Posts Tagged Barack Obama

Romney Talks of Ending Some Tax Deductions for Wealthy, NY Times

People continue to wonder how we will cut our deficit which is currently running over $1 trillion/year.  In the following article, Romney gives some clues as to what he is thinking regarding raising revenues and cutting expenses.  One idea in particular could harm our local economy.  Romney says he will consider eliminating tax deductions for wealthy second home owners.  He doesn’t give details of his idea but it probably includes not allowing folks to deduct interest payments on second homes.



Mitt Romney inadvertently offered a public preview of some of his economic plans on Sunday, revealing to high-dollar donors at a private fund-raising event that he wants to eliminate tax deductions for wealthy people who own second homes.

Mr. Romney’s comments were overheard by reporters standing outside the event on a sidewalk and first reported by The Wall Street Journal and NBC News. During the event, Mr. Romney also told the donors that he might eliminate the Department of Housing and Urban Development and reduce the size of the Education Department.

Mr. Romney told the donors that the housing agency “might not be around later” and said the Education Department would be “a heck of a lot smaller” even if it wasn’t eliminated altogether, The Journal reported.

“I’m going to take a lot of departments in Washington, and agencies, and combine them. Some eliminate, but I’m probably not going to lay out just exactly which ones are going to go,” Mr. Romney said, according to NBC. “Things like Housing and Urban Development, which my dad was head of, that might not be around later. But I’m not going to actually go through these one by one. What I can tell you is, we’ve got far too many bureaucrats. I will send a lot of what happens in Washington back to the states.”

The overheard comments offer a first glimpse of the kind of specific policies that Mr. Romney might pursue as president. Publicly, Mr. Romney has hinted that he would limit deductions for wealthy homeowners,  but has not said how he might do that. And in his remarks Sunday, he also hinted that he might curtail deductions for state and property taxes for the wealthy.

And Mr. Romney has resisted offering many details about the cuts to government spending that would allow him to achieve the kind of deficit reductions he has projected considering the cuts in taxes that he has talked about.

Officials with the Republican campaign said Mr. Romney was just tossing out ideas at the fund-raiser, not unveiling new policies. They accused Democrats of using the incident to try to distract attention from the economic situation under President Obama.

“While President Obama is interested only in offering excuses and blaming others for his failures, Governor Romney is discussing some of the ideas he has to tackle the big issues facing America,” said Andrea Saul, a spokeswoman for Mr. Romney. “Governor Romney has also laid out a bold set of policy proposals that will grow our economy, cut spending and get our massive debt under control.”

At the fundraiser, Mr Romney and his wife, Ann, offered candid and casual observations that did not appear intended for wider public consumption. Mr. Romney, instance, remarked that Fox News was watched by “true believers,” and that the party needed to broaden its appeal to women and independents, according to the NBC account. And Mrs. Romney said she “loved” the fallout generated when a Democratic political operative say that Mrs. Romney had “never worked a day in her life.”

“It was my early birthday present for someone to be critical of me as a mother, and that was really a defining moment,” NBC quoted her as saying.

Mr. Obama’s campaign quickly pounced on the remarks, describing Mr. Romney as willing to reveal his intentions only to well-connected donors, not to the public.

“Apparently, Governor Romney believes only high-dollar donors have a right to know what programs he will cut,” wrote Ben LaBolt, a spokesman for Mr. Obama’s campaign, in an e-mail to reporters. “Education. Housing. To pay for $5 trillion tax cuts for the wealthiest Americans.”

Democrats have already been trying to convince voters that Mr. Romney is hiding things from voters. They point to the fact that Mr. Romney has not identified his “bundlers,” the handful of donors who gather up contributions from their wealthy friends. And they have criticized Mr. Romney for releasing only two years of tax returns.

An e-mail Monday morning from Brad Woodhouse, the communications director for the Democratic National Committee, was headlined: “In case you’re keeping count at home: Things Mitt Romney Hides.”

To that list, Mr. Woodhouse added, “Now we learn policies he’d pursue as president (unless you’re a high-dollar donor, of course).”

