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View Diary: Romney Parks Millions in Offshore Tax Havens UPDATE 2 (309 comments)

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  •  I disagree with judge Hand (0+ / 0-)

    Specifically, I disagree with him when he says there is no moral or patriotic duty to pay more in taxes than the letter of the law requires. Of course there is not legal duty to do so, but I ask this, if there is no moral or patriotic duty to do so, then why are people upset with Mittens for paying only 15% in taxes? Most Americans think Mittens has a duty to pay his fair share, whatever the law says. Most Americans think he is cheating the country out of its fair share. Most Americans think  Newt is a tax cheat, whatever the law and judge Hand say.

    •  Seth - of all the candidates who have run (0+ / 0-)

      for President, and released their tax returns, I don't think there has ever been a single return that showed that the candidate paid more than the law required.  While a few people do it each year, and there is a line on the tax return form to add an additional payment, it is extremely rare for anyone, including politicians, to make voluntary extra payments to the IRS.

      "let's talk about that"

      by VClib on Thu Jan 19, 2012 at 09:08:18 AM PST

      [ Parent ]

      •  Tell me something I don't know (0+ / 0-)

        They all cheat. All of the 1% cheat. We all know that. How does the fact that "every candidate does it" negate the popular sentiment that they shouldn't be doing it?

        I'm not talking about "voluntary extra payments." Nobody makes voluntary extra payments. I'm talking about hiring expensive lawyers to do things to your filings that ordinary people can't get done. People know it is legal, but they still think of it as unfair play, as the option is not open to everyone.

        Before we continue, though, I would like to make clear what we are debating. I am making no definitive statements as to whether he is breaking the law, cheating, or just doing what everyone else does. I'm saying that I believe the majority of US citizens think of what Mittens is doing as "cheating" on his taxes. That is all I am saying. Agree or disagree?

        •  Seth - I understand that you believe (0+ / 0-)

          that Romney is likely following the law, but still "cheating" and that most Americans agree with you. I just don't agree with you and most Americans. In my view if you are following the law, you are not cheating on your taxes. I am with Judge Hand on this one.

          "let's talk about that"

          by VClib on Thu Jan 19, 2012 at 09:55:52 AM PST

          [ Parent ]

          •  It's all semantics anyway (0+ / 0-)

            The real question is not whether or not he is cheating. Cheating is just a word. The question is, is what he is doing right, yes or no?

            Should the majority of Americans be angry that he is paying less than 15% when they pay more? Should they be angry at Mittens for taking advantage of these legal loopholes, or should they be angry at the system (that Mittens helped set up) that lets him do that?

            Americans are angry that Mittens pays a lower tax rate than they do. Who should they be angry at, in your opinion?

            •  They should be angry at Congress (0+ / 0-)

              Congress is the only body that writes tax laws. There was a real opportunity to raise taxes on Romney and all the other 1% by letting the Bush tax cuts expire at the end of 2010. The President and the Dems just had to sit on their hands and let it go.

              "let's talk about that"

              by VClib on Thu Jan 19, 2012 at 10:56:14 AM PST

              [ Parent ]

              •  So, you are saying Mittens should be paying 15%? (0+ / 0-)

                You seem to be saying, because it is legal to do so, Mittens should be paying the least he can, and that is not immoral. You seem of the opinion that people should not be mad at Mittens for this situation, they should be mad at congress and the president, am I reading you right?

                •  Yes, they should be mad at Congress (0+ / 0-)

                  To the best of my knowledge Mitt Romney has never served in Congress or had any direct influence on the drafting of any tax laws. In my view it is not at all immoral, unethical, or unpatriotic, to follow the tax law and pay only what you owe according to the current IRS code. I am with Judge Hand on this who stated the position with much more eloquence than me. There is no such thing as the "spirit" of tax law, there is black and white. If you follow the code you have done all you have been asked by the federal government. If we want people like Mitt Romney to pay more we will have to change the tax laws. And if we do, he will pay more.

                  "let's talk about that"

                  by VClib on Thu Jan 19, 2012 at 11:55:29 AM PST

                  [ Parent ]

                  •  But you haven't answered the real question (0+ / 0-)

                    Should Mittens be paying more? I know I want him paying more, do you?

                    As to your second reply, why are capital gains taxed differently than other income? Shouldn't we simply say, income is income, most people can't choose whether their income comes from wages or investments, so we will tax it all the same?

                    And I know it is silly but I have to ask, that VC by your name, does it stand for "venture capital?"

                    •  I'll let people keep guessing on the VC part (0+ / 0-)

                      In the past 100 years there have been only two years in the US when capital gains and ordinary income were taxed at the same rate. Just after the Tax Reform Act of 1986 the top marginal rate was dropped to 28% and there was no discount for long term capital gains. I do not favor taxing earned income and capital gains the same. Nearly every country in the world with a viable investment community has a discount for long term capital gains income and taxing them at the same rate in the US would, in my view, be damaging to our economy. For a significant part of my professional life the long term capital gains rate was 50% of your earned income rate. If I had to pick a number I would probably go back to the Clinton era tax code of a top rate of 40%, the same for dividends and interest and a long term capital gains rate of 20%.

                      I do believe that lower tax rates on long term capital gains does benefit the economy, encourages capital formation, and creates an incentive for people to invest.

                      "let's talk about that"

                      by VClib on Thu Jan 19, 2012 at 01:06:53 PM PST

                      [ Parent ]

                      •  Why not give a tax break for investing, then? (0+ / 0-)

                        If you want to encourage investment, then give a tax break for doing that. It is nonsensical to think  that you can encourage investment by giving a tax break on the returns from investment. That is only rewarding people who have already invested, regardless of what they then do with the money. By giving a break to those who do invest, you encourage people to invest.

