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Old 02-16-2014, 03:55 PM
 
4,750 posts, read 3,779,670 times
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The inspiration for this thread started because I was curious on how Mitt Romney became so wealthy, so I looked it up and ran across this video on how private equities work (Bain Capital). From what I understand, a lot of his income is "investment income" and it came from capital gains. Since he had a lot of investment income, he could use the corporate tax write-offs, which is why he paid 14%. Compared to people like my parents who made $115k, and paid 22%.

So, if I'm understanding this correctly, is this how the 1% became so rich?
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Old 02-16-2014, 04:09 PM
 
584 posts, read 704,291 times
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I strongly doubt that your parent paid 22%, unless they had really poor tax advise. The method used to show Mitt Romney paying only 14% took his taxes and divided them by his entire income. Assuming that your parents only took the standard deduction (no house, no kids, no retirement savings, no education savings or student loans, no charity gifts) they would have paid around $17,500 in taxes or 15%. Mitt Romney also gave a HUGE amount to charity, that is what dropped his rate down to 14% not some special tax write-offs. He used the exact same write-off that you, me and your parents can use.
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Old 02-16-2014, 04:17 PM
 
3,167 posts, read 3,381,678 times
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Quote:
Originally Posted by nealrm View Post
I strongly doubt that your parent paid 22%, unless they had really poor tax advise. The method used to show Mitt Romney paying only 14% took his taxes and divided them by his entire income. Assuming that your parents only took the standard deduction (no house, no kids, no retirement savings, no education savings or student loans, no charity gifts) they would have paid around $17,500 in taxes or 15%. Mitt Romney also gave a HUGE amount to charity, that is what dropped his rate down to 14% not some special tax write-offs. He used the exact same write-off that you, me and your parents can use.
I pay way more than 15%, and so did my parents. My husband and I right now are in the worst tax bracket - enough to pay a lot of tax, too much for a lot of deductions (like student loans).
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Old 02-16-2014, 04:40 PM
 
Location: US
22,353 posts, read 21,196,825 times
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People who became wealthy worked hard and were smarter than the average person. However, a lot of the wealthy people today inherited their wealth and now continue to maintain their wealth through investments. Tax has very little to do with it in my opinion.
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Old 02-16-2014, 04:53 PM
 
4,750 posts, read 3,779,670 times
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Quote:
Originally Posted by nealrm View Post
I strongly doubt that your parent paid 22%, unless they had really poor tax advise. The method used to show Mitt Romney paying only 14% took his taxes and divided them by his entire income. Assuming that your parents only took the standard deduction (no house, no kids, no retirement savings, no education savings or student loans, no charity gifts) they would have paid around $17,500 in taxes or 15%. Mitt Romney also gave a HUGE amount to charity, that is what dropped his rate down to 14% not some special tax write-offs. He used the exact same write-off that you, me and your parents can use.
Lies you tell... There's no way! That doesn't make sense.

You're saying by donating "huge" amounts to charities, he was able to lower his tax portion by 21%?

ETA: Tax brackets for his income would be 35%.



Quote:
Originally Posted by bmw335xi View Post
People who became wealthy worked hard and were smarter than the average person. However, a lot of the wealthy people today inherited their wealth and now continue to maintain their wealth through investments. Tax has very little to do with it in my opinion.
Well, I beg to differ. If he's taking home money from investments from his corporation, he can use corporate tax write-offs. The less you pay in taxes, the more money you have in your wallet. When the supervisor at my old job doesn't use the whole budget, he gets to take the rest home as a bonus, despite the fact that the place looks like sh*t and is in dire need of repairs.
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Old 02-16-2014, 05:02 PM
 
47,531 posts, read 63,687,267 times
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Quote:
Originally Posted by Pinkmani View Post


The inspiration for this thread started because I was curious on how Mitt Romney became so wealthy, so I looked it up and ran across this video on how private equities work (Bain Capital). From what I understand, a lot of his income is "investment income" and it came from capital gains. Since he had a lot of investment income, he could use the corporate tax write-offs, which is why he paid 14%. Compared to people like my parents who made $115k, and paid 22%.

So, if I'm understanding this correctly, is this how the 1% became so rich?
Just like Oprah --- they get rich from investments. Oprah is exceedingly rich.
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Old 02-16-2014, 05:12 PM
 
Location: stuck in the woods with bears and moose
23,128 posts, read 22,192,826 times
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You can be in the right place at the right time like Oprah. It's a grab bag of intelligence, hard work, right skills for the times, opportunities, living in the right place, inheriting money--there is no one answer.

You can have really smart people who work hard at low paying jobs.

Most people I know who are very rich either inherited it and then turned it into profitable investments OR they were middle class and were driven to become a millionaire. The ones I know who were driven, were also kind of mean and were obsessed with wealth. That's the sacrifice they made.
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Old 02-16-2014, 05:16 PM
 
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The ones I know? Smarter then the average person and goal oriented. Stuck to it and got there as a result. Some sweat, delayed gratiification, non-gamblers.
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Old 02-16-2014, 05:30 PM
 
140 posts, read 195,757 times
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Quote:
Originally Posted by in_newengland View Post
You can be in the right place at the right time like Oprah. It's a grab bag of intelligence, hard work, right skills for the times, opportunities, living in the right place, inheriting money--there is no one answer.

You can have really smart people who work hard at low paying jobs.

Most people I know who are very rich either inherited it and then turned it into profitable investments OR they were middle class and were driven to become a millionaire. The ones I know who were driven, were also kind of mean and were obsessed with wealth. That's the sacrifice they made.
There were studies that show that the majority of wealth in America today is self-made. Every crisis brings opportunities. It's always a matter of finding and creating these opportunities. Rich people come with all backgrounds. But what most of them share is not just "smartness," but street-smartness, business smartness, risk tolerance, and focus. Successful people have excellent skills in communication, leadership, time management, and work-life balance. They work hard and play hard. They see complex things in simple terms. They let go what doesn't matter and concentrate on what does. They are not satisfied with the status quo, and not willing to simply follow scripts by other middle level people.

The thing is most people who complain about CEOs, if given the opportunity, simply cannot do a CEO's job. Period.
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Old 02-16-2014, 05:39 PM
 
7,281 posts, read 9,632,126 times
Reputation: 11460
Quote:
Originally Posted by Pinkmani View Post


The inspiration for this thread started because I was curious on how Mitt Romney became so wealthy, so I looked it up and ran across this video on how private equities work (Bain Capital). From what I understand, a lot of his income is "investment income" and it came from capital gains. Since he had a lot of investment income, he could use the corporate tax write-offs, which is why he paid 14%. Compared to people like my parents who made $115k, and paid 22%.

So, if I'm understanding this correctly, is this how the 1% became so rich?
The 1% became the 1% by not trying to figure out why others have more than they do.

Now, go look up how Al Gore became wealthy, how the Clintons became wealthy and come on back and report your conclusions.

How did Bill Gates become wealthy? Obviously your post was designed to elicit a political agenda discussion because who would pick Romney as a model to use as their standard of understanding when so many other models exist?

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