Wednesday, January 25, 2012

Doubling Romney's Tax Rate at Zero Cost While Moving Him Up to a Higher Bracket than Obama

Mitt Romney released his recent tax returns. He will pay $3.2 million in federal income taxes for 2011, representing 15.4% of his income.

Romney Tax Returns Show 2-Year Income of $45 million is the way the New York Times headlined the news. All about the money he made.

The Wall Street Journal's headline was Romney's Taxes: $3 Million. All about the taxes he paid.

Here's what Romney said about his taxes, as well as what the WSJ writer gratuitously added:

"'I pay all the taxes that are legally required, not a dollar more," he said. "I'm proud of the fact that I pay a lot of taxes.' His tax bill is significantly higher than the amount paid by most Americans."

The writer of the article said that $3 million in taxes is "substantially higher than the amount paid by most Americans." Here's my question to the writer. Who among us would have ever guessed that $3 million is more than most Americans pay? Thanks for telling us.

Both of the stories are accurate, of course, but there's much more to the Romney tax story. Let's tell it.

Mr. Romney paid the government $3 million, and he donated another $3 million to his church and others. That's a total of $6 million that passed from him to others in the form of either taxes or charitable contributions or donations.

Here's my own "gratuitous" guess about Romney's charity. $3 million is probably more than most Americans contribute to charity each year.

The aforementioned WSJ article said this about the charitable contributions:

"GOP presidential candidate Mitt Romney paid a 14% effective income tax rate in 2010 after making $3 million in tax-deductible charitable donations and drawing most of his income from investments, according to a summary of Mr. Romney's 2010 tax form provided by his campaign.

Mr. Romney reported $21.7 million in income. He paid $3 million in federal taxes, slightly more than the $2.98 million he made in charitable donations. At least $1.5 million of his charitable donations went to the Mormon Church."

President Obama often says that the wealthy should play by the rules and pay their fair share in taxes. Romney played by the rules, so I guess the only question is whether he's paying his fair share.

Accordingly, I have a suggestion to make sure that he does pay his fair share in taxes.

By one simple change, Mr. Romney would pay more taxes in percentage terms than President Obama pays, in addition to the millions of tax dollars more that he already pays, thus demonstrating beyond doubt that he's paying his fair share.

{And it won't cost him one single penny to do so. But we'll cover that hereinbelow.}

My guess, while not my hope, is that President Obama will be re-elected in November. If so, that means that the American people will have chosen to trust his judgment more than that of either Mr. Romney or Newt Gingrich, one of whom will most likely run as the unsuccessful Republican presidential nominee.

So here's my "free" advice for Mr. Romney to help clean up his present fat cat greedy private businessman image, and it won't cost him a thing. He should simply agree to pay $6 million in taxes instead of the $3 million that he owes.

By doubling the tax payment, he will demonstrate in unequivocal fashion that he trusts the government to do the right thing with respect to redistributing our citizens' money fairly. He'll admit that "government knows best."

To pay for this sudden burst of "patriotism" and final acknowledgement that government knows best, Romney would simply rescind his charitable contributions and convert that money into tax payments. And it wouldn't cost him a penny to do that.

That way the new "good guy" Romney would still have an annual cash outlay of "only" $6 million, but that $6 million will represent ~30% of his income in taxes paid, considerably more than the 26.3% paid by President Obama in 2010. The NYT article says this about Obama's taxes:

"Mr. Obama and his wife, Michelle, released their tax returns in April, showing an adjusted gross income of $1,728,096 for 2010 — much of it from sales of his books “Dreams From My Father” and “The Audacity of Hope.” The Obamas paid $453,770 in federal taxes, for an effective tax rate of 26.3 percent."

I can just see the headline now. "Romney Pays a Higher Tax Rate than President Obama. And for that matter, than Warren Buffett, too. Democrats, beware!" (For more presidential political gamesmanship, see Warren Buffett's Secretary to Attend State of the Union.)

And the best part is that it won't cost Romney one single penny to rid himself of his current greedy and wealthy fat cat image in the process.

As for the "unseen" contributions to the church and other donations that Romney won't be making any longer, that's easily explained as well. In government he's trusting to do the right thing. Government knows best.

Of course, the upcoming November vote will confirm the trust the people place in President Obama's wisdom and ability to do the right thing as we the people will elect Obama to a second term.

He'll know what to do with Romney's $6 million better than Romney could ever hope to know.

Maybe that move by Mitt would start a voluntary trend of converting money from private taxpayers to the public sector. If so, the government will have even more to spend for "our collective benefit and well being." And the budget will be balanced as well. Dream on.

In sum, giving the bureaucrats $6 million with which to do good things will enable them to do twice as much harm--er--good as they can now do with "only" $3 million of Romney's money.

It's as simple as going from MOM to OPM. The new and growing American way.

Maybe then Obama will decide to join Romney and pay more of his income in taxes, too.

Obama, Gingrich, the Clintons and other "public servants" have become rich by feeding at the public or government trough. That's how they got their personal money.

On the other hand, Mitt Romney made his money the unpopular and old fashioned way. He earned it in the private sector. Today that makes him a greedy fat cat in the eyes of far too many of our fellow Americans.

Now he's being maligned for "only" paying $3 million in federal income taxes. If he took my suggestion, soon he'd be maligned for paying only $6 million. and so on.

In any case, my silly tongue-in-cheek advice is for him to consider upping the ante to $6 million, stop donating to charity and the church, and trust the government insiders to do the right thing. Apparently that's what many of "we the people" would like for him to do.

If he does, that perhaps would please the populists of both political parties.

How much more nuts can things become in this silly election season? Who knows? Time will tell.

For now, my advice for you is actually quite straightforward and simple.

Let's all keep a good sense of humor as the year unfolds. We're going to need one.

Thanks. Bob.

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