Entitlement mentality

[kcal09]

Sooo…now we know that Mitt plays a mini-tax because (poor unemployed soul that he is…) he lives on his investments and because his earnings at Bain and the Bain money that has flowed to him since he left the company (including money from vulturizing such companies as KB Toys ) were not “compensation” but “a return on investment” even though that investment was actually a profits share in, well, other people’s money.

But, well, gee, the crazy US tax code in all its multi-pound glory allows that and, as Mitt has said, he pays what he owes and not a penny more or less.

After all, it’s not like he or anyone he is associated with have anything to do with all that…

Then again… when, back during the Bush administration, Chuck Grassley and Max Baucus tried to raise the tax rate on carried interest to one of ordinary income, they were carpet-bombed by lobbyists paid for by the Private Equity Council, a group formed to oppose the change – a group that very much included Bain.

Yes – that was Grassley, Baucus and Bush – hardly a Troskyist troika… in fact, not a single Kenyan Muslim Constitution-shredding business-hating European Socialist among them…

BTW – when Mitt was asked how he felt about that, back in 2007, he danced away from saying “Heck yes” (well, he is a good non-cussin’ Mormon…) “I don’t want to pay 35% when I can get away with less than 15%”. He just said that he was “not in favor of raising taxes”.

So, now we have a fellow whose wealth is twice that of the aggregate wealth of every President from Nixon to Obama and who makes in a day of interest what the average family makes in a year paying a nice low tax because he feels, well, entitled to it.

Of course, that is because his company and others like it – companies that stripped businesses for parts and then dumped gutted pensions and unemployed people on the dumbass taxpayers to cover – awarded themselves massive mini-taxable “performance fees” for those activities and then used that money to lobby ferociously to keep an incredibly low tax rate that the dumbass taxpayers who do not make their money from money then have to subsidize.

Put more simply, Mitt and his friends were not willing to give up the cushy government support that working taxpayers have to cover.

Talk about your entitlement mentality!

[enron_by_the_sea]

The only question I ask is: why does tax code ask me to pay AMT but does not ask Mitt to pay AMT?

If there was one person in the world for which AMT was designed by the wise heads in congress – Mitt Romney would be his name….

Yet, here I am paying that stupid tax (AMT) but not Mitt! Isn’t world an unfair place!!!

[CA renter]

Agree 100% with your position, kcal.

And yet…we hear from these very same financial parasites about how cops, teachers, and firefighters (and private sector workers who are told they have to take a hit on SS/Medicare benefits) have caused our financial hardships and need to take losses on compensation they actually **worked** for. Funny how the world works, isn’t it?

Labor vs. capital…always was and always will be where the true battle lies. Some people STILL don’t get it, even after all we’ve been through the past few decades.

[Anonymous]

One of the arguments for lower capital gains and dividend tax rates is that corporate profits are taxed twice. The corporation pays taxes first and then the shareholder is taxed again. So the total taxes paid on corporate profits is generally around 50%.

[Anonymous]

[quote=CA renter]Some people STILL don’t get it, even after all we’ve been through the past few decades.[/quote]

Cable TV, hybrid cars, iPhones, viagra, heart-stents, GPS, facebook, effective treatments for AIDS, and ubiquitous granite counter-tops.

The past few decades have been hell.

We even had this “internet” thing – where people anonymously argue with each other about just how the world is going to end.

Here’s a website for ya, just in case you run out of things to be hysterical about:

http://first-world-problems.com/

[markmax33]

Kcal – There are two types of business in America.

1. Crony Capitalism – where people get sweetheart GOV contracts, manipulate the GOV for business advanatages, etc. Haliburton is crony capitalism. The banks are crony capitalism.

2. Real Capitalism – that doesn’t prey on the taxpayer. Apple, Google, Facebook, etc are examples of real captilism. They created a product everyone wanted with ingenuity.

