Romney says he pays about 15 percent in income tax

[EpyonXero]

Originally Posted by Amber Lamps

What? I don't think that either of our monies should be spent on this bs.... You are missing my point, Romney is paying his LEGAL amount of tax. I don't care how you slice it. He is within the legal parameters. In stead of whooping and hollering about how he doesn't pay "his fair share" and btw, Obama gives a speech about how he doesn't need the Bush tax cuts but yet doesn't give it back at the end of the year.... Romney refused a salary when he was Governor..... What about that, hmmmm? If I win $1,000,000 and take the $400,000 the govt will be nice enough to allow me to keep, invest it and gain $100,000. I will have to pay $15,000... You all seem to think that it should be more..... WHY?!?!?! $1,000,000-600,000+ 100,000-15,000= $485,000 I still "lost" over $500,000 from my perspective, you all are pissed that I have $485k.... What if I lose all of my money? Are you all going to give me money back to cover my loses? Of course not. I haven't seen a dime from my loses on my 401k......

Thats how the average person gets their "investment income," this is how guys like Mitt Romney get their investment income:

Because the manager is compensated with a profits interest in the fund, the bulk of his or her income from the fund is taxed, not as compensation for services, but as a return on investment. Typically, when a partner receives a profits interest (commonly referred to as a "carried interest"), the partner is not taxed upon receipt, due to the difficulty of ascertaining the present value of an interest in future profits.[8] Instead, the partner is taxed as the partnership earns income. In the case of a hedge fund, this means that the partner defers taxation on the income that the hedge fund earns, which is typically ordinary income (or possibly short-term capital gains), due to the nature of the investments most hedge funds make. Private equity funds, however, typically invest on a longer horizon, with the result that income earned by the funds is long-term capital gain, taxable to individuals at a maximum 15% rate. Because the 20% profits share typically is the bulk of the manager's compensation and because this compensation can reach, in the case of the most successful funds, enormous figures, concern has been raised, both in the U.S. Congress and in the media, that managers are taking advantage of tax loopholes to receive what is effectively a salary without paying the ordinary 35% marginal income tax rates that an average person would have to pay on such income.
To address this concern, U.S. Representative Sander M. Levin introduced H.R. 2834 on June 22, 2007, which would eliminate the ability of persons performing investment-adviser or similar services to partnerships to receive capital-gains tax treatment on their income. [9] On June 27, 2007, Henry Paulson said that altering the tax treatment of a single industry raises tax policy concerns, and that changing the way partnerships in general are taxed is something that should only be done after careful consideration of the potential impact, although he was not speaking only about carried interest.[10] The U.S. Treasury Department addressed carried interest specifically in testimony before the U.S. Senate Finance Committee in July of 2007.[11] U.S. Representative Charles B. Rangel included a revised version of H.R. 2834 as part of the "Mother of All Tax Reform" and the 2007 House extenders package.
A line item on taxing carried interest at ordinary income rates was included in the Obama Administration's 2008 Budget Blueprint.[12] On April 2, 2009, Congressman Levin introduced a new and substantially revised version of the carried interest legislation as H.R. 1935.[13] Proposals were again made by the Obama Administration for the 2010[14], 2011[15] and 2012[16] budgets.

Most of Romneys money comes from Bain Capital carried interest. This isnt interest from something Romney purchased in the past with his own money, this a cut of the profits from his companys earnings thats he is paid in compensation for work he did, in other words a salary. He only pays tax on it one time and its 15%.

[Papa_Complex]

Originally Posted by EpyonXero

This isnt interest from something Romney purchased in the past with his own money, this a cut of the profits from his companys earnings thats he is paid in compensation for work he did, in other words a salary. He only pays tax on it one time and its 15%.

Then it's a loophole that really needs to be closed; take a $100K salary and then $20M in stocks. It should be a taxable benefit, with investment style taxation after the initial hit.

[shmike]

Originally Posted by EpyonXero

Most of Romneys money comes from Bain Capital carried interest. This isnt interest from something Romney purchased in the past with his own money, this a cut of the profits from his companys earnings thats he is paid in compensation for work he did, in other words a salary. He only pays tax on it one time and its 15%.

Carried Interest is the perfect example of getting paid only when you make your company/clients money.

[EpyonXero]

Originally Posted by shmike

Carried Interest is the perfect example of getting paid only when you make your company/clients money.

I guarantee you that Romney was getting a salary at Bain Capital in at least six figures before he got to the point where his covered interest contract could kick in.

[shmike]

Originally Posted by EpyonXero

I guarantee you that Romney was getting a salary at Bain Capital in at least six figures before he got to the point where his covered interest contract could kick in.

If he was earning six figures in income then he is paying SS, medicare and federal income taxes along the same schedules that everyone else is.

[Homeslice]

Originally Posted by shmike

Carried Interest is the perfect example of getting paid only when you make your company/clients money.

Salespeople also get paid only when they make money for their employer.

Yet every dollar they earn is taxed as regular income.

[shmike]

Originally Posted by Homeslice

Salespeople also get paid only when they make money for their employer.

Yet every dollar they earn is taxed as regular income.

Yep.

The more a sales person fucks over their customer, they more they get paid.