Florida Conservative

A Conservative Take on Florida and U.S. Politics

Taxation 101

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Taxes and taxation have been heavily featured in the news lately, both by Republican candidates attacking Romney and by President Obama attacking “the rich” with the support of Warren Buffett.  I’ll tackle President Obama’s “Billionaire Tax” later, but for now I’d like to point out a few problems with the attacks on Romney.  The main problem with Romney’s taxes seems to be his personal tax rate of about 15%.  To hear others portray it, paying “so little” is “unfair.”  Man, I love having quotation marks handy…  Here goes the rebuttal:

(1) Romney’s capital gains have already been taxed at about 40% before he sees any profits. That’s a tax bill of $14,000,000 before he ever sees a dime.

(2) Many people confuses effective tax rates with tax brackets. They are NOT the same thing. Keep reading.

(3) Everyone who says “I pay more in taxes than Romney does” must mean they pay $14,000,000 in corporate income taxes and $3,000,000 in personal income taxes each year, for which America thanks you.

(4) Everyone who says “I pay more in taxes than Romney does” but means “I pay a higher effective tax rate” is either bad at math or lying. A family of four would have to make over $210,000 each year in order to pay a 15.0% effective tax rate. Sign me up!

(5) To clarify #2, the family of four making $210,000 each year would pay an effective tax rate of 15% but be in the 28% tax bracket.

(6) I think we should all be impressed by those who donate 17% of their after-tax earnings to charity, but that’s just my opinion.

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Written by floridaconservative

January 25, 2012 at 12:00 PM

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