A few days ago, The Atlantic noted that the multi-millionaire Mitt Romney would pay in taxes under the Paul Ryan budget. First, it should be noted that under the plan taxes on capital gains, interest and dividends would be axed. Capital gains means money made on investments (stocks, bonds, property). Interest is that money accrued in a money market fund, for instance, while dividends are simply payments made to stockholders by a corporation.
The majority of wealthy people—those like Mitt Romney—hold most of their wealth in capital gains, dividends and interest. Their net worth is largely created out of those numbers, not simply by how much money is in their checking account, which isn’t accruing interest.
According to the Atlantic’s number-crunchers, so much of Romney’s earning power comes from capital gains that Ryan’s plan would effectively bring his already-low 2011 tax rate of 15% down to under 1%—0.82 to be exact. ”Romney has structured his investments as ‘pass-throughs’ that avoid corporate tax. In other words, the 0.82 percent tax rate is really a 0.82 percent tax rate,” writes The Atlantic.
This is like the Buffet Rule in reverse.
If Romney would pay under 1% in taxes, it’s not so hard to imagine that many other wealthy members of society—the “heros” according to Ayn Rand and her acolyte Paul Ryan—are also similarly insulated from civilization’s parasites. The rich, as we have so often learned, are experts at hiding their money in various tax shelters.
With that sort of tax rate, one would expect Romney and the other wealthiest members of society to have been creating jobs left and right since 2007. So, where are the jobs?
Yep, they need more tax cuts of course to get those jobs flowing.
[Photo: AFP, Saul Loeb]