By way of Ezra Klein we glean this Twitter insight from Norh O'Donnell about Obama's proposed "Buffet Rule" creating a 30% tax rate on incomes over $1 million:
@NorahODonnell: Obama Buffett rule would essentially double Mitt Romney's taxes
Do tell. I'l grant that if the millionaires minimum tax worked as advertised, Mitt Romney's effective tax rate (at the personal level!) would roughly double from 13.9% to 30%. But a notable portion of his income is capital gains, including the controversial carried interest capital gains held over from his Bain days.
The decision to sell an asset, take a gain and pay the tax is often entirely voluntary and driven by a number of factors one of which is inevitably the taxes due. E.g., per the Times we see that Mr. Romney picked up roughly $759,000 in long term gains by selling shares in Goldman Sachs. That may have been viewed as vital political window-dressing, or it may reflect a dubious view of the outlook for financial sector. But if Romney's effective tax rate were doubled, the question of selling those Goldman shares may have been decided differently, as would many of the other decisions made by Romney's investment advisors.
Which suggests that doubling Romney's effective rate will prompt him to hold some of his assets and defer gains, thereby reducing his net realized capital gains; this means his total taxes paid will not double.
And will his tax bill rise at all? Back in 2002 the CBO concluded that informed opinions vary on that question:
The sensitivity of realizations to gains tax rates raises the possibility that a cut in the rate could so increase realizations that revenue from capital gains taxes might rise as a consequence. Rising gains receipts in response to a rate cut are most likely to occur in the short run. Postponing or advancing realizations by a year is relatively easy compared with doing so over much longer periods.
...
Careful studies have failed to agree on how responsive gains realizations are to changes in tax rates, with estimates of that responsiveness varying widely.
...Estimates of the revenue effects of capital gains tax changes by the Congress's Joint Committee on Taxation (JCT) and the Treasury's Office of Tax Analysis (OTA) also take into account how realizations respond to tax rates.(6) In 1990, when the Congress considered a 30 percent cut in the rate on gains, OTA estimated that such a cut would increase revenues by $12 billion over five years; the JCT projected a loss of $11 billion. If they had not factored in a realizations response, the two agencies would have estimated revenue costs of $80 billion and $100 billion, respectively--effectively illustrating how large a behavioral response is incorporated in capital gains revenue estimates.
To which I will add - there is an obvious political gaming element to this. For example, suppose a huge bipartisan majority passed a bill which raised the capital gains rate to 30% immediately and then by 1% every year for the next decade (call it the Dem Dream Act). Realized capital gains might surge as investors figured that, onerous though it may be, the rate would only go up over time.
Or as an alternative, imagine that by some quirk that dwarfed the legendary Scott Brown/ObamaCare machinations Obama actually managed to receive and sign a bill raising the capital gains rate this year. Given the history of that rate (Kennedy cut it, Reagan cut and raised it, Clinton cut it, Bush cut it) a reasonable investor might choose to wait Obama out, figuring the rate will be cut soon enough, by Obama or his successor. Realized capital gains would shrivel and the prophecy of an eventual cut would probably become self-fulfilling. Romney's effective tax rate of 30%, after being applied to a much lower income figure, might actually result in his tax bill falling. We can only imagine Ms. O'Donell's surprise.
Obama is aware of these arguments, of course, even if Ms. O'Donnell is not. Here is our Community Organizer-in-Chief addressing revenue versus fairness back in a 2008 debate:
GIBSON: All right. You have, however, said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, "I certainly would not go above what existed under Bill Clinton," which was 28 percent. It's now 15 percent. That's almost a doubling, if you went to 28 percent.
But actually, Bill Clinton, in 1997, signed legislation that dropped the capital gains tax to 20 percent.
OBAMA: Right.
GIBSON: And George Bush has taken it down to 15 percent.
OBAMA: Right.
GIBSON: And in each instance, when the rate dropped, revenues from the tax increased; the government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down.
So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?
OBAMA: Well, Charlie, what I've said is that I would look at raising the capital gains tax for purposes of fairness.
So Obama's drama is not about raising revenue, it's about the appearance of fairness. Well, if Mitt Romney pays a 30% tax on $7 million of reported income under Obama's plan, appearances will be preserved. And his taxes will fall.
Per Weasel Zippers (linking a WSJ article):
Oh, and Norah O'Donnell is a dunce.
