TAMPA, December 1, 2012 ― President Obama and the Democrats were successful in 2012 largely on the strength of some rather outlandish demagoguery. “Billionaires pay fewer taxes than their secretaries” was one slogan that was particularly successful.
The Obama campaign successfully made an issue out of Mitt Romney’s taxes, finally getting Romney to admit that he paid around 13% of his earnings in taxes over the past several years. The “fair share” crowd contrasted this with the higher percentage that would have been paid by a secretary in the 28% bracket, for example, who would still pay more than 13% even after deductions.
That Americans bought this specious argument is more worrisome than that the Democrats made it.
Romney’s tax percentage was low because most of earnings came from capital gains, not income. Capital gains are just what they sound like. They are the appreciation in the value of one’s capital. If you buy a stock at $5 per share and its price goes up to $7 dollars per share, you have realized $2 in capital gains. If you sell that stock at a $2 dollar profit, the government wants a percentage.
Right now, Mitt Romney would pay 35% income tax and 15% on capital gains. The average secretary would pay 15% income tax and 15% on capital gains. So, Romney’s tax liability as a percentage of income is more than double the average secretary’s. His tax liability on capital gains is the same. Obviously, Romney’s nominal tax payments in both categories would exceed the secretary’s by orders of magnitude.
That’s how things actually are out here in the real world.
So why is the tax rate on capital gains lower than on income? Because “capital,” by definition, comes from previously taxed income.
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TAMPA, November 4, 2012 – “Remember, remember the 5th of November.”
TAMPA, October 18, 2012 – Mitt Romney has been able to cruise through two debates with Barack Obama by utilizing a surprising strategy. When Obama has gone on the attack, citing the “draconian cuts” that the delusional on both sides of the aisle imagine Romney would propose as president, Romney has completely defused the president by simply telling the truth.
TAMPA, October 16, 2012 – Tonight, we will be subjected to another presidential “debate,” in which two candidates who agree that government is the solution to everything argue about whose central plan is better. With the questions coming directly from the electorate and super-liberal Candy Crowley deciding which ones to ask, there is not much chance that big government will be challenged by anyone.
TAMPA, September 6, 2012 — There was no big announcement during Ron Paul’s appearance on Jay Leno Tuesday night. On the contrary, Paul’s appearance was somewhat anticlimactic given Mitt Romney’s nomination at the Republican National Convention last week. Of course, he still said what he has been saying for over thirty years in public life: America must stop spending money it doesn’t have, must liquidate its debts and rethink the role of government as cradle-to-grave caregiver and policeman of the world.
TAMPA, September 2, 2012 – By the time of Marco Rubio’s speech at the Republican National Convention (RNC), rhetoric overload and sore feet had overcome any desire I had to listen. I sat down at a table in the corridor of the Tampa Bay Times Forum. A few minutes later, several young people sat in the other chairs.
TAMPA, August 27, 2012 ― Everyone knows what to expect from a political rally. Speakers recite the party line on various subjects. The audience already agrees with them and knows what they are going to say. The crowd cheers. The opposition is trashed. The crowd cheers again. The keynote speaker is introduced. Standing ovation. More talking points.
TAMPA, August 22, 2012 – As we approach the Republican and Democratic National Conventions with two major party candidates that don’t substantively disagree on anything, debate about the causes of the housing bubble and what should be done about it will inevitably recur.
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