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View Diary: Updated x4 w poll: Bain Tax Bombshell Bigger than Before (150 comments)

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  •  It can't be because of "deductions" as we (4+ / 0-)
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    blueoldlady, Nailbanger, mmacdDE, JVolvo

    understand that term - itemized deductions, because those are limited.  It would have to be because of carry overs - which would mean that he likely paid much less in prior years would have been at an even lower percentage, unless he had significant ordinary income.  

    The numbers Romney throws out - 13%, 13.6%, etc. is simply not feasible long term.  There would have had to be a HUGE loss somewhere along the way to be carried over year after year after year.  And if that was the case, how did he become so wealthy?  

    I could accept that someone making as much money as Romney could have one, maybe two years of very low tax rates as a result of loss carryovers.  But not consistently, the way it's apparent Romney has done.  And it is apparent.  If Romney had ever paid 25% or 30% in taxes, he'd be touting that for all he's worth.  

    "If you trust you are not critical; if you are critical you do not trust" by our own Dauphin

    by gustynpip on Fri Aug 24, 2012 at 01:07:47 PM PDT

    [ Parent ]

    •  No (0+ / 0-)

      Assume $17MM in capital gains, $3MM in ordinary income, and $3MM in itemized deductions.  Gross income is $20MM, taxable income is $17MM, and tax at 15% is $2.55MM.

      Overall tax rate is 12.75%.

      Loss carryforwards don't affect this because they are netted out "above the line" and therefore reduce gross income.  In the example above, the $17MM in capital gains could be $37MM in capital gains with a $20MM capital loss carryforward;  the gross income from capital gains would still be $17MM.

      A loss carryforward could theoretically eliminate capital gains completely.  Many commentators have speculated that Romney harvested had losses that wiped out all his gains in 2008 and 2009, which could have led to him paying no taxes in those years, if his itemized deductions exceeeded his ordinary income items.

      "Well, I'm sure I'd feel much worse if I weren't under such heavy sedation..."--David St. Hubbins

      by Old Left Good Left on Fri Aug 24, 2012 at 03:35:21 PM PDT

      [ Parent ]

    •   (0+ / 0-)

      Assume $17MM in capital gains, $3MM in ordinary income, and $3MM in itemized deductions.  Gross income is $20MM, taxable income is $17MM, and tax at 15% is $2.55MM.

      Overall tax rate is 12.75%.

      Loss carryforwards don't affect this because they are netted out "above the line" and therefore reduce gross income.  In the example above, the $17MM in capital gains could be $37MM in capital gains with a $20MM capital loss carryforward;  the gross income from capital gains would still be $17MM.

      A loss carryforward could theoretically eliminate capital gains completely.  Many commentators have speculated that Romney harvested had losses that wiped out all his gains in 2008 and 2009, which could have led to him paying no taxes in those years, if his itemized deductions exceeeded his ordinary income items.

      "Well, I'm sure I'd feel much worse if I weren't under such heavy sedation..."--David St. Hubbins

      by Old Left Good Left on Fri Aug 24, 2012 at 03:35:38 PM PDT

      [ Parent ]

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