Romney's Money | Taxes vs Tithe

[Kathryn]

Maybe you need a better business model. Our business has thrived equally under both administrations.

Personally and professionally, my family and extended family have also done well. We haven't done as well in the stock market or on interest earned on savings, but we've benefited from lower interest rates when it comes to our home mortgage and borrowing power, and our business has grown quite a lot, which means an increase in actual income.

Not that I don't realize it could all go to hell in a handbasket given the perfect financial storm -but so far so good.

Personally, however, I see a lot of truth to the accusation that our current tax structure is weighed in favor of the wealthy and burdens the middle class (though it definitely does NOT burden lower income classes - I'm AMAZED at the size of most tax refunds!).

If you own a business, there are many, many tax shelters and tax breaks that are not available to the average Joe. So even though your tax bracket may be significantly higher, if you have a good CPA and a good business plan, you can end up paying a lower percentage of your income in taxes than the middle class guy working for someone else pays.

This seems like a good way to go broke as a country. Hey, wait -isn't that pretty much what's happening? Send people a "refund" for more than they even paid in, and then don't collect enough in taxes from the wealthy, and expect Joe the Sales Manager to carry the brunt of the tax load, while the owners of his business try to decide whether or not to move their production line to Mexico to get out from under union costs...

THIS WON'T WORK!

 

[religion99]

When a person has investment capital, they already paid taxes on that money that is theirs.

There is a big difference between income and investments.

If you have a contract and will receive money for working, that is guaranteed income.

When you invest, some times you lose your investment. Because of that risk, the tax rate is lower.

If you raise the capital gains tax, you change the risk reward scenario.

People may decide to not invest if the taxes are raised. Think about it, investors who stop investing that do not have a job would owe zero taxes.

Mitt Romney is the perfect example. He could live off his money for the rest of his life and never work or invest again. In this example, his tax liability would be zero.

Rich folks could vote with their feet and leave the country and invest elsewhere taking their money with them.

Hasn't person who earn interest income already paid taxes on Principal?

 

[9-10ths_Penguin]

Hasn't person who earn interest income already paid taxes on Principal?

Probably, but the interest is not the principal.

 

[religion99]

Probably, but the interest is not the principal.

Same is true for "capital gain".

 

[religion99]

Bond and "Fixed Deposits" are also investments. Why should they pay more tax?

 

[Reverend Rick]

Out of curiosity, why do you blame Obama? Is it just because the changes in the economy happened while he was President? Because I think those changes were largely the fault of Bush... to the extent that they're the fault of any President.

There's been talk about him putting in a requirement that contractors working on stimulus projects will have to be American (thereby excluding Canadian companies, likely in contravention of NAFTA, IMO). If that happens, I'll blame Obama for some of what happens in my industry, but I'm not sure exactly what it is you're blaming him for.

I'm blaming him for all the new rules my very well qualified customers have had to endure to get financing.

Projects used to get off the ground quickly, now they languish in the mire.

These are projects that have been repeated over and over and no one has defaulted on them or even stumbled. They have been successful and continue to be successful.

We used to bang out several a year and now we are lucky to do one every two years.

With less work brings more competition and lower profit margins.

This is starting to change because much of my competition has gone under.

Business will be good for the last man standing if we just can get a Republican in the White House.

It could be mental, but the perception of the business climate is almost as important as the business climate it's self.

Right now we have too many uncertainties.

People pay slower if at all.

Material prices are unstable

It is riskier to do business.

 

[9-10ths_Penguin]

Same is true for "capital gain".

What are you talking about? Often, capital gains are interest income.

 

[9-10ths_Penguin]

I'm blaming him for all the new rules my very well qualified customers have had to endure to get financing.

Projects used to get off the ground quickly, now they languish in the mire.

I'd call that the swing of the pendulum from the dangerous under-regultion of financing and banking under Bush. Don't you remember the whole sub-prime mortgage meltdown and the credit default swap fiasco?