The Romney campaign quickly sought to play down the new proposals on Monday, suggesting that the candidate was simply bouncing around a few ideas with donors, not laying out new policy.

During a Romney campaign conference call focused on President Obama’s tax proposals, former Senator James M. Talent of Missouri said Mr. Romney “was discussing ideas that came up at the meeting, which happens a lot when you are on the stump or doing interviews with the press.”

When it became clear that questions from the news media about Mr. Romney’s remarks at the Florida fund-raiser would dominate the conference call, an aide to Mr. Romney ended the session after three questions.

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How a billionaire fills gas tank for $1 a gallon

By Richard Galant, CNN

Long Beach, California (CNN) — Gasoline at $4 a gallon is no worry for T. Boone Pickens, the billionaire energy investor from Texas. He drives from his home to his office in a car that runs on fuel costing less than $1 a gallon.

His method: He has a device that fuels his Honda Civic GX with natural gas from the pipes that serve his home. And he thinks there’s a lesson there for America’s energy woes.

Pickens, who is speaking Wednesday at the TED2012 Conference in Long Beach, California, said America needs to make natural gas a building block of a plan for ending oil imports from the Organization of Petroleum Exporting Countries.

Natural gas is “cheaper, it’s cleaner, it’s abundant and it’s ours, and we’re fools not to use it,” Pickens said in an interview with CNN.

Pickens, an 83-year-old trained geologist who has been working in the energy field since 1951, said the United States could use domestic resources to replace the 5 million barrels of oil imported daily from OPEC, which makes up a quarter of America’s daily use of oil. The U.S. natural gas reserves amount to the equivalent of three times the oil reserves possessed by Saudi Arabia, he said.

“All you need now is leadership,” he said, lamenting that America “has no plan, we’ve gone 40 years with no energy plan. We’re the largest user of oil in the world.”

Pickens’ plan is encapsulated in the Natural Gas Act, a bill with Democratic and Republican sponsors, that would provide tax credits to replace diesel-fuel burning truck engines with natural gas-powered engines; users of natural gas as a transportation fuel would pay fees that would make up for the lost government revenue.

His firm, BP Capital, has a vested interest in energy policy since it invests in energy futures and the shares of firms in a variety of parts of the industry.

He said the worry over increasing fuel prices in the United States rests in part on a lack of understanding of the energy market. Energy prices in America are by far the cheapest in the world, with Europeans paying more than double to fuel their cars and with natural gas costing four or five times as much in Europe and China.

Promises of much lower fuel prices are a fantasy, Pickens said, since the world’s demand for oil is roughly equal to the amount that is being produced.

Pickens said the media should challenge GOP presidential candidate Newt Gingrich on his claim that if elected he can lower gasoline prices to $2.50 a gallon.

“You’ve got Donald Trump saying don’t pay OPEC $100 for the oil. Just tell ’em you’ll give them $50.

“Really? I go into Trump’s hotel, it’s $1,000 for a suite and I say I’m not going to give you that, I’ll give you $200. I’m on the street looking for another place to sleep. You can’t tell ’em I’ll give you $50 when the world market is $100. It just doesn’t work that way.”

He said he still favors wind energy, which was a key part of the “Pickens Plan” he put forth in 2008, but the price of natural gas is now so low that wind projects can’t compete economically, Pickens said.

With 70% of everyday oil use going to transportation fuel, he said the impact of putting a much cheaper fuel such as natural gas into the market will be to bring the price of gasoline and diesel down.

His current plan is focused on moving trucks to natural gas, but he said President Barack Obama could also urge consumers to commit that their next car will run on a domestically produced fuel, whether it’s natural gas or a plug-in electric vehicle.

A Wall Street Journal editorial Tuesday, headlined “Boone-Doggle,” called Pickens’ plan “the hottest energy fad in Washington” and criticized it for proposing subsidies for a natural gas industry that should compete on its own.

The start-up costs of relying on natural gas for transportation aren’t cheap. The cost of replacing truck engines is roughly $35,000 apiece, Pickens said. His own natural gas car costs thousands more than a gasoline-powered Honda Civic, and then there is the cost, which he said was $2,000, to install the natural gas fueling device for the car.