They should outright tax the crony capitalism companies 100% and they should leave the tax rate at 0 for the real capitalism companies. Unfortunately there is a push and pull to put everyone in these groups into the same tax bracket because they are making money. I see why the democrats and republicans are so split on this notion. The democrats see people getting rich off of BS loopholes and want those rich people to share what they effectively stole from every tax payer and the rich that made money legitametly don’t want to be taxed because they will have to kill jobs and won’t be able to compete as well at a higher tax rate.
The democratic position’s flaw is that they want to expand the GOV power which will eventually expand GOV contracts to the crony capitalism crew. This will reduce the competitveness of other businesses as regulations are added because the democrats feel they are getting ripped off and need more taxes. It’s quite a trap.

I’m not defending the republicans either, just explaining why the democrat mentality is flawed.

[UCGal]

Markmax –
Who decides what businesses are taxed 0% and what businesses are taxed 100%?

You?

[Anonymous]

[quote=markmax33]
1. Crony Capitalism – where people get sweetheart GOV contracts, manipulate the GOV for business advanatages, etc. Haliburton is crony capitalism. The banks are crony capitalism.

2. Real Capitalism – that doesn’t prey on the taxpayer. Apple, Google, Facebook, etc are examples of real captilism. They created a product everyone wanted with ingenuity.[/quote]

I gotta say, that’s a good way to describe it.

I don’t agree with your “tax the cronies 100%” solution though. We just need to make it less “crony.”

[markmax33]

[quote=UCGal]Markmax –
Who decides what businesses are taxed 0% and what businesses are taxed 100%?

You?[/quote]

No I’m just trying to make an example. I’m sure somebody could create a measure to figure out the competitive advantage a company has gained through lobbying and then tie it to their tax rate. There should be a measure of the number of GOV employees you have on staff if you win a GOV contract too. I’m not saying Apple, Google, Facebook are 100% innocent. Apple has contracts with many school systems. Google and Facebook have lobbyists.

The companies like Haliburton, Car makers, etc, have only survived through GOV intervention. The point of capitalism is you must have failures. Without failures, including large ones, you have socialism and we will head the direction of the USSR.

[SK in CV]

[quote=pri_dk]One of the arguments for lower capital gains and dividend tax rates is that corporate profits are taxed twice. The corporation pays taxes first and then the shareholder is taxed again. So the total taxes paid on corporate profits is generally around 50%.[/quote]

That is the argument. Doesn’t always align with the real world though. Latest CBO numbers are that corporations pay an effective tax rate of about 12%, the lowest in 4 decades, despite one of the highest marginal rates in the world. So even combining the individual rate of 15% plus the effective corporate rate, the total is still much lower than top individual marginal rates.

[Coronita]

[quote=markmax33]Kcal – There are two types of business in America.

1. Crony Capitalism – where people get sweetheart GOV contracts, manipulate the GOV for business advanatages, etc. Haliburton is crony capitalism. The banks are crony capitalism.

2. Real Capitalism – that doesn’t prey on the taxpayer. Apple, Google, Facebook, etc are examples of real captilism. They created a product everyone wanted with ingenuity.

They should outright tax the crony capitalism companies 100% and they should leave the tax rate at 0 for the real capitalism companies. Unfortunately there is a push and pull to put everyone in these groups into the same tax bracket because they are making money. I see why the democrats and republicans are so split on this notion. The democrats see people getting rich off of BS loopholes and want those rich people to share what they effectively stole from every tax payer and the rich that made money legitametly don’t want to be taxed because they will have to kill jobs and won’t be able to compete as well at a higher tax rate.
The democratic position’s flaw is that they want to expand the GOV power which will eventually expand GOV contracts to the crony capitalism crew. This will reduce the competitveness of other businesses as regulations are added because the democrats feel they are getting ripped off and need more taxes. It’s quite a trap.

I’m not defending the republicans either, just explaining why the democrat mentality is flawed.[/quote]

Ha ha ha… Facebook isn’t example of crony capitalism/??