Posted by: centralcal | January 25, 2012 at 07:10 PM
Posted on last thread, but seems more at home here...
He has an excellent point. It won’t really hurt him if the payroll tax cap is removed for earned income. But how about Cap Gains? No payroll taxes there.
Include both with no cap, then Romney can whine about double-taxation.
http://abcnews.go.com/blogs/business/2012/01/warren-buffett-and-his-secretary-talk-taxes/
Posted by: Benjamin Franklin | January 25, 2012 at 07:16 PM
Yeah, I remember all the MSM stories about how John Kerry paid a low tax rate, while Bush & Cheney both paid higher rates.
Er actually, no, I don't recall any stories about that.
Anyhow, yes, it's fabulous how the left absolutely ignores actual human behavior.
Posted by: qrstuv | January 25, 2012 at 07:25 PM
Obama's SOTU ratings continue to decline. Down 12% from 2011; down 21% from 2010.
Posted by: centralcal | January 25, 2012 at 07:29 PM
Well, Charlie, what I've said is that I want Paul Krugman to like me.
Posted by: Barry Dauphin | January 25, 2012 at 07:35 PM
Good job on the title, TM.
Posted by: Threadkiller | January 25, 2012 at 07:52 PM
I've been trying to explain how taxes work to people for decades.... they shrug and pretend it does not matter.
IMO ... if you are hoping to illuminate the issue for anyone prone to believing that tax rate manipulation such as that being promoted by the left actually are a good thing... then you are completely wasting your time.
There is a reason leftards are the way the are and it precludes any ability to apply logic in a meaningful way.
Posted by: OMMAG | January 25, 2012 at 08:02 PM
The secretary is one of the 1%! Now that is damn funny, course I like the scenes in cartoons where the cigar blows up in the guy's face too....
Posted by: Gmax | January 25, 2012 at 08:03 PM
I'm shocked CC - some rube on Kudlow just said the approval rating for the SOTU was 90%.
Posted by: Jane | January 25, 2012 at 08:03 PM
And off topic I go. Here is a ".gov" site in need of some screen captures:
“Interpretation 324.2 Reacquisition of citizenship lost by marriage.”
Interpretation 324.2 (a)(3) provides:
“The repatriation provisions of these two most recent enactments also apply to a native- and natural-born citizen woman who expatriated herself by marriage to an alien…” (Emphasis added.)
Then, Interpretation 324.2(a)(7) provides:
“(7) Restoration of citizenship is prospective . Restoration to citizenship under any one of the three statutes is not regarded as having erased the period of alienage that immediately preceded it.
The words “shall be deemed to be a citizen of the United States to the same extent as though her marriage to said alien had taken place on or after September 22, 1922″, as they appeared in the 1936 and 1940 statutes, are prospective and restore the status of native-born or natural-born citizen (whichever existed prior to the loss) as of the date citizenship was reacquired.” (Emphasis added.)
And again, Interpretation 324.2(b) provides:
“The effect of naturalization under the above statutes was not to erase the previous period of alienage, but to restore the person to the status if naturalized, native, or natural-born citizen, as determined by her status prior to loss.” (Emphasis added.)
http://www.uscis.gov/ilink/docView/SLB/HTML/SLB/0-0-0-1/0-0-0-45077/0-0-0-48438.html
Three times in this official INS Interpretation – currently published by the Obama Administration – native-born and natural-born are given separate consideration. And in the third example – from Interpretation 324.2(b) – the INS clearly states that each delineation, “naturalized, native, or natural-born citizen“, is a separate status.
http://naturalborncitizen.wordpress.com/2012/01/25/the-current-ins-officially-recognizes-a-delineation-between-natural-born-and-native-born/
Posted by: Threadkiller | January 25, 2012 at 08:03 PM
he must have been following this rocket surgeon, Jane;
http://video.ca.msn.com/watch/video/durbin-sotu-solid-basis-for-bipartisan-work-in-2012/17y2vy7vf?from=
Posted by: narciso | January 25, 2012 at 08:13 PM
Walker, people create jobs, not the government.
A couple protestors tried to yell over his opening, sounded like they were dragged out of the room.
Posted by: henry | January 25, 2012 at 08:16 PM
Walker, jobs available but lack skilled workers to fill them. Jobs policy to focus on returning veterans.
Posted by: henry | January 25, 2012 at 08:19 PM
Walker, new task force to cut regulations. Expand mining up north (EPA eat your hat).
