Romney calls for tax cuts on savings (Details plan for those earning <$200,000

Boston Globe ^ | September 8, 2007 | Lisa Wangsness

[CheyennePress]

Mitt Romney rolled out one of the most detailed tax cut plans yet among the major presidential candidates yesterday, proposing to eliminate taxes on income from interest, dividends, and capital gains for the vast majority of Americans.

In several appearances in New Hampshire, Romney said his proposal, which would give the tax break to those earning less than $200,000 a year, would be a boon to the middle class.

"You can save your money for a down payment on a house, for a car, for a boat, for college for your kids, whatever the heck you want," he told about 75 people gathered at a coffee shop yesterday morning. "Government shouldn't be telling you they're going to tax you on your savings." ... The $200,000 limit applies to adjusted gross income, which includes salaries and investment income. So many wealthy people like Romney, a multimillionaire, whose investment income would take them over the limit, would not qualify for the benefit.

Eric Fehrnstrom, a spokesman for Romney, said the plan would not benefit the wealthiest Americans and pointed out that 95 percent of American households earn less than $200,000.

The campaign did not provide an average savings under the plan, but said that based on 2005 tax returns, more than 56 million taxpayers would benefit from eliminating the tax on interest, 28 million from ending the tax on dividends, and 23 million from killing the tax on capital gains. About 134 million individual returns were filed that year.

"It is a powerful incentive to save, and it's a generous benefit aimed at the middle class," he said.

Richard Holmes, 59, of Lebanon, N.H., a semiretired contract coordinator for a utility company, said the plan could help him when he retires and relies on his savings, as well as Social Security. But_he_said_he_also_liked_the_principle_of_the_idea.

[CheyennePress]

This is one way for the Republicans to begin seeking younger voters again, and really the whole middle class. It's also another way of addressing the failures of social security. Get the government's fingers off savings accounts and move the people towards financial independence.

Of course, given the failures of many to take advantage of ROTH-IRAs, well... But this cuts even the front end off of those.

Romney was the first to sign on to a pledge declaring that he would support no new taxes. He's also been at the forefront in bringing out specific tax cuts to his platform.

(I did excerpt out the usual cries from liberals about how these cuts meant nothing to the poor and how the average American income is $43,000 to get below the word limit. Click on the link and read those 2 paragraphs if you want.)

[mnehring]

If you want to feed a village, let the farmer plant his seeds, don’t take the seeds from him and feed people with those.

[aroostook war]

I like the plan of eliminating the IRS. Less messy.

[CheyennePress]

• Send FReep Mail to Unmarked Package to get [ON] or [OFF] the Mitt Romney Ping List •

[aroostook war]

Of course then government would have to rein in spending. So much for that.

[I see my hands]

After $200K it's yours Mitt? Why don't you be a man and try to take it from me face to face? Go ahead, punk, go for my wallet.

This class warrior can go to heck. Stupid lame smiling Communist.

[EternalVigilance]

[Man50D]

Mitt Romney rolled out one of the most detailed tax cut plans yet among the major presidential candidates yesterday, proposing to eliminate taxes on income from interest, dividends, and capital gains for the vast majority of Americans.

In several appearances in New Hampshire, Romney said his proposal, which would give the tax break to those earning less than $200,000 a year, would be a boon to the middle class.

There is a bill before Congress The Fair Tax Act Of 2007that will accomplish this goal but also abolish all Federal Income taxes. Visit Americans For Fair Taxation for more information. Fair Tax ping!

[Dante3]

Good for Romney. There should be no tax on interest.

[lonevoice]

This is one of the things about Romney’s platform that personally affects me in a very positive way. I currently earn about $35,000/year in interest income on taxable savings. The interest rate on savings is so low, and, combined with the taxability, it provides little or no incentive for Americans trying to save for retirement in order to maintain financial independence in their senior years.

[vetsvette]

“Government shouldn’t be telling you they’re going to tax you on your savings.”

