# Romney and taxes: Morally unfit to be President **URL:** \ **Category:** Politics & Elections\ **Created:** [January 24, 2012, 11:49am UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492 "2012-01-24T11:49:13Z")\ **Posts on this page:** 20\ **Page:** 14
**Author:** ![What\_the](https://avatars.discourse-cdn.com/v4/letter/w/f4b2a3/32.png) [@What\_the](https://boards.straightdope.com/u/What_the)\ **Post date:** [February 3, 2012, 12:38pm UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/261 "2012-02-03T12:38:32Z")
> [@foolsguinea](#): > > I think investment income should be counted as regular income, and if you’re making $40K or less in a year total income, you shouldn’t be owing net tax anyway. I don’t see why a special exemption has to be in 6 figures for cap. gains by itself. How come those who make $40k or less shouldn’t contribute to the “safety net”? ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [February 3, 2012, 5:51pm UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/262 "2012-02-03T17:51:36Z")
Everyone contributes to the “safety net”. FICA taxes have a ceiling ($106,800) but not a floor. State unemployment taxes also have ceilings. The highest is $34,900 (Hawaii) but most state caps are [between $8,000 and $15,000](http://taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=541). Everyone pays taxes, too. Individual income taxes are less than half of federal revenues, though they are the largest source. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [February 3, 2012, 6:10pm UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/263 "2012-02-03T18:10:00Z")
> [@mr.jp](#): > > Lets say that you know that tomorrow there will come a guy who will give you $1000 for each dollar that you have. You then decide to use $1. Will you say that the real price for that use of a dollar is $1, or that the real price is $1.001? Do you think it’s ridiculous to say that the real price is $1.001? If you KNOW that you will get a 100000% return on your money tomorrow, then I would say that the time value of money has become 100000% per day for you. But your $1 today is still worth $1 today, how could it be worth anything else? > [@](#): > > What if we lived in a world where income tax was really low, and capital gains tax was more than the income tax, in such a way that Romney pays the exact same taxes. Would you then say: “Oh this is fair world. Romney is rich and he pays more taxes than the rest of us, so that’s better.” (Even though Romney pays the same taxes as he does now.) And what if we lived in a world were Romneys income tax was really high, and capital gains taxes were 0, in such a way that the result for Romney was the same. Would you then say that “This is a much more unfair world. He pays 0% taxes. That is much more ridiculous than if he paid 13% taxes.” Even though, again, the result for Romney is exactly the same. Why do you keep throwing out different variations of the same example. I see what you are trying to say and I am saying that your examples are highly stylized. You are trying to say that taxes on earned income are interchangable with taxes on investment income and we can adjust the rates and their progressivity to make it so. This is clearly false and using Romney as an example is particularly damaging to your examples because his income on labor is taxed at capital gains rates. The effect of a tax on labor income and a tax on capital income are different and they are not interchangable. Take three taxpayers: Moe, Larry and Curly. They each earn $200, get taxed on it at whatever rate you propose. More spends everything he ends up with on hookers. Larry spends $20 and invests in a bond that yields 10% and pays whatever tax your propose one that. Curly spends $10 and invests in a hotdogs stand that might earn anywhere between -100% and +250%. What 2 tax systems (other than a 0% or 100% tax system) would have the same results for each of these taxpayers (compared against themselves under the two systems) under all scenarios. Heck I’d like to see two tax systems that yields the same results for Curly under all scenarios. I don’t think that it exists and your theorizing is based on a single set of static facts which requires those facts to remain static for everyone for all of eternity. ---
**Author:** ![mr.jp](https://avatars.discourse-cdn.com/v4/letter/m/48db29/32.png) [@mr.jp](https://boards.straightdope.com/u/mr.jp)\ **Post date:** [February 5, 2012, 1:19am UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/264 "2012-02-05T01:19:23Z")
> [@Damuri\_Ajashi](#): > > If you KNOW that you will get a 100000% return on your money tomorrow, then I would say that the time value of money has become 100000% per day for you. But your $1 today is still worth $1 today, how could it be worth anything else? Agree. > [@](#): > > I see what you are trying to say You don’t, though. My example is only about Romney because that’s all I’m talking about. I’m not talking about making a different tax system. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [February 5, 2012, 1:38am UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/265 "2012-02-05T01:38:49Z")