And U.S. consumers have only that one natural gas model from which to choose. In France, he said, there are 62 models that use natural gas. Pickens said American carmakers do produce such vehicles for overseas markets but have not seen a viable market in this country.

One of the concerns is that there isn’t a widespread network of service stations that could refuel a natural gas-powered car. Pickens said natural gas is available in pipes that go down every street and alley, so it could eventually be more accessible for refueling.

“Somebody says you couldn’t get in that car and drive to Chicago, well, you could — you’d have to do a little work to see where the stations are, but I’m not going to drive that car to Chicago, I’m going to drive that car from my house to my office.”

And if he is going on a trip to Chicago? “I’m going to get in my wife’s car. She has a bigger car. Women always have bigger cars than men do.”

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Rosen: Buffett’s Tax Fraud

Perched next to Michelle Obama at President Obama’s State of the Union campaign speech, in full view of the TV cameras, was Warren Buffett’s secretary, the woman who Buffett tells us pays more taxes than he does, her multibillionaire boss. She served as a convenient prop for Obama’s latest round of class warfare. I deconstructed Buffett’s specious claim four years ago when he first made it. Apparently, it’s time for an update.

His assertion is that he and the super rich pay a lower tax rate than their “secretaries and receptionists.” The key word here is “rate.” Obviously, when considering the amount of total tax dollars collected, the rich pay an inordinate share — far more than their “fair share” — of the overall income tax burden. The top 1 percent pays 37 percent of all individual federal income taxes; the top 10 percent pays 70 percent; and the bottom 50 percent carries only 2 percent of the burden.

Buffett extracts a pound of lie from an ounce of truth while throwing in a heavy dose of half truths and convenient omissions. While it’s true that rich and not-so-rich investors pay lower tax rates on things like capital gains, dividends, and interest on municipal bonds than is paid on ordinary wage and salary income, there are perfectly good reasons for that.

Corporations that pay dividends to shareholders do so with after-tax dollars, having already paid a corporate income tax on their earnings. The lower tax rate that shareholders

have paid in the past on dividend income when they file their individual tax returns serves to offset some — but not all — of this double taxation. (The lower tax rate on ordinary dividend income, unfortunately, is being eliminated.)

Likewise, the capital gains tax is also double taxation, as eloquently explained by economists Victor Canto and Harvey Hirschorn in more words than space allows here. Moreover, if a stock increases in value over the years, much of the gain is illusionary, eroded by inflation. The capital gains tax makes no allowance for this. A lower tax on capital gains is a productive incentive for people to defer current consumption and invest in the future, creating wealth for themselves and society.

But Buffett’s worst manipulation is lumping together income taxes and payroll taxes in the comparison with his secretary. Payroll taxes are for specifically dedicated programs like Social Security and Medicare. Investment income isn’t and shouldn’t be subject to the payroll tax, and Buffett has far more investment income than his secretary.

Income taxes are sharply progressive, with almost 50 percent of Americans paying nothing at all. Conversely, a uniform Social Security tax rate (normally 6.2 percent each for employee and employer; although a 4.2 percent employee rate is temporarily in effect) is levied on an employee’s salary, capped at an income limit of $110,100 in 2012 (increasing each year with inflation). So, obviously, a lower-salaried secretary would pay a greater percentage of her income in payroll taxes than a much higher-salaried boss whose income is well above $110,000. But, again, this is for good reason. Social Security benefits are similarly capped. From its inception, Social Security was described as a forced savings plan for your own retirement or disability. If the Social Security tax on individuals had no limit, it would be just another income transfer/welfare program, which is precisely what liberals want.

With no cap, the normal, combined employee/employer rate of 12.4 percent on a $1 million salary would result in a tax of $124,000 in 2012 instead of $13, 652. That’s an increase of about $110,000. On a $10 million salary, that would be a tax increase of about $1,226,000. And this would be on top of income taxes, which Democrats also want to increase. This is grand larceny.
Read more: Mike Rosen – The Denver Post


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