reply to post by xuenchen
it's hard to determine the tax rates without seeing the tax returns. For starters, Romney probably has a lot of long term capital gains that are
taxed at a lower rate than the ordinary income tax rate.
It's important to note that the reporters aren't giving you detailed information on the actual taxes or the expenses, other than the charity.
Romney, for example, has 13 million in income but some of that could be income earned, and taxed, from overseas activity (investments). So, let's
say he has 10 million in foreign income that is taxed by that country and, for argument's sake, let's say that the foreign country has a 30% tax.
So he pays 3 million to the foreign goverment and he gets a tax credit for the 3 million here. Now, let's say that the income he was taxed on was
all long term capital gains rate income. So the tax here, on ten million, at 15%, would be 1.5 million. He gets credit for the 3 million paid, up to
but not more than, the taxes he owes here. So, on the ten million, he'd pay no tax because it was already paid elsewhere and the US government has a
tax treaty with the other nation so that Romney doesn't get double taxed.
The reporters now tell you Romney made ten million dollars and paid no tax, the people grab their pitchforks and go berserk when, in reality, Romney
This was not based on my seeing the tax returns and there's always the possibility that he doesn't have foreign tax credits or other tax credits
that would reduce his total tax bill but it's something that the reporters don't tell you that helps paint the picture they are looking to paint.
Until I see the returns, I don't care what's reported about them. They're meaningless. You can't judge the numbers without seeing them and
understanding them. Much like you wouldn't look at someone's surgically repaired knee and discuss how the doctor screwed up the joint by looking at
the scar, you can't judge a guy's tax returns just be hearing he made X, paid Y and donated Z.
Actually, I take that back. The income and donation numbers show that both men give a healthy portion of their income to charity but I'd be curious
to see how generous they were before they had their eyes on the white house.