[quote]usmccds423 wrote:
Sure wish Obama would pay his fair share like all the other 1%ers
"President Barack Obama and First Lady Michelle Obama paid an effective tax rate of just 18.4% in 2012 federal income tax.
The figures, released by the White House, come as Obama included in his recently released budget the so-called ?Buffett Rule,? which would slap a 30% minimum tax on anyone earning $1 million.
The Obamas paid $112,214 in federal taxes and $29,450 in Illinois state income tax on an adjusted gross income of $608,611–$274,000 of which came from the president?s book royalties. The Obamas? gross adjusted income fell significantly from 2011, when it was $789,674 and even further from the $5.6 million in 2009.
During the 2012 presidential campaign, Obama attacked Republican rival Mitt Romney for having paid an effective tax rate of 15%. Romney paid a lower tax rate because the bulk of his income was derived from investments.
The Obamas? tax filings also reveal that the first couple donated 24.6% to charity, a sum still under the 29.4% the Romneys donated in 2011. Vice President Joe Biden and Dr. Jill Biden increased their charitable giving last year from 1.5% in 2011 to 1.87% in 2012."
[/quote]
I admittedly don’t know much about the US tax system but I was taught to always ask questions so let’s examine the case here. The President’s main source of income is from his book royalties. Are these types of income streams taxed differently (less) than income from wages and salary? If not, look at his deductions. Were they all mandatory? Likely. Why would anyone exclude legally eligible deductions - it doesn’t make sense whatever your economic goal.
Another question: Why is he only giving 25% to charity and why is Romney giving more? The decreasing marginal utility of money of course. Logically, Obama is saving more money for eventual retirement that is quickly approaching. We’ve already established his main source of revenue comes from book royalties. That income stream will dry up eventually unless he writes more books. Now, there’s no doubt he will have other income opportunities either in the public or private sector but he’s looking at his current financial situation in gauging his financial plans.
On to Romney – he’s loaded. He has substantial asset holdings from which he derives income that is taxed at a lower effective rate – we know that. What it means is that he doesn’t really need to save as much relative to Obama. His savings comes from income reinvestments and god knows how many other investment vehicles. Plus, he has large income potential from serving as a director on company boards, if he isn’t already. Overall, he can capitalise on his prominence in the business community. So if he doesn’t need to save as much he is able to donate more to charity.
A secondary and affiliated point is that we have to be mindful of the time period this information is disclosed and debate engaged. We’re relying on information disclosed amidst a political contest and at the end of it. Both guys’ returns are likely window-dressed and more importantly, they only show us the tax liabilities of the most recent tax periods – we have no historical benchmarks. Sure, we could look back 4-5 years but we’d still be looking at information that may not be representative of both politicians’ previous tax records.
EDIT: You can say Obama was hypocritical for attacking Mitt Romney for only paying 15% in taxes but don’t forget it was during a goddamn political contest. Politics is politics, it’s grimy and about spinning issues. Obama is a brilliant politician - on that Bill Clinton level, him targeting Romney on his taxes and the infamous 47% was an effective strategy that worked.