COLUMBUS GROVE, OH – AUGUST 25: Republican vice presidential candidate U.S. Rep. Paul Ryan (R-WI) speaks to supporters on August 25, 2012 in Columbus Grove, Ohio. Ryan and presumptive Republican presidential nominee, former Massachusetts Governor Mitt Romney, are campaigning together leading up to the Republican National Convention beginning August 27 in Tampa, Florida. (Image credit: Getty Images via @daylife)
The Debt Ceiling Deal
On Sunday September 9th 2012, presidential nominee Mitt Romney denounced the debt ceiling deal that helped to avert an overwhelming government debt default in the US. This despite the fact that one of the deals supporters is his current running mate Paul Ryan.
Mitt Romney called the deal between the White House and the congressional Republicans “a mistake”. He went on to say that the deal would cut our defense budget badly.
Lawmakers agreed to the deal at the 11 hour back in August 2011. The agreement was for $1 trillion in spending cuts over the next 10 years. This followed by the promise to impose another 1.2 trillion to deficits. Paul Ryan backed last year’s deal while head of the House of Representatives Budget Committee.
Romney stated that he thought the deal was a mistake on the part of the White House, and a mistake on the part of the Republicans to go along with it.
Paul Ryan said on CBS recently that he supported the deal because they needed to find common ground with President Obama and the Democrats. But that Republicans had proposed ways of cutting back wasteful Washington spending.
Mitt Romney told NBC that the White House’s sequestration plan of $1.2 trillion would severely cut our defense budget. Unless automatic spending cuts are implemented by year’s end, beginning Jan 2nd $1.2 trillion over ten years would come out of our defense budgets, not affecting 2011 taxes.
Mitt Romney‘s 2012 taxes have been subject to extensive scrutiny and he has been cast a one of the wealthy elite. The truth is percentage wise he pays more in taxes than most American households, which is an effective tax rate.
The average middle class household may be taxed at thirty-five percent, but with deductions and other tax exemptions, a family making between fifty to seventy-five thousand dollars may only pay around six percent. Many families owe no taxes or pay extremely low taxes. Conversely, the tax rates for people making over one-million dollars per year is approximately nineteen percent. Many families in this country benefit from the same tax rates as Romney. Anyone who has investment income is taxed at fifteen percent. He does not belong to a special group with unique privileges; he is taxed at the same rate on capital gains, as any other investor. Tax rates can be interpreted in many ways to make them look as though someone is not paying their share. The truth can become obscured and a regular taxpaying citizen can be painted as a greedy capitalist. The average person works hard and the percentage of their income that goes to taxes is often examined carefully.
Mitt Romney pays his taxes and he may actually pay more than most citizens. The government is currently faced with a huge deficit, unemployment, and myriad economic problems. Instead of looking at his tax rate, people should look at his success rate and how he plans to move this economy forward.
The current capital gains taxes on investment income are fifteen percent. While the taxes on the middle class wages are around thirty-five percent. Mitt Romney admitted recently that he pays only fifteen percent on his total yearly income. The Occupy Wall Street movement has not faded from voters’ memories or the specter of the wealthy one-percent. Romney found himself identified as a member of this affluent group.
There has been serious debate as to whether lower capital gains taxes will help the economy. Top economists do not agree on the effect of lower taxes investment income. Some contend that lower taxes on investment income will generate economic growth. Other studies do not confirm there is a correlation between lower taxes and increased investment activity. Over the years capital gains tax has fluctuated from almost forty percent during the mid-seventies to the present fifteen percent. It is noted that savvy investors will not be deterred from a good investment opportunity, even when there is a higher tax rate. There is no suggestion that a higher investment income tax reduces investment activity.
A down market can shape investment activity, when it comes to the buying and selling of stocks. A major concern of the average American is whether the Romney’s of the world, pay their share of the taxes. High unemployment and a poor economy have the non-investors questioning their higher tax rates and 2012 taxes. Lowering the capital gains tax may not alter the market, but it may influence how people vote.