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An American is taxed about 35% of their wage income (if they are in a high tax bracket). That American is taxed about 15% on their investment income (assuming the income is long term gains). So, why is it surprising that Romney, who has about 250 million in wealth, but has a wage income under one million, is paying net taxes of about 15%? Almost all of his income is from long term capital gains. The other (less wealthy) candidates pay higher net rates on income because they have less wealth, and their income comes much more from wages than investments.
Is the publicity about this the start of efforts to raise the capital gains tax or is it merely an obfuscation of a political nature to attack Romney?

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A big chunk of that is actually carried interest from Bain Capital ($13m over the two years according to CNBC.)

I don't know what the strategy is here, though. Gingrich seems to be making it an attack against Romney. But there doesn't seem to be a lot of political will around messing with the capital gains tax structure. Obama's millionaire surtax is just stupid--- we'd be a lot better off just reverting the capital gains tax back to 1997 levels. (It certainly seems like we've run this particular experiment long enough to see that it hasn't paid off in a big way.)

Not that big a chunk if it is over two years, but good point.

I agree completely with the second paragraph.
Thanks Mark!

The other (less wealthy) candidates pay higher net rates on income because they have less wealth

I'm not sure what you're trying to say here, but if you're trying to point out that the "progressive" tax system we have is actually regressive, you're doing a good job of it.

I was really just pointing out the obvious numbers in the math, how could anyone really expect Romney's tax rate to be much higher given the nature of the types of income he has?

But yes, the tax regime is regressive. I think the Cap Gains tax rate should be raised, even though I also think that money has (indirectly) already been through the tax mill once, since corporations have already paid tax on their earnings. But the system is too loose in that regard, open to too much craftiness and too many deductions, so that money should be taxed twice. I don't think a long term Cap Gains rate in the mid--20s would be onerous, and is reasonable. Not politically though, these guys can't even see their way to raising the Gasoline tax, and every factor is screaming that tax should be higher.
Thanks, Andrew!

even though I also think that money has (indirectly) already been through the tax mill once

You could make the same argument about regular income tax. All money goes through the mill an unbounded number of times.

It isn't surprising to those who know how taxes on investments work. I suspect that is a small percentage of people. Mostly it won't seem *fair* to anyone paying 35% on a *vastly* smaller income. I think I paid more than 15%, and I am near the poverty line.

You did not pay 15% of your income*(1) in taxes*(2). Holy crap math is bad in this country*(3).

If you really did earn close to the poverty level (single person is $10,890 per HHS) SOME of your income may have been in the 10% bracket (I'm taking you at your word here).

But before any taxes are calculated the deductions come off. If you don't itemize and only take the standard deduction ($5,800) and one exemption ($3,700) then you have to earn over $9,500 to pay any taxes at all, and over $18,000 to move into the 15% bracket*(4). Being in the 15% bracket does not mean you pay 15% on ALL your income, only that part of the taxable income OVER $8,500.

Taxes on $12,000 of hourly income ("close" to the poverty level, you may be single, standard deduction other simple assumptions) will be $250, or 1.67% of your income.

Anyhoo, I hope most people paying 35% are smart enough to understand the difference between wages and capital gains. They should be, to pay any part of your salary at 35% you have to earn over $380,000- presumably these are bright people.

1. Wages, salary, hourly pay.
2. Don't confuse Social Security with taxes. It is going into a lockbox, it is money for your retirement. Al Gore said so.
3. If you are a foreigner, you have no excuse.
4. Single tax brackets- up to $8,500 - 10%, $8,500-34,500 - 15%, $34,500-83,500 - 25%

You are welcome to do my taxes if you'd like. Suffice it to say, many of your assumptions are off.

Any assumptions that are off would cause you to pay less in taxes than this simple, back of the envelope calculation. If you have dependents, are head of household or are married you would get larger deductions. If you earned significantly more than $12,000 then you lied about being near poverty level.

If you seriously paid 15% of your total earnings in federal income taxes then you had to have earned over $60,000 if you were single, a lot more if you are married.

I made my case. You are making stuff up.

Amazing that you know so much more about my finances than I.

But I will tell the IRS that you have volunteered to pay all my tax obligations over 1.67%. Thanks.

I think in the abstract people understand that capital gains is taxed at a lower rate. But Romney is a living person that they can point to, in a year when you don't necessarily want to get pointed at for that. It's kind of funny, for months people have said, "what is Occupy Wall Street going to accomplish, they have no leader, no main goal." Yet, the whole 1% thing kind of has resonated and now I suspect there is a good chance it will cost Romney the nomination, as he is a living embodiment of what is kind of jacked up with the system.

Basically, he was born rich, and got significantly richer by burying companies in debt, pulling out huge "dividends" and leaving them to go bankrupt, meanwhile he pays a lower percentage of taxes than Joe the Plumber and has chunks of his wealth parked offshore in Swiss banks. It's even worse when you factor in payroll taxes & self employment taxes that wage slaves pay. I think a lot of people see the actual numbers and say, "wow, that's kind of fucked up." Since they already don't like the guy that much, it sticks. I suspect GWB had similar tax rates, but I don't think it would have stuck as well, particularly in 2000 when everyone was getting rich.

Nail right on the head.

I know this is an older post but...honestly I couldn't agree with you more. You speak the truth my brother!

Is the publicity about this the start of efforts to raise the capital gains tax or is it merely an o

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