Posted by: henry | January 25, 2012 at 08:22 PM
Hey henry, you're listening too I take it.
Posted by: PD | January 25, 2012 at 08:24 PM
Walker, solved $3.6 billion budget deficit while adding $1.2 billion to Medicare -- unlike Illinois.
Posted by: henry | January 25, 2012 at 08:26 PM
Hi PD, got it on TV. Between us we may convey what he says.
Posted by: henry | January 25, 2012 at 08:27 PM
Yeah, I'm on the new thread.
Posted by: PD | January 25, 2012 at 08:28 PM
Keep going Henry. I'd love to watch it.
BTW a friend called today and said Gov Patrick used the exact same words about one of the school issues in his speech.
I bet Axelrod wrote both.
Posted by: Jane | January 25, 2012 at 08:28 PM
TK;
They should post a pic of you in the dictionary next to the word
persistance,
Cautionary note....I remember a job interview for Sub Rosa Investigator wherein the question was asked;
"What's your strongest trait?
Answer: "Persistance"
What's your weakest?
"Persistance"
Posted by: Benjamin Franklin | January 25, 2012 at 08:30 PM
Henry,
Go to the new thread.
Posted by: Jane | January 25, 2012 at 08:31 PM
Another screaming idiot dragged out. Walker, I'll be a good steward of tax dollars. Wants to reform education. Hits WEAC insurance as robbing education money.
Posted by: henry | January 25, 2012 at 08:31 PM
When cutie pie Nora first appeared on TV she couldn't even pronounce ordinary three syllable words. She's improving.But there's only so much you can do with that raw material.
Posted by: clarice feldman | January 25, 2012 at 08:42 PM
http://www.freerepublic.com/focus/f-news/2837825/posts
Breaking News: Obama's Attorney In Georgia Ballot Challenge Refuses To Appear At Hearing
The letter to the judge is at the link. It it mostly sour grapes.
Posted by: Threadkiller | January 25, 2012 at 08:51 PM
I don't know Clarice, I think just being on MSNBC, and hanging around Matthews, is like
when Dave Bowman started pulling the memory modules out of HAL:
O'Donnell was heavily criticized by conservatives for her interview of a Sarah Palin supporter attending a book signing. While speaking with people in the line, O'Donnell pointed out the inconsistency of Jackie Seal, a Palin supporter, wearing a shirt against the Emergency Economic Stabilization Act of 2008, which Palin supported. Several conservative hosts and bloggers, most notably Glenn Beck, criticized O'Donnell for the interview. O'Donnell wrote on Twitter that she had voted in the 2008 election; however, Jackie said she was 17 years old and therefore did not vote in the election.[9]
Posted by: narciso | January 25, 2012 at 08:51 PM
"When a lawyer files complaints and motions without a reasonable basis for believing that they are supported by existing law or a modification or extension of existing law, that lawyer abuses her privilege to practice law. When a lawyer uses the courts as a platform for political agenda disconnected from any legitimate legal cause of action, that lawyer abuses her privilege to practice law…."
Well, I would certainly be keeping my ears open for drones in the neighborhood, TK.
If downloading movies from the internet makes it possible to execute warrants in New Zealand, there should be some cause for
concern by LAWYERs pimping their services for political fools.
Posted by: Benjamin Franklin | January 25, 2012 at 08:58 PM
It gets better. From the Georgia Secretary of State:
http://obamareleaseyourrecords.blogspot.com/2012/01/obamas-attorney-jablonski-slapped-down.html
Posted by: Threadkiller | January 25, 2012 at 09:13 PM
If you fuckers keep ignoring me, I'll keep cutting and pasting the same shit into every thread.
Because I have persistance [sic].
ME ME ME ME ME ME ME ME ME ME!
Posted by: Benjamin Franklin | January 25, 2012 at 09:17 PM
Hardly a slapdown.....wishful thinking, tk?
