reply to post by Kharron
If you'll look at Mitt's returns, almost all of his income is investment income, long term gains to be specific. He doesn't have wages, ordinary
income from a business etc. he's got some directors fees and whatnot but, primarily, he's sitting on income that is taxed at 15%.
Whether his accountants, or some other financial advisor (or he did it himself), structured his investments is not known but, when clients come to see
me and they are starting a business or an investment vehicle, the first thing we talk about, after they give us the rundown of the investment or
business, is how to structure it so that you get to keep as much of your income as possible.
I'm not saying that I can take your tax return and find you a lower tax bracket. I'm also not saying I can't. I've had clients come to me from
big firms and I've found mistakes that cost the client money in the past. I'm merely pointing out that Mitt's set his little empire up so that he
gets income streams from tax favorable sources.
Think of it this way. You come to see me and you just inherited one million dollars. We run through a variety of investment ideas, we look at fully
taxable investments vs muni bonds and triple tax free investments, which pay less but cost nothing. Then we decide where to put your money.
Of you go see your current guy and he says he's got an investment advisor who's bringing in 20% returns. Well, that sounds great so you decide to
go with better returns and you wind up paying 35% for short term gains, interest etc whereas with my investments you might have earned 5% and paid
It's all in the planning.
years ago I had a client who invested $5,000 in a small flavored water company that, perhaps you've heard of - vitamin water. The company was sold
to coca cola a few years later and his 5 grand was worth about 1 million dollars. The majority of that income was 15% tax rate because it was nothing
more than long term capital gains. Should he have paid a higher rate because he made so much money? No. He got lucky and stuck gold. If coca cola
had purchased the company within the first year of his purchase, it would have cost him an additional 20% in federal tax.
People railing about Romney paying 14% simply don't understand the taxes and they don't understand the idea behind tax planning and tax
Personally, I'm disgusted by the concept of not reporting the charity, in full, as a means of making his tax rate higher. It's my job to save your
money from the greedy government hands so it goes against everything I stand for to willingly give them more than they are entitled to.
Of course, what we don't know is who the charity was that didn't get reported. I wouldn't be surprised if the name Romney was in the name of one
charity. Wealthy families, like Mitt's, usually have a charitable foundation set up so they can donate huge sums of money to the foundation,
minimizing the taxes and then the foundation pays out 5% of the assets. Basically, moving money into a protected "business" that might own the
homes of the family members etc.