> [@mr.jp](#): > > Agree. > > You don’t, though. My example is only about Romney because that’s all I’m talking about. I’m not talking about making a different tax system. Wait. What? You were basically saying that a capital gains tax is a second layer of income tax and you proved it by comparing changes in ability to consume. If thats not proposing a different tax system then you have at least begged the question. So if your point was merely that all investment income is actually double taxation then I think we have already disposed of that argument or did you miss it? It might help if you realize we are talking about income taxes. ---
**Author:** ![unsub](https://avatars.discourse-cdn.com/v4/letter/u/9f8e36/32.png) [@unsub](https://boards.straightdope.com/u/unsub)\ **Post date:** [February 10, 2012, 7:40am UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/266 "2012-02-10T07:40:48Z")
> [@Damuri\_Ajashi](#): > > How is your buying stock from some other guy a boon to the economy? When I buy stocks it supplies capital to a company (ie google, apple, walmart) that use that money to expand their company by hiring more employees, or increasing manufacturing, or advertising, or research and development. Those new employees now generate tax revenue on their payroll taxes and income taxes and sales taxes. And everyone who buys their products pays sales taxes. And the companies pays corporate income taxes on their increased revenue, thanks to my capital investments. Just look at facebook that went IPO and it will be a huge tax generator. > **[Breaking News - Headlines & Top Stories | The Star](https://www.thestar.com/)** > > thestar.com is one of Canada's largest online news sites and 100% Canadian-owned. Live news, investigations, politics, sports and the heartbeat of Toronto, Canada's largest city. If it weren’t for us capitalist free market investors california wouldn’t get their $2 billion tax payment from Facebook. Imagine if everyone who made less than 200k didn’t have to pay investment income taxes. I know I’d be investing every single cent I have sitting in my bank right now if I knew I didn’t have to pay taxes on my investments. I have $15k sitting at 0.80 percent interest in my bank because I know on April 15 I will owe over $10k in taxes, plus I have to pay my estimated taxes for the first quarter. And I do all this on a $11/hr wage. ---
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [February 10, 2012, 12:01pm UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/267 "2012-02-10T12:01:40Z")
> [@unsub](#): > > When I buy stocks it supplies capital to a company (ie google, apple, walmart) that use that money to expand their company by hiring more employees, or increasing manufacturing, or advertising, or research and development. You miss **Damuri Ajashi** ’s point. Other than when a company issues stock, when you buy shares you are buying from “some other guy”. That does not provide any capital to the company whose stock you are buying. What you are doing by participating in the market is helping provide liquidity. This is important in its own way - there needs to be such a market for shares otherwise investors would not take part in IPOs - they would have difficulty selling their shares and realizing their profit. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [February 10, 2012, 12:33pm UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/268 "2012-02-10T12:33:40Z")
> [@unsub](#): > > When I buy stocks it supplies capital to a company (ie google, apple, walmart) that use that money to expand their company by hiring more employees, or increasing manufacturing, or advertising, or research and development. That is only true if you buy IPO stock. Most equity sales occur from third parties who already own stock, so none of that money goes to the corporation. The corporation would have to issue new stock (deflating the value of shares held by stockholders). > [@](#): > > Those new employees now generate tax revenue on their payroll taxes and income taxes and sales taxes. Corporations do not hire new employees just because they receive new capital. Corporations hire new employees when demand for their products increases and they have to increase productivity. Corporations are sitting on nearly $3 trillion in cash, waiting for the consumer to start buying again, before they invest it in new employees. You have the economics of job creation exactly backwards. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [February 10, 2012, 3:54pm UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/269 "2012-02-10T15:54:14Z")
