The Mittster

[kraft-t]

Quote  " ABOUT 15%"   Mostly capital gains income. Other candidates think the CG rate ought to be zero so Mitt would only have to pay ZERO!

[hardnox604008]

And, I think, carried interest. Which is the special loophole for hedge funds and private equity that Bush rammed through.

Poor lil' fellers.  Like Mr. Cooperman said, their plight is like the defenseless Poles before the Panzers.

[hardnox604008]

As you and I have discussed many times, the fairest rate for capital gains is the same as on earned income less indexing for inflation.

Fair isn't going to happen because the majority of capital gains are reaped in the financial sector and are relatively short term in nature, therefore they would pay at or near the earned income rate.

Which in their view would be grossly unfair.

BTW, just for curiosity I looked up an inflation value calculator on line and I put in $400 for 1960, thinking that might be a decent number for an acre of prime MW farmland. It kicked out 2911 for 2010.

More musings- the argument that hedge and private equity funds are important to the economy therefore they should enjoy lower rates may be true or maybe not. But I think it fails the same test as the guys who say they are going to shut down their businesses and go sulk if the top rate is raised from 34 to 37 percent- or not make investments to add jobs.  People do crazy things all the time but the rational response to expansion is still a matter of estimation of future demand and price for product or service. Same thing for these boys- either you can deliver the returns or you can't. Just attracting funds becasue of tax advantage is a joke.

If they're POed about paying 3% more then I guess they're making money doing what they currently do. Or maybe not, Joe the Plumber wasn't.

[Nebrfarmr]

I can't really see why they want capital gains tax at zero.  The regular income tax rate, indexed for inflation thing, I like.  However, I would wonder if there shouldn't also be some sort of income averaging for long-term assets.  For example, someone who owns a stock for a year or two, would pay the 'income' on it.  However, long-term capital investments, such as farmland, or a factory, or even a building, was probably something that they paid many years on, and the income could be spread out maybe over 5 years or something.  My father spent 20+ years of his life, paying off every cent of the land he bought in the 80s, with no debt write-downs.  We just bucked up, sacrificed, and got it paid for.  I think it would only be fair to let him take the 'income' over more than one year, for something he worked so hard, for so long, to attain.  That is a far different situation, than some investment banker, who trades in and out of stocks all the time, or a day trader on the board, or even someone who buys and flips houses.

[BA Deere]

First of all, this is so far only spectulation of what Mitt`s taxes are....  What isn`t mentioned about Capital Gains is that the minimum 35%the distribution IS TAXED before exiting the entity that he or she is getting a distribution on.   THEN he or she paysthe ADDITIONAL 15% on the distribution!! His or her NET TAX on that distibution is 50%!!  ...You are wellcome very much!!

[hardnox604008]

Wha?

I think what you're saying is the oft raised argument that capital that goes into an investment asset has already been taxed once.

OK, then a farm's income should not be taxable on the portion that is retained earnings- only income on the borrowed portion would be taxable.

Which, like carried interest, would be seen as wonderful from those who would benefit. But I think we can agree that whatever a fair taxation regime is, that probably isn't part of it. It would merely create a lot of distortions and unintended consequences. 

[bruce MN]

Good overview:

http://www.americanprogress.org/issues/2011/02/te022311.html

[schnurrbart]

"...so far only speculation..."  WTF?  He said it was about 15%.  Either he is an idiot who doesn't know or he is stumbling around trying to dodge the bullet.  But, of course, I know you have to defend him--a rich repub.  Can't be having him pay taxes!!!

[hardnox604008]

Sure, seems absolutely fair and reasonable.

Also quite reasonable to lower brackets across the board and cut loopholes.  Which would result in partial relief for heavy hitters, just not the selective relief that they have paid their politicos for and expect to receive as part of the bargain.

[BA Deere]

Mitt should say"I pay an effective rate of 50%. If I didn't get hit with 35% before it left the entity then I would be getting 35% more, right? Right so half my inflow goes to federal tax". Of course no one on the left will give a crap, even if the tax was 100% they'd want more!