And maybe Kathryn can give us the inside scoop, but my impression is that the difficulties in financing aren't just a result of regulation, but also from banks' own decisions to tighten up credit availability.

These are projects that have been repeated over and over and no one has defaulted on them or even stumbled. They have been successful and continue to be successful.

We used to bang out several a year and now we are lucky to do one every two years.

With less work brings more competition and lower profit margins.

This is starting to change because much of my competition has gone under.

Business will be good for the last man standing if we just can get a Republican in the White House.

It could be mental, but the perception of the business climate is almost as important as the business climate.

Right now we have too many uncertainties.

People pay slower if at all.

Material prices are unstable

It is riskier to do business.

Exactly what did Obama do to make your clients pay slower? Did he call them and tell them to do it?

And what do you think Obama has to do with material prices?

 

[religion99]

What are you talking about? Often, capital gains are interest income.

Interest income, the staple for the middle class , is taxed at your normal income
tax rate.

 

[Kathryn]

Hasn't person who earn interest income already paid taxes on Principal?

Probably, but earned interest is earned income. We generally pay taxes on earned income.

Which is why a Roth IRA can be a pretty good investment. You pay taxes on the principal but don't pay taxes on the earnings.

Right now, though, interest rates are so low that Roths don't seem all that sexy.

 

[religion99]

Probably, but earned interest is earned income. We generally pay taxes on earned income.

Which is why a Roth IRA can be a pretty good investment. You pay taxes on the principal but don't pay taxes on the earnings.

Right now, though, interest rates are so low that Roths don't seem all that sexy.

Unfair.

 

[Kathryn]

And maybe Kathryn can give us the inside scoop, but my impression is that the difficulties in financing aren't just a result of regulation, but also from banks' own decisions to tighten up credit availability.

Sort of. Actually, simplistically put, it's a combination of the two.

Say a bank took TARP money. In this case, there are additional regulations and restrictions that the bank has to comply with - and they are not necessarily bad. One of those restrictions is that they can't make some of the loans they made in the past - riskier loans. They are MORE accountable for their lending decisions in other words.

Example - the bank I work for took some TARP money. Not the first, mandatory round of it which was doled out to banks which were floundering, but the second round which was optional - government loans with low interest rates, which the bank then used to finance some investments and acquisitions.

Now the bank has to answer to the government - in other words, it's more accountable and more transparent. In order to show more fiscal responsibility, the bank determined that it would raise it's minimum credit score for loans in order to reduce risk. Probably a good idea - and would have been a good idea even before TARP.

So now the minimum credit score is raised - not to some unreasonable number but to a moderately good score - under 700 but over 640, depending on the type of loan.

Personally, I think that's prudent - but it's also because of more stringent government regulations and requirements.

Meanwhile, due to other economic factors, individual and company credit scores have fallen on average. So - it's a triple whammy actually. More regulations, more conservative lending formulas, and battered credit scores.

 

[Kathryn]

Unfair.

How so?

 

[Reverend Rick]

I'd call that the swing of the pendulum from the dangerous under-regultion of financing and banking under Bush. Don't you remember the whole sub-prime mortgage meltdown and the credit default swap fiasco?

Small residential loans should not have affected large commercial and industrial loans. We are talking about folks with millions in income 800 credit scores and billions in assets, not some yahoo who signed a variable rate mortage. . The problem was with first time borrowers, not people who have done dozens of projects.

And maybe Kathryn can give us the inside scoop, but my impression is that the difficulties in financing aren't just a result of regulation, but also from banks' own decisions to tighten up credit availability.


Exactly what did Obama do to make your clients pay slower? Did he call them and tell them to do it?

And what do you think Obama has to do with material prices?

When Obama spent 2 trillion dollars a year over what we took in taxes, we got down graded and the market freaked and ran to commodities and over inflated them.

I'm not going to acknowledge your other comment, I thought you where being serious.

I respect your difference of opinion, but trying to act like Obama is good for the economy and you really believe I think Barry told people not to pay me is not playing your A game with me.