The Office of Secretary of State
January 25, 2012
VIA REGULAR MAIL & EMAIL
Michael Jablonski260 Brighton Road, NEAtlanta, Georgia [email protected]
RE: Georgia Presidential Preference Primary Hearings
Dear Mr. Jablonski:I received your letter expressing your concerns with the manner in which the Office of StateAdministrative Hearings ("OSAH") has handled the candidate challenges involving your client andadvising me that you and your client will "suspend" participation in the administrative proceeding. WhileI regret that you do not feel that the proceedings are appropriate, my referral of this matter to anadministrative law judge at OSAH was in keeping with Georgia law, and specifically O.C.G.A. § 21-2-5.As you are aware, OSAH Rule 616-1-2-.17 cited in your letter only applies to parties to a hearing. As thereferring agency, the Secretary of State's Office is not a party to the candidate challenge hearingsscheduled for tomorrow. To the extent a request to withdraw the case referral is procedurally available, Ido not believe such a request would be judicious given the hearing is set for tomorrow morning.In following the procedures set forth in the Georgia Election Code, I expect the administrative law judgeto report his findings to me after his full consideration of the evidence and law. Upon receipt of thereport, I will fully and fairly review the entire record and initial decision of the administrative law judge.Anything you and your client place in the record in response to the challenge will be beneficial to myreview of the initial decision; however, if you and your client choose to suspend your participation in theOSAH proceedings, please understand that you do so at your own peril.I certainly appreciate you contacting me about your concerns, and thank you for your attention to this matter.
Posted by: Benjamin Franklin | January 25, 2012 at 09:19 PM
at least the cock can spell........lol
Posted by: Benjamin Franklin | January 25, 2012 at 09:20 PM
Obama is aware of these arguments, of course
I doubt Obama is aware of anything right this second besides that Maryland leads Duke by eight and you can't get the same quality weed in DC that you could at Occy or Hawaii.
Posted by: bgates | January 25, 2012 at 09:22 PM
Well he hasn't filled out the brackets yet;
Posted by: narciso | January 25, 2012 at 09:27 PM
Actually he just had a big visible fight with Governor Brewer at the airport in AZ.
Posted by: Jane | January 25, 2012 at 09:28 PM
http://www.investors.com/image/TOONFNL0126.jpg.cms
Ramirez again--
Posted by: clarice feldman | January 25, 2012 at 09:31 PM
As Newt said the dispute was over a passage in Brewer book, talking about how dismissive, condescending and rude Zero was. And to prove her wrong, he acts in public childish, petulant and rude. Gosh makes me think she described the encounter exactly right.
Posted by: Gmax | January 25, 2012 at 09:33 PM
I'd be more than rude to the Gorgon, but i don't mean avoiding her
crazee eyes through reflective glass.
Posted by: Benjamin Franklin | January 25, 2012 at 09:36 PM
OK I understand most of the nominations, but these, are a poser;
http://www.washingtonpost.com/blogs/celebritology/post/oscars-nominations-the-shockers-from-demian-bachir-to-jonah-hill-poll/2012/01/24/gIQAGO22NQ_blog.html
Posted by: narciso | January 25, 2012 at 09:43 PM
Just love the Ramirez cartoon, Clarice!
Posted by: centralcal | January 25, 2012 at 09:54 PM
He's so brilliant. He can convey in one drawing what it takes NR 20 pp of blather to do.
Posted by: clarice feldman | January 25, 2012 at 09:57 PM
Duke back on top. God in his Heaven.
Posted by: MarkO | January 25, 2012 at 10:00 PM
"...a reasonable investor might choose to wait Obama out,"
That is the distilled essence of the whole thing. Expecting Norah O'Donnell to understand it--or even to be curious about it--is expecting a chimpanzee to undertand the aurora borealis.
Posted by: Danube of Thought | January 25, 2012 at 10:11 PM
Nora O'Donnell has attributes beyond a lovely face? Who new?
Posted by: DrJ | January 25, 2012 at 10:30 PM
*knew?*
Posted by: DrJ | January 25, 2012 at 10:37 PM
Love the title.
This article bears repeating:
But the leftards refuse to learn this lesson, and insist taxation policy is the key to government solvency . . . to avoid the unthinkable sin of failing to bring home the bacon. I'd like to think innumeracy is the problem; but there's no way an honest person with a high school or better education could fail to total the sums if he gave the issue a fair look. Hence . . .Posted by: Cecil Turner | January 25, 2012 at 10:47 PM
CT, it seems to me we're wasting our breath with all of those incontrovertible facts. The Left is uncomfortable with them, and it has unprincipled liars at its disposal to say dishonest things about them.
Demagoguery has scored many an important victory over time, and I know of no reason to expect that it can't and won't do so again right here this year.
Posted by: Danube of Thought | January 25, 2012 at 11:06 PM
At your own peril.
========
Posted by: And that of your client. | January 26, 2012 at 09:37 AM