Donald Douglas has a tremendous post up concerning how the media is covering the use of tax shelters by the two men vying for the presidency
Exhibit A this afternoon is the lead editorial at today’s New York Times, “Mr. Romney’s Financial Black Hole” via Memeorandum. Folks can read it all at the link. The editors really go off on Romney, attacking him for the alleged moral transgression of not releasing even more tax returns, and especially for his financial portfolio, which includes a number of offshore investments designed to reduce tax liability (a tax strategy that any good tax adviser would recommend). But for all the editorial’s outrage and bluster (which zeros in on Romney’s lingering ties to Bain), here’s the key passage:
Firms like Bain park money in the Caymans because the islands have no taxes on capital gains, profits or income for foreigners. But just because it’s legal doesn’t mean it’s the right thing to do.
OK, if that is how they feel, fine. I disagree. I would ask why the United States does not follow the example of the Cayman Islands. Or, if the Times is so upset over these “loopholes” then why not take Obama to task for not trying to close them? But then again, I do not have an agenda like the Times does. I would love to see our tax laws simplified greatly. Flatten, and lower the rates, end the punitive rates that tax some Americans at a higher rate than others, and allow many Americans to pay nothing. End most of the deductions too. But until that happens, I will not blame anyone for using the deductions and loopholes as best they can, and that includes Romney and Obama, who BOTH use shelters!
President Obama and his wife, Michele, gave a total of $48,000 in tax-free gifts to their daughters, according to tax records made public on Friday.
The president and his wife separately gave each daughter a $12,000 gift under a section of the federal tax code that exempts such donations from federal taxes.
There is nothing illegal about the president’s taking advantage of this tax shelter, but it does raise eyebrows given that he has lamented the myriad tax exemptions used by the wealthy—“millionaires and billionaires” like himself—to pay less in taxes. He hasyet to propose a comprehensive plan to reform the byzantine tax code.
The Obama’s tax return indicates that the gifts, likely for their daughter’s college educations, began in 2007, when the maximum exemptible amount was $24,000 per couple. The maximum exemption has since increased to $26,000 per couple.
The Obamas paid a total federal tax rate of 20.5 percent on a gross adjusted income $789,674, which would typically fall within the top federal rate of 35 percent. According to an analysis of the president’s tax return, he may have paid a lower rate than his secretary despite making more than eight times as much money as she did.
Now, I would say here that 20.5% is TOO MUCH for any American, or any corporation to pay in income taxes! Do you hear that Liberals? I, and ALL Conservatives want EVERYONE that pays income tax to pay LESS! Liberals call this greedy. As if wanting all Americans to benefit from their hard work is greedy. Liberals, of course, are the truly greedy ones, seeking to get more and more of everyone else’s money. As I said before, gut the exemptions and lower and flatten tax rates! Making the tax codes simpler, note not “fairer” as Democrats always call for. We all know that Democrats use the word fair to defend the Marxist vision of spreading the wealth around.
An added benefit to simplifying the tax codes would be that the IRS could be shrunk. If you eliminate most of the ways for people to cheat on their taxes, you lessen the need for much of the spending on running the IRS. And, that, of course is the real issue here. It is not a lack of revenues that has America in a hole, it is the spending that far outpaces the inflow of revenues. Again, the Times might point this out, if they did not have re-electing Obama, rather than helping America to fiscal sanity, as their number one priority.