically embrace his ideology?

Exactly. Mitt wanted to burnish his right wing credentials, then in Mitt style he flip-flopped almost immediately and started to distance himself.

It's fun watching someone sucking and blowing at the same time.

[Jon Miller]

I haven't asked you for a dime.

Mitt would like me, if I were to return to the US, to pay more for less.

That is who we are talking about, isn't it?

Additionally, if you support Ryan/Romney, you are doing the same.

JM

[Ogie Oglethorpe]

The entire idea behind the American Dream is that everyone can become rich. Of course people are going to pay attention to what it means to be rich.

and apparently resent them for it.

OTOH if it becomes a goal post for having arrived at their dream, thats pitiful as well since life is a lot more than how much you make (and more to the point how much someone else makes or if they arrived.).

[Ogie Oglethorpe]

Mitt would like me, if I were to return to the US, to pay more for less.

Not really. You likely would pay less for less.

[Lorizael]

and apparently resent them for it.

OTOH if it becomes a goal post for having arrived at their dream, thats pitiful as well since life is a lot more than how much you make (and more to the point how much someone else makes or if they arrived.).

You live in a capitalistic society. The means to getting what you want in life is money. If you don't like that, go to Cuba.

[snoopy369]

Capitalist. You do not need to add -ic to adjectives to make them adjectives.