I agree, but why then does he limit it to those making less than $200K/year. If it’s wrong for those making less than this arbitrary limit, it’s wrong for those making more.

Class warfare is no way to get my vote.

[tantiboh]

You keep saying things like that, EV. Try clicking your heels together three times; maybe it’ll come true.

[EternalVigilance]

Folks are danged tired of politicians offering to rearrange the deck chairs on the income tax Titantic.

It’s the same old tired divide and conquer games that have been played on the American people for the last ninety years.

Bleh.

[mtbopfuyn]

Too little too late. With the current rate of inflation and no raise in years, we’re going through the savings like crazy. Too close to retirement to switch jobs now.

[Global2010]

Amen!
I like that.

Did you write that?

[newzjunkey]

Taxing savings is one of the more stupid things we do.

[CheyennePress]

Ahhhhh.... all the purists come out of the woodwork. :)

I thought $200,000 was pretty generous, frankly. I was expecting about $150,000.

As far as addressing the issue of social security, I think this is a very good start. Knocking down the incentives to save makes saving all the more economical to spending. And really, once you get much beyond the daily costs of living, it becomes far easier to save.

The Citizens for Tax Justice guy was complaining that this didn’t help out the average American enough because he “only” makes $43,000, and this goes to $200k. I managed to put back some money when I was making far less than average.

The point is to encourage Americans to save and to wean them from government dependence. I think this would be a huge step in the right direction. And as someone a few years away from embarking on a professional career, this sounds pretty nice about now.

[Global2010]

Pinging my son.

There is your Nick Romney. : )

[taxcontrol]

Ok, I’m not following this 100%.

Case 1
Assume a person makes $150,000 and get $25,000 in a stock dividend payment. Total under $200,000 so does that me the $25,000 would not be taxed?

Case 2
Assume a person makes $150,000 and gets $75,000 in stock dividend payment. Would that be taxed or only the amount over $200,000?

[B4Ranch]

"Understanding Tax Cuts"


Sometimes politicians, journalists and the liberal left exclaim;
"It's just a tax cut for the rich!" and it is just
accepted to be fact.

But what does that really mean?

Just in case you are not completely clear on this issue, I hope the
following will help. Please read it carefully.

Let's put tax cuts in terms everyone can understand.

Suppose that every day, ten men go out for dinner and the bill for
all ten comes to $100.

If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.

The fifth would pay $1.

The sixth would pay $3.

The seventh would pay $7.

The eighth would pay $12.

The ninth would pay $18.

The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men ate dinner in the restaurant every day and seemed quite
happy with the arrangement, until one day, the owner threw them a curve.

"Since you are all such good customers," he said, "I'm
going to reduce the cost of your daily meal by $20." Dinner for
the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so
the first four men were unaffected. They would still eat for free.
But what about the other six men - the paying customers? How could
they divide the $20 windfall so that everyone would get his 'fair
share?'

They realized that $20 divided by six is $3.33. But if they
subtracted that from everybody's share, then the fifth man and the
sixth man would each end up being paid to eat their meal.

So, the restaurant owner suggested that it would be fair to reduce
each man's bill by roughly the same amount, and! he proceeded to
work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).

The sixth now paid $2 instead of $3 (33% savings).

The seventh now paid $5 instead of $7 (28% savings).

The eighth now paid $9 instead of $12 (25% savings).

The ninth now paid $14 instead of $18 (22% savings).

The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four
continued to eat for free. But once outside the restaurant, the men
began to compare their savings.

"I only got a dollar out of the $20," declared the sixth man.
He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only
saved a dollar, too. It's unfair that he got ten times more than me!"

"That's true!!" shouted the seventh man. "Why should he
get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison.
"We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for dinner, so the nine
sat down and ate without him. But when it came time to pay the bill,
they discovered something important. They didn't have enough money
between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how
our tax system works. The people who pay the highest taxes get the
most benefit from a tax reduction. Tax them too much, attack them
for being wealthy, and they just may not show up anymore.

In fact, they might start eating overseas where
the atmosphere is somewhat friendlier.