                        •  At one point we did that (0+ / 0-)

                          Prior to the Tax Reform Act of 1986 we gave people tax write-offs to invest in specific things that Congress thought had merit. All the investments were in the US. People could still have capital gains if they held the investment over a long period. Those "tax write-off", were eliminated in TRA86. Some people think that we should bring them back for investments in clean energy and other high value domestic programs. You do receive some tax benefit if you have a failed investment, but the tax benefit is limited to $3,000 per year.

                          "let's talk about that"

                          by VClib on Thu Jan 19, 2012 at 01:47:18 PM PST

                          [ Parent ]

                          •  It is socialism for the rich (0+ / 0-)

                            If you cut the capital gains tax to zero, it would not encourage very many more people to invest, because most people who can invest are investing as much as they possibly can. Oversees, where the return is better because the workers are more desperate. If you don't have the money, no amount of incentives will convince you to invest what you don't have.

                            If the capital gains tax were raised, personal income tax for the poor lowered, and incentives given for actually investing in American jobs, the whole economy would be healthier, as control of wealth would be more spread out and no one person would have as much control over the lives of other people as they do now.

                            The capital gains tax is government trying to regulate behavior by giving incentives to certain groups and not others. However, most people do not have the choice to invest, as they do not have the money. So this is socialism, but only for the rich, as usual.

                            Have you benefited from socialism for the rich? I haven't, and you know what? I don't want to. It feels unfair, and like most people, I care more about fairness than I do about personal gain.

                          •  Seth as a US taxpayer (0+ / 0-)

                            If you invest overseas your profit it is taxed by the IRS just like if you had invested in your home town. There is no tax benefit, for US taxpayers, from investing offshore.

                            "let's talk about that"

                            by VClib on Thu Jan 19, 2012 at 02:15:14 PM PST

                            [ Parent ]

                          •  Who said otherwise? (1+ / 0-)
                            Recommended by:

                            That is a problem, you get that tax break no matter where or how you invest. I am saying, rather than taxing the INCOME from investing differently, why not a tax break for actually INVESTING in America? I ask because it sounded earlier as if you were making the argument that this tax structure is good for America as a whole. Well, if you get the tax break even when you invest in foreign companies, then your earlier argument kind of flies out the window, doesn't it?

                            Do we, as a nation, tax INCOME from investing at a lower rate than income from working in order to benefit society as a whole? If that is our rationale for doing so, then we must keep those investments in America. If our rationale is actually "We just like to make rich people richer, and damn the cost to the rest of us" then we are doing a fine job.

                          •  I missed your point (0+ / 0-)

                            and agree that favorable capital gains treatment should only be for US investments.

                            "let's talk about that"

                            by VClib on Thu Jan 19, 2012 at 02:24:59 PM PST

                            [ Parent ]

                          •  My main point is this: (0+ / 0-)

                            If we want to reward investment, then give a tax break for investing. Giving a tax break on the INCOME gained from investing is not the same thing. Income is income, it is what you do with it that matters, not how you got it. We are rewarding people who got their income in a particular way, but 99% of the people don't get to choose whether their income comes from investing or work. You can't incentivize those people into investing by giving a tax break to people who have already invested and made a return. This just seems like basic common sense to me, yet people continue to confuse investing with income.

                          •  Seth - well I don't agree with that statement (0+ / 0-)

                            Capital gains treatment for long term gains is a powerful incentive for people to invest. I see it every day. The Obama administration were advocates for a two year period, which just ended this last December, for a very special capital gains tax rate of zero. For people who invested in startups between January 1, 2010 and Dec 31, 2011, and kept their stock for five years, there will be no capital gains tax on any gains - ZERO. These gains will not even be in the calculation for AltMin. I saw how this tax feature very substantially motivated private investors to act before the window closed last Dec.

                            "let's talk about that"

                            by VClib on Thu Jan 19, 2012 at 03:54:29 PM PST

                            [ Parent ]

                          •  You could have a different powerful incentive (1+ / 0-)
                            Recommended by:

                            Rather than rewarding people after the fact for having the good luck to turn a profit on their investments, which is just a form of income, you give a rebate on ANY form of income that gets invested. Right now, you only get the benefit when you reinvest investment income. I am asking, why? Why not give a tax rebate on any sort of income that gets invested, if promoting investment is the goal?

                            In most other areas where the government wants to influence economic activity, it gives a tax rebate for the spending side of things. With investment, you get a rebate on the income side of things. Investment INCOME is treated differently that other income, when what we really should be doing is treating investment EXPENDITURE differently than other expenditures.

                          •  Seth - I think you have a very valid point (0+ / 0-)

                            As I mentioned we did this prior to 1986, although you also qualified for capital gains if the investment worked out as well.

                            "let's talk about that"

                            by VClib on Fri Jan 20, 2012 at 08:43:35 AM PST

                            [ Parent ]

                •  Seth - the capital gains rate could be 20% (0+ / 0-)

                  It should probably be higher, but we could have moved the capital gains rate to 20% and the dividend rate to 40% by just letting the Bush tax cuts expire. The President and Dems in Congress had all of this under their control at the end of 2010 and just had to sit on their hands, but lacked the political courage. Be mad at them.

                  "let's talk about that"

                  by VClib on Thu Jan 19, 2012 at 12:00:51 PM PST

                  [ Parent ]

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