> [@Fear\_Itself](#): > > That is only true if you buy IPO stock. Most equity sales occur from third parties who already own stock, so none of that money goes to the corporation. The corporation would have to issue new stock (deflating the value of shares held by stockholders).Corporations do not hire new employees just because they receive new capital. Corporations hire new employees when demand for their products increases and they have to increase productivity. Corporations are sitting on nearly $3 trillion in cash, waiting for the consumer to start buying again, before they invest it in new employees. You have the economics of job creation exactly backwards. I think this bears repeating. Capital doesn’t create jobs. Capital follows risk adjusted returns so if opportunity is there, the capital will flow there whether you suck its cock or not. ---
**Author:** ![unsub](https://avatars.discourse-cdn.com/v4/letter/u/9f8e36/32.png) [@unsub](https://boards.straightdope.com/u/unsub)\ **Post date:** [February 17, 2012, 8:22pm UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/270 "2012-02-17T20:22:21Z")
Buying stock also increases demand which raises the price of each share. So everyone who owns shares in that stock has just increased their wealth to use for spending or reinvesting. This benefits everyone with retirement accounts like 401ks since they contain mutual funds. People can retire more comfortably. When there is a big sell off the market drops due to increased supply, but if stock investing is encouraged by eliminating investment taxes then demand will increase. Won’t more spending cash help the economy? ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [February 20, 2012, 12:41am UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/272 "2012-02-20T00:41:53Z")
> [@unsub](#): > > Buying stock also increases demand which raises the price of each share. So everyone who owns shares in that stock has just increased their wealth to use for spending or reinvesting. > > This benefits everyone with retirement accounts like 401ks since they contain mutual funds. People can retire more comfortably. > > When there is a big sell off the market drops due to increased supply, but if stock investing is encouraged by eliminating investment taxes then demand will increase. Won’t more spending cash help the economy? Not unless they sell or borrow against the stock in which case they are no longer invested, which by your reasoning would make stock prices drop. Also stock price doesn’t go up because someone buys it, it goes up because more people want to buy it than want to sell it. In any event, what you are describing sounds suspiciously similar to a bubble. BTW, all that stuff in pensions and 401K’s are not subject to the capital gains tax, either because they are taxed at ordinary rates upon withdrawal or because they are not taxed at all. If you want a healthier more vibrant economy, stock trading profits that are the result of more people investing (rather than increases in value of the underlying companies) are not a good foundation. If you want a good economy, you need production. Production CAN drive consumption but it is a lot easier to pull that rope than push it. ---
**Author:** ![Nana](https://avatars.discourse-cdn.com/v4/letter/n/5f8ce5/32.png) [@Nana](https://boards.straightdope.com/u/Nana)\ **Post date:** [February 25, 2012, 8:16pm UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/273 "2012-02-25T20:16:23Z")
Why do so many “reasonable” people cheat on their taxes? The rate doesn’t matter? I contend it does. I have no problem paying taxes if those taxes are for the general welfare. The citizens are robbed of billions though, through corruption in the government, waste, fraud, abuse, bloated entitlements, etc. I am still forced to pay them though. They will simply attach my wages. If we taxed everyone who makes more than $1,000,000,000 a year at 50% it would not begin to bail out the mess we are in. We must also cut. And not just the military, that won’t be enough. Where else are the liberals willing to actually make the tough calls? All I hear is raise taxes, cut military. I would love to have Washington actually address this. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [February 25, 2012, 9:25pm UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/274 "2012-02-25T21:25:48Z")
