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Monday, October 24, 2016

Romney’s Returns Refute His Tax Argument

Feb. 9 (Bloomberg) — For all the attention devoted to Mitt Romney’s tax returns last month, one element went largely unnoticed: They directly refute the Republican candidate’s argument that higher tax rates deter capital investment.

Simply put, all of the investments made by Bain Capital LLC, the private-equity company Romney cofounded in 1984 and ran until 1999, occurred when capital-gains rates were much higher than they are today. Yet Bain consistently attracted massive amounts of private capital, and thrived.

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Copyright 2012 The National Memo
  • freethinker

    For the folks in Limbaugh’s Rio Linda, Buffett’s, “I have yet to see anyone…shy away from a sensible investment because of the tax rate…” needs a little clarification. “A sensible investment” at a 15% tax rate may not be so sensible at a 28% tax rate. The lower the tax rate, the easier it is to justify investing in something that is a little more risky or potentially offers a lower profit. Those kinds of investments also create jobs and we need jobs. And quit using the word, ‘fair’, when you can’t define it.

  • Leabrand

    Freethinker, so what are all those millionaires/billionaires going to do with their money if they don’t invest it ? Keep it in a mattress ? Buy CD’s ? Of course they’re going to invest it. And with the current historically low tax rate on capital gains we should already have a glut of investment created jobs – so where are they ?

  • Common Sense Patriot

    The Republican argument just doesn’t make sense that investment would dry up. Like one commenter said, what are they going to do, leave the money in a mattress? BUT, they can and do invest in other parts of the world where they have lower taxes on the money and they keep it there rather than bringing it home to the U. S. where they would have to pay taxes on it. So, I say, match what the prevalent tax rate is in other countries and set up a mechanism that will allow them to bring the money home to the U. S. — so long as the rate in total is equivalent to what they would get investing in a foreign country/company and parking the profits overseas. That’s “fair” and reasonable. Romney’s tax plan also calls for eliminating capital gains taxes and interests and dividends on those who make less than $200,000 a year. That would help a lot of middle income Americans. I worked my tail off to save money for retirement and now every time I take it out, I get hit with a major tax bill, and our household income was never more than $160,000 a year at the highest. Most years, it was less than $100,000, and that was only in the last 20 years of my working career. Before that, it was less than $80,000 and saving was difficult because after taxes, there wasn’t much left, particularly when helping my kids through college. But, today, as a retiree, I do okay, but take a huge hit every year from taxes on any money I withdraw from my 401K plan. I’m better off than most retirees, but I sacrificed a lot to save that money. So, I think Romney’s plan is good. What I don’t agree with is his proposal to eliminate all estate taxes. Those should be kept on any estates with a value of a million dollars or more. Multi-millionaires can afford to leave their kids a huge inheritance and still pay taxes on it.

  • Leabrand

    Common Sense Patriot – you bring up good points, overseas investments are especially counter productive to American economic recovery. I’ve proposed (in conversations) that the USA should tax the hell out of foreign investment capital gains not thinking about them leaving the proceeds there. But eventually the money would have to come home – and then could/should be taxed at a punitive rate.
    I feel for you though and your situation – seems a “special” lower tax rate should be applied to 401K withdrawls, especially for those under a certain income threshold. It’s hard watching all the yachts rise while all the skiffs are struggling in their wake.