Michael Scherer (Time): When Barack Obama talks about taxes these days, he likes to talk about Omaha billionaire Warren Buffett’s secretary …. but if Mitt Romney is able to clinch the Republican nomination for President next spring, Obama will have a better example to talk about.
That’s because Romney, a wealthy man whose income mostly comes from long-term investments, is exactly the sort of “millionaire and billionaire” that Obama likes to hold up for scrutiny, since the source of Romney’s income allows him to pay a lower percentage of his money to the federal government each year than many middle-class wage earners.
…. People who earn as much money as Romney typically make most of it in capital gains and often deduct more than they earn in royalties, salary and interest. In other words, they never pay the 35% rate that their income would be subject to if they just got a paycheck like most Americans.
…. Should Romney win the Republican nomination, he will face substantial pressure to release his own tax returns. Usually such disclosures are little more than formality, but in Romney’s case, it would land him in the middle of one of the biggest policy debates of this election season.
…. any tax reform plan put forward by Obama would likely have a significant impact on Romney’s returns. And perhaps more importantly, if Romney wins the nomination, Obama will have a great line to use in debates and on the stump. He wouldn’t just be running against Romney, he’d be running against the large tax advantage that a millionaire investor’s income provides.
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In sharp contrast to the rhetoric, current data suggests small businesses don’t create an outsized number of jobs, very few small business owners fall into the top two tax brackets, and tax cuts for small businesses are ineffective stimulus measures.
Relatively few small businesses would be affected: Extending the tax cuts for top earners for another decade would come at a significant cost – nearly $1 trillion in added debt over a decade. But small businesses wouldn’t see much of that cash. Only 2.5% to 3.5% of small businesses would be affected by an increase in those two rates.