> [@Nana](#): > > Why do so many “reasonable” people cheat on their taxes? > > The rate doesn’t matter? I contend it does. I have no problem paying taxes if those taxes are for the general welfare. The citizens are robbed of billions though, through corruption in the government, waste, fraud, abuse, bloated entitlements, etc. Cite for corruption in government costing billions? Cite waste and fraud are costing billions? An entitlement you consider bloated might be something someone is living on. Government isn’t perfect. Neither is business. Deal with it. > [@](#): > > I am still forced to pay them though. They will simply attach my wages. You are also paying for roads, bridges, the military, science which has already made your life better and lots of other stuff. So tough on having to pay your share. > [@](#): > > If we taxed everyone who makes more than $1,000,000,000 a year at 50% it would not begin to bail out the mess we are in. We must also cut. And not just the military, that won’t be enough. Where else are the liberals willing to actually make the tough calls? All I hear is raise taxes, cut military. I would love to have Washington actually address this. No, since hardly anyone makes that much. Reasonable tax increases for people making a lot of money (less than a billion) will make a big dent. The deficit is not from spending alone - it is from the decrease in revenue from the recession. Liberals are willing to look at everything. It is the conservatives who have signed the Norquist pledge and refuse to even consider tax increases from our historically low levels. I’d go into how stupid it is to cut government spending in a recession, but let’s see how you handle this and not what Rush told you. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [February 28, 2012, 4:40pm UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/275 "2012-02-28T16:40:32Z")
> [@Nana](#): > > Why do so many “reasonable” people cheat on their taxes? > > The rate doesn’t matter? I contend it does. I have no problem paying taxes if those taxes are for the general welfare. The citizens are robbed of billions though, through corruption in the government, waste, fraud, abuse, bloated entitlements, etc. > > I am still forced to pay them though. They will simply attach my wages. > > If we taxed everyone who makes more than $1,000,000,000 a year at 50% it would not begin to bail out the mess we are in. We must also cut. And not just the military, that won’t be enough. Where else are the liberals willing to actually make the tough calls? All I hear is raise taxes, cut military. I would love to have Washington actually address this. Places like Korea and Hiong Kong have top marginal tax rates in the teens and the cheating there is rampant. People cheat on taxes because they think they can get away with it not because they are overtaxed. BTW, I echo Voyager. Please cite for billions in corruption waste and fraud. And those bloated entitlements you are talking about are called social security and medicare. I wish people would stop shorthanding it so that the old folks would understand that when people talk about cutting entitlements they are talking about social security and medicare. Who thinks tax increases and defense cuts alone will solve the problem? We need the economy to hit normal levels again and then the defense cuts and tax increases will be sufficient to creqate a small surplus (over the long term we will need to reform medicare and lift the cap on social security). ---
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [February 28, 2012, 4:48pm UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/276 "2012-02-28T16:48:51Z")
> [@Damuri\_Ajashi](#): > > BTW, I echo Voyager. Please cite for billions in corruption waste and fraud. Do you guys seriously question this? Will [Barack Obama and the White House](http://www.whitehouse.gov/the-press-office/president-obama-announces-new-effort-crack-down-waste-and-fraud) do as a cite? > [@](#): > > Each year, the federal government wastes billions of American taxpayers’ dollars on improper payments to individuals, organizations, and contractors. These are payments made in the wrong amounts, to the wrong person, or for the wrong reason. In 2009, improper payments totaled $98 billion, with $54 billion stemming from Medicare and Medicaid. We cannot afford nor should we tolerate this waste of taxpayer dollars and in our health care system. ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [February 28, 2012, 5:00pm UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/277 "2012-02-28T17:00:51Z")
> [@amarone](#): > > I have no problem paying taxes if those taxes are for the general welfare. The citizens are robbed of billions though, through corruption in the government, waste, fraud, abuse, bloated entitlements, etc. > > > [@whitehouse.gov](#): > > > > In 2009, improper payments totaled $98 billion Naturally, nobody thinks waste, fraud, and improper payments are a good thing, but let’s keep this in perspective: these improper payments totaled less than a hundred billion dollars in a federal budget of over two trillion or two thousand billion dollars. That’s less than five percent of the total budget. That percentage should certainly be smaller, but it’s senseless to demand that it should be zero. Making budget scrutiny tight enough to eliminate absolutely **all** waste and fraud would cost more than small amounts of waste and fraud themselves cost, besides making government operation far more inefficient. So the existence of a small percentage of misspent money in the federal budget is not a convincing argument that the whole tax system is fucked. ---
