Friday, August 17, 2012

Update on Reid & Romney's Percentages

Whatever the truth of the "no taxes for 10 years" and whether Reid or his alleged source or Romney are lying (or all of the above?), Reid has now skunked Romney out to state that he has never paid less than 13% in taxes in the last 10 years. Did Reid successfully fall on his ethical or decency sword to get Romney to fess that up? He did get a rise out of Romney who took the bait. And the issue goes on.

Let me explain why I think this is important. We used to have significantly higher tax rates on the wealthy as part of a progressive tax system advocated over a century ago by Republican Teddy Roosevelt. He believed that those who had gained significantly more under our American system owed more back. There was also the patriotic American, democratic-republican sentiment that we did not want to create a privileged, propertied or moneyed class as in Europe. (We'll assume our British friends are in Europe even if they don't like to think so.) The highest rates were back in the Eisenhower era when the country's economy was booming. So, apparently people were still rich or entrepreneurial enough to start up businesses and hire people. Reagan twisted this around most significantly with his "trickle-down" and "government-is-the-problem" philosophies now accepted as political scripture by those on the conservative side of the political spectrum.

From an opinion piece favorable to Romney on his income and taxes I get the following figures. For the past two years, Romney made $42.6 million. He paid $6.2 million in taxes and $7 million to charity. That's all perfectly legal and good. His taxes have done a lot of good for our country and his charity has done a lot of good for some organizations including our shared church. And I understand that taxes on corporate earnings were already taken off the top or he would have made even more. I'l even admit that my effective rate on income tax is a little less than 13% because of credits and deductions even if my charitable contributions are also less at about 12 or 13% of gross income.

But here's the deal. Romney was left with $29 million dollars in his pocket (or blind trust bank accounts wherever they are) after taxes and charity. Now, that's two years. So for any kind of comparison to the rest of us, we will assume we can divide by 2 to come up with $14.5 million per year after taxes and charitable giving. That's many, many times times more than the gross I make in a year - or even my entire professional life to date! And then there's still my taxes and charitables not to mention basic living expenses to support my family. I suppose Romney worked so many, many times harder than I did. Of course, that's all investment income in blind trusts, so he didn't really work at all - his money did. And yet he did earn the original millions in seed money maybe working many, many times harder than I did and oh so much smarter! Although I have my doubts it was by that many multiples of hard work and smarts to match the many multiples of the return.

All I know is that if I earned just $10 million in a year, was taxed at 80% and gave 10% to charity, I would still come out WAY ahead of where I am now. I'm not saying this out of jealousy or envy. I'm saying this as a patriotic American like Teddy Roosevelt, who, rich as he was with inherited wealth, thought that the wealthy owed back to the society that produced such opportunities and protections along with the idea that we should try it out there on our own as he did with cattle ranching (even if he had the money to invest and it didn't really go so well).

Let me try one more way to explain this. Imagine a person with a family earning $10,000 a year. They're taxed at only 10% (because so many think a flat tax is ever so fair and everyone should pay something generally forgetting that the less fortunate pay a much, much larger percentage of income on taxes for gasoline and many other things already). And then the person is a good Mormon so they pay 10% or so in charitable contributions. That person is left after tax and charity with $8,000 per year to support a family and put the rest in a pocket. If you don't see a problem with this scenario, fine. Go ahead and vote for Romney. The rest of us are trying for a better world under the principles of the Constitution. We the People - justice, domestic tranquility, general welfare, blessings of Liberty, and all.

Remember, if Harry Reid is lying, he's lying about a source, not what's in Romney's taxes. If the source is lying, then Reid is just passing along bad information - admittedly rather irresponsibly. Maybe Romney is truthful about the 13%. We may never know. But we now do know he says he paid only an effective rate of 13% on millions and millions of dollars.

Way to fall on your sword for the cause, Harry Reid!

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Comments are welcome. Feel free to disagree as many do. You can even be passionate (in moderation). Comments that contain offensive language, too many caps, conspiracy theories, gratuitous Mormon bashing, personal attacks on others who comment, or commercial solicitations- I send to spam. This is a troll-free zone. Charity always!