Archives For Mitt Romney

Thanks to an improving economy and expiring tax cuts, 43% of U.S. households will not have to pay federal income taxes this year, according to the non-partisan Tax Policy Center. That number is lower than Mitt Romney‘s 47%, which he stated last year during his presidential campaign. Continue Reading…

Senate Finance Committee Chairman Max Baucus (D-Mont.) and the panel’s top Republican, Utah’s Orrin Hatch are attempting a ‘blank slate’ approach to the current U.S. tax code.

In turn, the Senators are wiping out all the tax provisions now in the code and are now putting the onus on their supporters to prove why the provisions should be left in the code. The have until July 26th left to make their point.

Baucus and most Democrats say the government needs new revenue. They say not all the money gained by scrapping tax breaks should go to lowering tax rates. Most Republicans, including Grover Norquist, president of Americans for Tax Reform, take the opposite view. Norquist, on Wednesday, threw his support behind the latest bid by Senate tax writers to overhaul the U.S. tax code.

“A revenue-neutral reform target is an absolutely essential precondition to any tax reform,” Norquist wrote. “Tax reform should not be a stalking horse for a net tax increase.” Norquist listed several other steps senators should take including eliminating taxes on capital gains and dividends

Politico has released what it thinks are some of the tax breaks currently in the tax code that could be purged and possible lobbyists’ responses to the suggested reform. Continue Reading…

Tax-related issues took center stage in 2012. Between the drawn-out fiscal cliff negotiations, Romney’s 47% comment, the persistence of the Occupy movement, updated rules from the IRS and the presidential election, there was no shortage of tax talk. The talk becomes reality for Americans tomorrow (Jan. 30, 2013), when the IRS officially begins the 2012 tax filing season. In this post, we outline the highlights, predictions, changes, opinions and other worthy information on the 2012 tax filing season.

Continue Reading...

Remember when Mitt Romney couldn’t shake his image as a hoity-toity rich guy who made too much money and paid too little taxes? Well, now that he’s out of the spotlight the tax-obsessed media has found a new rich guy to tee off on: Phil Mickelson. Like Romney, he’s a wealthy man whose personal taxes have come under public scrutiny. Phil’s problem is the exact opposite of Romney’s though; according to him, he pays too much!

Continue Reading...

Oops.

Whether he meant to or not, Mitt Romney just created a serious situation for himself in this presidential election.  Here is the videotape of Republican presidential nominee Mitt Romney writing off 47 percent of the electorate. Those Americans, Romney told a group of potential donors, won’t vote for him because they’re getting a sweet, non-taxpaying deal under President Obama.

My job is not to worry about those people,” Mitt Romney said of the 47 percent of Americans who, according to a tax think tank study, did not pay federal income taxes in 2011. “I’ll never convince them they should take personal responsibility and care for their lives.”

After the video hit the Internet and airwaves, Romney tried to explain his comments as just part of the political process, the process of campaigns.

“I want to keep my team strong and motivated and I want to get those people in the middle and that’s something that fundraising people who are parting with their money are very interested in, knowing can you win or not, and that’s what this was addressing,” Romney explained in a press conference Monday night.

OK, whatever it takes to get the big checks. I get it. I live in the D.C. area and the folks forking over the dollars are big boys and girls. They know they’ll be told what they want to hear.

I also understand frustration with folks who don’t pull their weight. Nobody likes freeloaders.  Every one of us has had a friend or relative who was inordinately dependent on our goodwill until we eventually got tired of it.

However, Romney and those citing the various percentages of non-taxpayers are forgetting some details.

There are indeed a large number of Americans who each year don’t pay any federal income tax.  The latest figure is not quite the 47 percent cited by Romney, but instead 46.4 percent.

Image

That figure came from a July 2011 study, “Why Some Tax Units Pay No Income Tax,” by the Tax Policy Center (TPC), a Washington, D.C.-based partnership of the Urban Institute and the Brookings Institution.

TPC says a tax unit is an individual, or a married couple who file a tax return jointly, along with all dependents of that individual or married couple.

While Romney and others stopped at that 46-to-47 percent amount, they conveniently ignore that while these folks might not pay federal income taxes, many of them did pay other taxes, most notably payroll taxes.

More than 28 percent of those who didn’t pay income taxes still handed over money to Uncle Sam via payroll taxes, the paycheck withholding amounts that fund Social Security and Medicare.

As the payroll tax’s name indicates, these folks were on a payroll, working, not sitting at home with a beer in one hand and in their other the remote to the big-screen HD TVs that they bought with welfare checks.

The jobs they had, however, didn’t pay enough for them to owe, after they claimed their deductions and any tax breaks for which they qualified, any federal income taxes.

That then leaves just slightly more than 17 percent of Americans (or tax units in the TPC vernacular) in 2011 who escaped both federal income and payroll taxes.

Who are these people who, in Romney’s words, “are dependent upon government … [and] believe they are victims?”

They primarily are elderly people living on Social Security, a system they had to pay into in order to receive benefits, and younger individuals who are making less than $20,000 a year.

And, oh yeah, less than 1 percent of no-tax-at-all group falls into the “other” category. Some of those nonpayers are likely at the other end of the income spectrum.

IRS data show that a handful of high-income households manage to owe no income tax some years. In those cases, they get their income from tax-exempt bonds or from overseas for which they get foreign tax credits.

Location, location, location: Finally, it’s interesting to look at where all these nontaxpaying folks live.

While Romney says he can’t count on the 47 percent who aren’t paying federal income taxes, he might want to fact check himself.

A 2010 study by the Tax Foundation found that nine of the 10 states with the most nontaxpaying residents are in the South.

If you (or the Romney campaign) check every pollster’s presidential election map, you’ll find most of those states are solidly Republican when it comes to picking a president.

JDKatz, P.C. is a full-service law firm focused on tax law and estate planning. We are dedicated to minimizing your existing liability and risks while providing valuable tax planning to streamline your tax issues in the future. Please call us at 301-913-2948 to schedule an appointment to meet with one of our trusted attorneys.

Republican Presidential candidate, Mitt Romney, has released his tax returns for 2010, showing a remarkably lower tax rate than the average American taxpayer. Mitt Romney earned about $21.6 million in income while paying $3 million in taxes. However, that only amounts to a 14% tax rate while the top 1% of U.S. earners paid on average a 24% tax rate. So how does Mitt Romney pay a significantly lower tax rate?

In short, he has capital gains. Capital gains are taxed at a top rate of 15% if the investment is held for more than a year. The reason the rate is low is to provide incentives for investors to make capital investments, pursue entrepreneurial activities, and account for the volatile corporate income tax. Romney’s other advantage is his impeccable tax preparation. With a 203 page long 1040 return, Romney has almost a full house of schedules and a plethora of other forms attached. In addition, the Romneys do not take off a mortgage-interest deduction or deductions for a home office, car or travel expenses.

Romney’s returns do not disclose the entire wealth of his family because he is not required to report any underlying wealth, investment returns or fees as a percentage of invested assets. However, it is important to understand the different tax codes the wealthy can utilize just as much as the poor can utilize their tax codes.

At JDKatz, P.C., we have a strong understanding of the the nations extensive tax codes and we can help identify deductions and exemptions
that are allowed when filing your returns. Do not hesitate to call us at 301-913-2948.