We don't have to have a lower caliber debate portraying your opponent as delusional, your doing a fine job in this debate without going there.

 

[religion99]

How so?

Debt and Equity are both part of capital structure. Hence it is unfair to tax them at
differrent rates.

 

[9-10ths_Penguin]

Small residential loans should not have affected large commercial and industrial loans. We are talking about folks with millions in income 800 credit scores and billions in assets, not some yahoo who signed a variable rate mortage. . The problem was with first time borrowers, not people who have done dozens of projects.

Of course the one would affect the other: they're both drawing from the same pool of available credit. When Person A defaults on his loan, that money doesn't go back to the bank to loan it to Person B, regarless of B's credit score.

When Obama spent 2 trillion dollars a year over what we took in taxes, we got down graded and the market freaked and ran to commodities and over inflated them.

And why did he spend that much? To stop a liquidity crisis and an economic collapse. When the last guy wrecked the place and the new guy asks you to help pay for the bill for the cleanup, whose fault is it?

I'm not going to acknowledge your other comment, I thought you where being serious.

I respect your difference of opinion, but trying to act like Obama is good for the economy and you really believe I think Barry told people not to pay me is not playing your A game with me.

We don't have to have a lower caliber debate portraying your opponent as delusional, your doing a fine job in this debate without going there.

I'm really just trying to understand your reasoning. I just don't see the link between Obama and your problems. It seems to me that you're blaming him for things that are beyond the power of the President.

I think Obama's made some bad decisions, but he's also made good ones, and on the whole, I think he's been a whole lot better for the economy than Bush ever was... it's just that a lot of the bad (or even catastrophic) decisions under Bush's watch took a while before their full effects became obvious.

 

[Kathryn]

Debt and Equity are both part of capital structure. Hence it is unfair to tax them at differrent rates.

Sorry - not following you. What's the correlation between a Roth IRA and debt?

 

[religion99]

Sorry - not following you. What's the correlation between a Roth IRA and debt?

If I put deposit in Citigroup , I am giving Debt Capital to Citigroup.

If I buy equity of Citigroup , I am giving Equity Capital to Citigroup.

Why should these two investments attract different tax rates?

 

[Reverend Rick]

Of course the one would affect the other: they're both drawing from the same pool of available credit. When Person A defaults on his loan, that money doesn't go back to the bank to loan it to Person B, regarless of B's credit score.


And why did he spend that much? To stop a liquidity crisis and an economic collapse. When the last guy wrecked the place and the new guy asks you to help pay for the bill for the cleanup, whose fault is it?

Obama can only blame Bush for so long. At some point he has to own the economy.

I'm really just trying to understand your reasoning. I just don't see the link between Obama and your problems. It seems to me that you're blaming him for things that are beyond the power of the President.

You are right. The thing is, while it may not be true, I don't think Obama sympathizes with small business problems. Loans are our life blood and we did not default on anything yet we are suffering.

I think Obama's made some bad decisions, but he's also made good ones, and on the whole, I think he's been a whole lot better for the economy than Bush ever was... it's just that a lot of the bad (or even catastrophic) decisions under Bush's watch took a while before their full effects became obvious.

Not according to my bank account. That is what I know. Your mileage may vary.

 

[9-10ths_Penguin]

Obama can only blame Bush for so long. At some point he has to own the economy.

At some point, but we're talking about the worst financial crisis in the US since the Great Depression. That took a decade and a world war to get out of; Obama's had 3 years.

You are right. The thing is, while it may not be true, I don't think Obama sympathizes with small business problems. Loans are our life blood and we did not default on anything yet we are suffering.

I think that credit availability is better than it would've been if Obama hadn't implemented the measures he did. If you think it's hard to get a loan with the new lending rules, just think of how hard it would've been if your bank had gone under.

Not according to my bank account. That is what I know. Your mileage may vary.

But what does this mean? The only way I can make sense of it is as your way of saying that your bank account balance has gone down since Obama took office, but I don't see how you can make the leap from that to the conclusion that it went down because of Obama.