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [February 28, 2012, 5:04pm UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/278 "2012-02-28T17:04:33Z")
> [@Kimstu](#): > > Naturally, nobody thinks waste, fraud, and improper payments are a good thing, but let’s keep this in perspective: these improper payments totaled less than a hundred billion dollars in a federal budget of over two trillion or two thousand billion dollars. That’s less than five percent of the total budget. > > That percentage should certainly be smaller, but it’s senseless to demand that it should be zero. Making budget scrutiny tight enough to eliminate absolutely **all** waste and fraud would cost more than small amounts of waste and fraud themselves cost, besides making government operation far more inefficient. > > So the existence of a small percentage of misspent money in the federal budget is not a convincing argument that the whole tax system is fucked. You misquoted me - I did not write what you included before the [whitehouse.gov](http://whitehouse.gov) quote. I have made no comment about what can/should be saved or how significant it might be. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [February 28, 2012, 5:08pm UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/279 "2012-02-28T17:08:43Z")
> [@Nana](#): > > Why do so many “reasonable” people cheat on their taxes? > > The rate doesn’t matter? I contend it does. I have no problem paying taxes if those taxes are for the general welfare. The citizens are robbed of billions though, through corruption in the government, waste, fraud, abuse, bloated entitlements, etc. > > I am still forced to pay them though. They will simply attach my wages. > > If we taxed everyone who makes more than $1,000,000,000 a year at 50% it would not begin to bail out the mess we are in. We must also cut. And not just the military, that won’t be enough. Where else are the liberals willing to actually make the tough calls? All I hear is raise taxes, cut military. I would love to have Washington actually address this. Each additional IRS employee brings in several times his or her salary by enforcing compliance of part of the tens or hundreds of billions of dollars in legitimately owed current taxes not being paid. Yet the IRS keeps being cut as part of cutting government spending. Would you be in favor of increasing the IRS? ---
**Author:** ![Enderw24](https://avatars.discourse-cdn.com/v4/letter/e/ba9def/32.png) [@Enderw24](https://boards.straightdope.com/u/Enderw24)\ **Post date:** [February 28, 2012, 5:31pm UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/280 "2012-02-28T17:31:36Z")
> [@Kimstu](#): > > Naturally, nobody thinks waste, fraud, and improper payments are a good thing, but let’s keep this in perspective: these improper payments totaled less than a hundred billion dollars in a federal budget of over two trillion or two thousand billion dollars. That’s less than five percent of the total budget. A hundred billion here, a hundred billion there. Call me when it adds up to some real money, why don’t you? It is one hundred BILLION dollars, being totally wasted. Not used on programs you disagree with. Wasted. In a vacuum that’s a huge amount of money\* But then you argue that it’s “only” 5% of the budget. Sorry if that doesn’t do a thing to alleviate the situation. 5% is huge and completely unacceptable. \*it would have to be a pretty large vacuum or else it gets clogged. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [February 28, 2012, 6:33pm UTC](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492/281 "2012-02-28T18:33:23Z")
(Disclaimer: I just opened this thread, starting at #201 (my “Page 2”); read for a little while; despaired that confusion get only get worse; and clicked Reply. Sorry if this has been asked and answered.) > [@mr.jp](#): > > One thing I should say is that I am not probably not in favour of low taxes for the rich. … > > What I have an argument about is that we should tax them in the optimal way, and that we should be honest about how much we are actually taxing them. @ **mr. jp** - Mitt Romney is presently worth about $200 million. Would you please try to guess, in very rough terms, what portion of this was salary and what portion was capital gains? If it helps you do the estimation, Romney’s salary as Governor was $1/year. Please don’t say the salary/gains ratio is irrelevant to your argument. If your estimate is sensical, I think you’ll find that one of your thought experiments involves taxing earned income at 2000% or more, which seems to me to make your thought experiment … odd. [Previous page](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492.md?page=13) [Next page](https://boards.straightdope.com/t/romney-and-taxes-morally-unfit-to-be-president/610492.md?page=15)