Do you really think facebook, zynga, linkedin, angie’s list, groupon are really worth billions in valuation by itself and had no intervention from i-Banks that have pumped and pumped these companies to astronomical valuations, with the intent of trying to convince people like you to purchase shares in these companies so that they and their traders can’t make a killing?

You’re serious, right? You’re serious that groupon, which is bleeding red, and has no shot at being profitable is worth 15billion, essentially worth more than Motorola Mobility all by itself without any of this so called “crony capitalism” that you rail against.

And before you give me a lecture about your mba qualifications, and your thesis, yada yada yada, a good portion of my relatives work as i-Bankers, have underwritten a lot some of these IPOS, and for that matter are currently on the sell side of for these i-Banks to pump up these companies.

All these dreams of making riches in “stock” an “ipo” is basically a desire to support the very system that you and a lot of other folks who depend on those 401k accounts/etc railing against. That’s why I find it really ironic that people would slam wall street at yet have such interest at owning 401k/stock/stock options/etc… The only difference, I suspect, is really what side of the fence you happen to be on at any time… The side that the ibank happens to be pumping or the side of the fence that the ibank happens to be dumping…

Pot meet kettle.

[Anonymous]

[quote=SK in CV]That is the argument. Doesn’t always align with the real world though. Latest CBO numbers are that corporations pay an effective tax rate of about 12%, the lowest in 4 decades, despite one of the highest marginal rates in the world. So even combining the individual rate of 15% plus the effective corporate rate, the total is still much lower than top individual marginal rates.[/quote]

I understand your point.

If that is the problem though, perhaps we should address it at the source and fix corporate tax policy.

[Anonymous]

[quote=flu]Ha ha ha… Facebook isn’t example of crony capitalism/??[/quote]

No it isn’t. Not even close.

Their market valuation may be “irrational” but they don’t get any significant revenue or capital from the government.

“Stupid investors” is not the same as “crony capitalism.”

[enron_by_the_sea]

[quote=pri_dk]One of the arguments for lower capital gains and dividend tax rates is that corporate profits are taxed twice. The corporation pays taxes first and then the shareholder is taxed again. So the total taxes paid on corporate profits is generally around 50%.[/quote]

Perhaps you can make this argument for dividends. When you are making a capital gain, you are not paying taxes again on the taxed money of the company. Capital Gains tax is NOT double taxation. Lot of times people make this argument. It is important that we are clear about this distinction between dividends and capital gains.

The only reasonable argument for taxing capital gains at lower rate than wages is that someone put his money at risk and low capital gains taxes would encourage risk taking.

Even if we agree on that, there is no justification for 15% tax on carried interest that Romney receives because he did not put his own capital at risk to receive it. Lot of people at investment banks do exactly the same thing that Romney did; and pay much higher income tax on their earnings because their earnings are not “carried interest”. I am frankly astounded how so few people get outraged by this basically completely unfair tax break that private equity receives.

Moving further, I still do not hear any rational argument about why a person earning 175,000 needs to pay “Alternative Minimum Tax (AMT)” but people like Romney are somehow exempt from it.

If you have any sensible argument, please let’s hear it.

It not question about low tax/high tax. It’s a question of fairness!

[Anonymous]

[quote=enron_by_the_sea]Perhaps you can make this argument for dividends. When you are making a capital gain, you are not paying taxes again on the taxed money of the company. Capital Gains tax is NOT double taxation. […][/quote]

Correct, and an important distinction.

I’m not really arguing that Romney should not pay more taxes. I think he should. I also agree that there are a lot of things broken in our tax code.

But I think we should understand the reasons for our tax policy decisions, and make sure we are fixing the problem in the right places. The policy has to more thoughtful than than “make the rich pay!”

If it’s any consolation, Romney’s taxes may not have cost him much in percentage of income, but his tax rate will cost him the election.

[Author]

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